Arranging Your Finances

If you are like most Aussies and don't have a huge bundle of cash hidden away then a car loan is your best bet if you are looking to buy a new car. You will most likely have to get a loan, this may mean that you have to pay a lot more for you car then you ordinarily will but at least once you have paid off the loan, the car will be yours.

You have to learn to shop around for the best rates on car loans as it is often treated as a personal loan and so the rates are higher than mortgages and always read the contract carefully. If a used car dealer offers you a "interest free loan" it can often mean that the loan is retricted to cars within the dealership and that the cost of the loan is built into the cost of the whole car. So this means that you may be paying an extra percentage of your money that could've been saved if you had shopped around for a better loan.

There are also reasons to buy a more enviromentally friendly car as some services have begun cutting back rates if your car is deemed "enviromentally friendly". There may also be government rebates on at the time of purchase and always look around for these as they can potentially save you a lot of money.

Below is a list of important questions to ask courtesy of the Nine MSN Money website :

• What is the interest rate?
• Is the interest rate fixed or variable?
• What fees apply — are there any upfront or ongoing fees? As you can see from the table at left, some institutions charge no establishment fees but others charge upwards of $150.
• How often will I have to make repayments — fortnightly or monthly, for example?
• How long will it take to repay the loan?
• What is the total cost of the loan including fees and interest over the entire term of the loan?
• Can I make extra repayments without being charged a penalty?
• Are there any penalties if I fall behind in repayments?
• Can I pay out the loan early and if so, is there a fee? This is particularly important as people often upgrade their car. If you've taken out a five-year loan but after three years want to trade in your car, you don't want to be charged a penalty to pay out the loan.
• Am I required to take out comprehensive insurance on the car?

There are also some good websites that you can go to which will help you find the best loan :

NineMSN Car Loan Website

Car Loan Quotes

Aussie Car Loans

Dream Loans