Buying a car should be an exciting experience, but for many, it is also a stressful and expensive one. The question is why are so many people struggling with their car financing? There are several reasons why, but there are also ways to mitigate the risks and put yourself in a better position.
If you are looking to buy a car and need finance, there are licensed financiers with tailored finance options available for new and used car purchases. If you are buying a new or used car, then you’ll likely be looking to finance it. With their financing options, you can get approved for a car loan at a competitive rate.
We’ll make your car-buying experience as simple as possible by organising all the details on your behalf.
Why do people struggle with car finance?
Almost everyone knows someone who’s struggling with car finance or owns a car that isn’t working. This seems like a fairly obvious fact, but typically, people end up paying way more than the vehicle is worth because they don’t have the right credit score. This makes it very hard to own a vehicle when you’ve fallen behind on your car payments. Chances are, you’ve come across people who are well-positioned to buy a car and just need to find the right financing deal. You’ve probably read conflicting articles about whether or not car financing is essential to getting a car. Let’s take a step back and figure this out.
Should you take out car loans to buy a car or are there better options that might help you save money? Don’t worry, we’ll get to that.
Before we get to the different options, there is a fundamental fact that we must understand about vehicle value: You can’t just go out and purchase a used car and expect it to save you money. Cars depreciate over time, so the value of your car has to go up over time. To put it simply, you have to use the money to buy the car and use the money to pay off your vehicle loan. Even if you buy the car at a discounted price, your total cost will be higher because you’ll be buying the related “support equipment” which includes insurance, maintenance, and gas. This is why car depreciation is key to understanding the overall cost of a vehicle.
Here are the main factors that go into the total cost of a car: For a couple of years, most car buyers reported no car payment or debt. Let’s discuss why this is and how you can get out of your car financing debt.
The average cost of a car insurance premium is $1,200/year. Most people who decide to buy a car get car insurance for something around $300–400/year. If you’re being conscientious and pay for it, your premium cost could be as low as $150–200/year. If you have good credit, you could pay even less (less than $100/year). However, if you have bad credit, your cost could go much higher. Your car insurance cost is the biggest time crunch for most people. How much is too much? Insurance costs fluctuate month over month and can even go up or down based on a lot of variables. Your premium cost will vary depending on several factors, so it’s always a good idea to get quotes and compare quotes from multiple insurers to start with.
How to choose the best car loan and insurance for your needs
To put life insurance in an arm’s length commission-free account, a policy must be more than just expenses. Some insurance policies provide coverage for the loss of a third party (such as a business) and business-related property damage.
Most policies will need to be tailored to your situation and depend on your particular risk factors. Understanding car insurance costs can help buyers compare the cost of car insurance across different automobiles. Anything that puts your financial burden on someone else also places the responsibility on you.
But plenty of money can be saved if you use a belt and hitchhiker insurance: it will cover you in the event of any car breakdowns and pedestrians or cyclists you bump into.
The benefits of financing a car include
The benefits of financing a car include less interest payment, reduced monthly payments, etc.
In the finance world, interest rates can be quite high, especially for car loans. Your car loan payments will be higher at first, but you’ll pay it off faster once you leave the dealership.
If you plan to keep your car for at least 3 years, you’ll save up to $10,000 over the life of your car. This could be substantial money when you try to purchase a new car or replace your current vehicle.
Disclaimer: This information has been provided as general material for your consideration. Information regarding government policies is sourced from official australian government sources. No liability is accepted for errors in presentation or in the interpretation of facts or the commentary and analysis of information which is available in the public domain. Individuals are advised to consult with their financial advisor or accountant for specific advice regarding their individual situation.