Thinking about buying a car in Perth?

New and used Car finance Perth

Buying a new or used car can be an intimidating experience. It's important that you go into a car dealership with information about the cars you are interested in, the budget you can afford, and the value of your trade-in if you have one. WestCorp Capital can assist you in this process as well as the process of getting your loan.

Think about the Financing

Prior to visiting a Perth dealership, have a sense of what kind of deposit you can afford to put down, or talk to an expert and decide what loan is best suited to you and your needs.

Look at the big picture

Understand how loans work, and you’re better equipped to make smart decisions about your loan. When Perth car buyers lose perspective, they commonly fall into two dangerous traps:

  • 1. Focusing on the monthly payment (as opposed to the purchase price and total cost including interest)
  • 2. Tunnel vision (the need to buy a certain car or certain features, even if those don’t fit your finances)

It’s tempting to focus on the monthly payment when deciding how much you can afford. In fact, some auto dealers encourage this. Unfortunately, the monthly payment is easy to change: just make the loan last longer. Stretching out a loan for more years (for example, going with a seven-year auto loan instead of a four-year loan) makes for lower payments – but it also results in dramatically higher interest costs. What’s more, you’ve got a better chance of getting upside-down on your loan (when you owe more on the vehicle than it is worth). Get car financing that is suited to you and you Perth lifestyle.

Making a small down payment feels good today, but that means you’re borrowing more (which, again, makes it easy to get upside-down).

Make sure you’re buying a car that you can truly afford and avoid taking on a loan that will come back to haunt you.

Low interested rates on car loans

Just because you see a low-interest rate advertised for a car loan with one particular lender, don't automatically think that's how much you'll end up paying. Always talk to a professional before going through with any Car fiance in Perth.

Those ultra-cheap interest rates may only be available to you if you have good credit or if you are buying a certain type of car. In some cases, those rates may only apply to loans amounts over $30,000.

This means if you're buying a car that is two years old and you only want to borrow $21,000, you may be paying a slightly higher interest rate than the one you saw advertised. It's important to find out whether your car loan has a balloon payment also.

How to find the right low-interest rate car loan for you

  • How old is the car you want to buy? This will determine the type of low-interest car loan you're eligible for. Some lenders will only lend to you if you if you are buying a new car, which is generally considered to be a car under two years old. Used cars can be up to seven or ten years old. Cars beyond that age may need to be bought with an unsecured personal loan.
  • What is the interest rate and loan term? From there, you can compare the interest rates available to be sure you don't end up paying more than you should. Be sure to consider the upfront and ongoing fees of the loan as this will add onto the cost of your low-interest rate car loan. Always take the time to input your numbers into a good car loan calculator. Check out your monthly repayments over a three-year term, a five-year term and a seven-year term.
  • How much will you be paying? You'll notice that your payments each month are much cheaper if you choose a longer loan term. However, you should also notice that you end up paying a lot more interest over that term than you would if you paid your loan out quicker. Work on a term that best suits your budget and the amount you can comfortably afford to repay each month. Some lenders may also offer you the option of a residual payment at the end of the loan term. This is also sometimes called a balloon payment. These types of low rate car loans can reduce your ongoing repayments, but keep in mind that the balloon repayments can be in upwards of $5,000.