9 Things to Know Before Getting Car Finance
Thursday, 24 August 2023
Are you planning to opt for car finance in your next car purchase? With many enticing terms and deals that help you save money and get value in return, taking out a car loan is a no-brainer. But here’s the thing: don’t sign up for a loan without thoughtful deliberations.
We agree that car loans preserve your savings for a rainy day and help build your credit score. But deliberating about it saves you from potential nightmares and regrets.
Today, we’ll look at nine (9) key things to know before you settle for Car Finance NZ to ensure sober decision-making. Let’s keep learning!
1. The Interest Rate
Before filling in that application, find out the interest rate attached to the loan you will secure. Different NZ car finance lenders will have varied interest rates. Spend some time comparing different car finance rates, keeping in mind that even a small margin will affect the size of your loan. Find out the interest rate for the car loans before you fill out the application.
2. Your Credit Score
Car loan financiers will use your credit score to measure your repayment ability. No credit or bad credit may attract rejections higher interest rates, and strict loan terms. Check your credit score status before applying for car loans in New Zealand.
3. Available Lending Options
Should you finance your car through the bank, credit union, dealership, or brokers? Analyze each option, considering the loan repayment terms, interest rates, monthly payments, and how much they can finance. Go with what works best for you based on your situation.
4. Required Documentation
Loaners want to know their applicants before processing the loan request. They want to verify your financial status, credit record, and validity of the information on the application form. Ensure you have all the paperwork required to establish your suitability for the car loan NZ. These documents include proof of identity and income, bank and income tax return statements, and credit information.
5. Service Tax
Be ready to pay service tax for the car loan. All goods and services consumed in New Zealand are subject to Goods and Services Tax. Find out how much will be imposed on your auto loan and how frequently you’ll need to pay.
6. Foreclosure Penalty
You’d expect your lender to be happy if you repay the loan before the actual repayment time. That’s not the case with some banks. Seek to know if your lender will penalize you for making your payments earlier than the agreed time.
7. Deferred Payments
Some car loan offers do attract accrued interest. You may get a non-repayment package for six months from a dealership or a zero-percent finance offer from your lender. Good bargains are great, but will they affect your interest rate in the future? Find out.
8. Monthly Payment
Don’t fall for persuasive interest rates. Use our car loan payment calculator to establish the potential monthly installments if you get vehicle finance NZ based on the specific interest rate. Also, calculate the total amount you’ll have to pay back.
9. Repayment Period
Before you take out the loan, consider the repayment terms. Typically, an extended repayment period means you’ll pay more than your vehicle value, while a shorter repayment term may save you some cash. An extended repayment periods.
10. Consult Car Financing Experts
Having the right knowledge before applying for a car loan in NZ is critical. Ready for a car finance partner who values your demands? Engage Kiwi Car Loans today, and you’ll be happy to receive expert consultation that allows you to settle for the best deals for your budget.