20 May 2022 · Our Blog - Read The Latest Articles

4 Steps to Buying a Car on Finance

Whether it’s your first ride or next work vehicle, buying a car is a large investment, the second-largest most of us will make behind purchasing a home. Most of us simply don’t have the cash on hand to buy a car outright. Luckily, there are plenty of car finance options available. The process of applying for a loan and buying a car on finance is straightforward. If you’re unfamiliar with how it all works, we’ve put together this article that covers the 4 simple steps of buying a car on finance.

1. Research Cars and Finance Options

Before you figure out how you’re going to pay for your car, you ought to know what you’re going to buy. Figure out what sort of car you need. Do you want to go off-road? Do you need 7 seats for a large family? Decide what cars you’re interested in buying so you can figure out if they’re within your budget.

Your total budget will largely depend on your individual financial position and the finance company you want to use. Each lender calculates your borrowing power a little differently, so you should do your research, self-assess your financial position and compare similar loans and lenders. Most major banks offer personal loans that can be used for car finance, or your car dealer can help you source one of their in-house options. Dedicated car finance is often better value in the long run than bank loans,  so compare your options carefully. For example, the Toyota Access finance product guarantees you a future value on your new car, meaning you always know exactly where you stand and what your budget for your next car when it comes a time is.

 

2. Get Pre-Approved For Finance

Finance pre-approval means that your lender has approved your loan “in principle.” You haven’t formally applied for credit and they haven’t formally agreed to supply the loan, but pre-approval gives you a concrete idea of how much you can borrow. Obtaining finance pre-approval can make the process of your final loan application much simpler. It also gives you bargaining power and a point of comparison for the finance packages available through your car dealer.

For example, you could get your bank’s pre-approval for a personal loan of $30,00 at 6% interest. When you visit your dealer, you might find their dedicated car financiers are willing to lend you more money, or at a lower, more personalised interest rate.

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3. Test Drive the Cars You Like

It’s always a good idea to test drive cars thoroughly before you make your final decision. If you’re buying a car privately, you should have it inspected by a mechanic you trust. When buying from a dealer, mechanical inspections are often included as standard.

Don’t be afraid to test drive more than one car! Dealers want you to drive away happy with your purchase, so they’ll be willing to help you explore the new cars and used options they have in their lot.

Find a dealer such as Downtown that offer many test-drive options such as overnight, lunch hour or even weekend test drives to help you determine whether this is the car for your lifestyle.

4. Fine-Tune Your Car Finance Deal

Once you’ve settled on the car you want to buy, it’s time to hammer out the details of your car finance. Most lenders offer leeway with their car finance options. That means you can negotiate terms that make the loan affordable for your budget.

There are a few things you can do to reduce your weekly car finance repayments:

  • Increase your deposit. Some lenders may ask for a small up front deposit, while others won’t. If you have the cash to spare, you can increase your deposit to help manage your weekly loan repayments.
  • Carefully consider the loan term. The loan term refers to how many years the loan will last. In general, shorter loan terms mean higher repayments but less total interest paid. Speak to your dealer about how much your repayments will be for different loan terms.
  • Discuss balloon payments. A balloon payment is a lump sum payment due at the end of the loan term. By adding a balloon payment, you can reduce your weekly repayments however may need to carefully budget to ensure you have the balloon payment amount available when it becomes due..

Looking to Buy a Car Through Finance? Downtown Toyota Can Help!

Unless you’ve got a large amount of cash on hand, buying a car is usually easiest with the help of a loan. The team at Downtown Toyota can help you sort out finance through our fantastic Toyota Access program! Toyota Access uses fixed interest rates and Toyota’s Guaranteed Future Value pricing to make our financing more affordable than ever. We’re committed to helping you drive away in the car of your dreams, so get in touch with us today to hear more about our special offers! You can contact us below, or we’re more than happy for you to come and visit us at our location in Morningside, East Brisbane.

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Downtown Toyota

Finance & Insurance

753 Wynnum Road
Morningside, QLD 4170

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07 3896 0100
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07 3399 6966

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