Purchasing a Car? Why a Car Loan usually better than Paying Cash?
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Fast loans to finance your car
FINANCING your car purchase can be beneficial. Let’s look at the reasoning behind this.
Many people think it is better to buy a car outright because they don’t like the feeling if having more a debt (or more debt).
However, if you are purchasing a new or fairly late model car, and even if you have other loans or debt, it is usually not a good idea to pay cash.
We can make sure you get the right car loan at the right price.
Although having cash does give you options, building up that cash isn’t easy, so its always worth weighing up those options. Having cash available to avoid taking out a loan doesn’t always mean it makes sense to do so.
We offer the best car loan interest rates to free up your cash for other things
Many people want to avoid debt without realising that they could do more productive things with their money.
An example will help clarify this:
Rather then buying a car using his cash, John decides to put down a 20% deposit and obtain finance for the balance of the purchase price (total cost being $20,000). The deposit of $4,000 leaves an amount required for the loan of $16,000.
John can now do anything he wants with the $16,000 that he is not immediately paying for the car.
He can invest this lump sum and still make the monthly car loan repayments with his regular wage income. Even if we assume that the annual investment return is only 3% (say on a cash account), after 5 years the growth on John’s investment will still be higher than the cost of the car finance (assuming an interest rate of 4.5% on the loan).
The reason is that, even though the rate of return on John’s investment is lower than the interest on his car loan, the lower rate is being applied to a growing investment balance (this is known as COMPOUNDING interest).
Conversely, the higher interest rate being applied to the car loan is being eroded away over time, because the loan is reducing over time.
Other advantages of buying a car using our fast loans
Financing might also be a better option for John if he has existing credit card debt or a student loan debt with higher repayment rates.
Also, you can claim depreciation on the car (for tax purposes), regardless of whether you paid cash for the car or borrowed money to buy it.
Bad credit loans for many different situations
Our brokers can obtain finance for your car purchase even if:
- You have been rejected by the banks
- You own your own business or are self-employed
- You have a bad credit history
- Have no deposit
- You are a discharged bankrupt
- You don’t have a history of savings
You may have found it hard to get a car loan because lenders see you as a “risk”. We look at all applications on a case-by-case basis to ensure you are given every chance at successful approval.
Our experienced brokers will take the time to understand your situation before advising you on the right steps to improve your credit rating and get the right deal for you, even the fiddly ones!
No credit check loans
When applying for a car loan with one of our trusted and specialised brokers, the information provided to us does NOT result in any entry on your credit file.
During life, unpredicted emergencies can place any one of us in an awkward financial position.
If a lender has rejected your loan because of bad credit or poor repayment history, you still have options for obtaining a car loan without a credit check.
We have streamlined processes to ensure fast approval with competitive car loan interest rates.
Note: when financing a car purchase, you need to be confident that you’ll be able to make the monthly repayments throughout the loan term.
