The difference in interest rate available to you when buying a car is going to make all the difference in how much you will end up paying. Any large amount of money with an interest rate levied against it is going to be significant in monthly repayments, especially when repaid over a term of more than 12 months.
There are some good deals to be had on the market, the trick is in knowing where to find them. This guide should help make the process easier and give you an idea on what you can expect.
Interest Free Car Finance
Yes, you read that correctly. Once every now and again, some car manufacturers will offer interest free finance on some of their models. These cheap car finance deals can dramatically reduce the cost of borrowing so should be sought out whenever possible. Have a look at some of the finance calculators available on car manufacturer’s websites for an idea of costs or visit a dealership in Hamilton to speak to a salesman.
Keep your eyes peeled when watching the television, surfing the web or reading newspapers. These offers are usually marketed well but are for a limited time only so you will need to act quickly.
The offer also might not be available on the exact car you want so you may find yourself entering into a negotiation with a dealer.
Low Interest Car Finance
Slightly easier to come by and more widely available. Low interest is considered to be anything up to 5% APR. If you manage to secure such a deal, especially over a longer term, you will have done well.
These incentives are offered regularly via all the usual channels so keep an eye out. You should also be able to secure the car of your choice if you find one of these deals, making expensive cars much more affordable.
A Low Interest Bank Loan
You aren’t restricted to obtaining finance from a car dealership. Most high street banks are now offering low interest loans which can make borrowing larger amounts very cheap. The headline rates are usually around 3% APR, which on a loan in the region of $15,000 is only going to attract a small amount of interest, even over 5 years.
For larger amounts, you may be required to secure the loan by attaching it to your property. Be careful when doing this and make sure the amount borrowed is affordable.
Average Industry Figures
If you haven’t been able to find the best deal, you will likely find yourself paying in the region of 5 – 10% APR for your car finance. If this is the case, pressure your dealership for other incentives such as a manufacturer deposit scheme where they foot the bill for any initial deposit required, leaving you paying only the repayments.
Low cost car finance is available from most avenues these days so don’t pay more than you have to. Manufacturers rely on large turnover so anything that they can do to sell cars will be done to ensure that targets are met.