Tips for Reviewing Car Finance Options

You have several options when it comes to paying for your car:

1. Cash/cheque
2. Loan from financial institution
3. Lease
4. Dealer finance

1. Loan A car loan is fairly straight forward and offered by many financial institutions. It differs from a personal loan in a couple of ways. Firstly, the interest rate is often less than a personal loan. Secondly, the loan is secured against the car. This means that when you sell the car, the loan must be paid back to the lender. Also, there are different types of car loans depending on whether the car is new or used. You will generally get a lower rate of interest on a new car than a used car. This option is generally chosen when the car is for private use. 2. Lease There are different types of car leases available including a finance lease or novated lease. This option is popular with businesses and employees due to tax advantages that can be made.

2. Dealer Finance Most new car dealerships will have a relationship with a finance provider where they can offer you "dealer finance" to purchase your car. The upside is that it makes the process of buying your car more convenient. The downside is that their interest rate may be higher than what you could get elsewhere.

Following are some tips when borrowing money to purchase your car.

1. Do your research List what you do and don't want out of a car. Read up and ask around about the makes and models that suit your needs.

2. Calculate how much you can borrow Find out how much you can borrow and what your repayments may be using the NAB Personal Loan Calculator.

3. Go in prepared Know your finances, and be prepared to take advantage of a good deal. In most cases, it takes only a day or two for a personal loan to be conditionally approved.

4. Choose the right loan Not all loans are the same. Choose a reputable loan that offers you competitive interest rates and no early exit fees.

5. Be a clever car buyer Don't settle on the first car you see. Shop around and you may find the car you want for a better price.

6. Check if the car is OK If you are buying a used car, organise for a pre-purchase vehicle inspection with a qualified mechanic.

7. Negotiate a good deal Bargaining on the price is often a part of the car-buying process. Know how much you have to spend by organising your finances first and be in a confident position to negotiate a good price.

8. Signing the loan contract Once your details are verified, a loan contract usually takes 3 to 4 working days to be finalised. The money will be available once the contracts have been signed.