How do car loans work?
Heritage Bank loan specialist, Daniel Puckeridge, lets us in on some home tuths about financing a car loan.
A new car is probably going to be a person’s initial most expensive purchase prior to a home so it’s absolutely necessary to think about all your options.
Would you think it funny if at an open house you had the actual real estate sit you down and sign up a home loan then and there, with just five minutes to think about it?
Although many people would consider this inappropriate or a pressured purchase a lot of us do this without too much thought when buying a car. Car salesmen are good at what they do. They can convince you that you need a particular product now and they can get you a good deal – as long as you make a decision now.
Dealership finance enhances the chance of a sale for the dealer and it gives the customer an ‘ease of purchase’ impression. However, there can be hidden costs associated with financing your car this way, such as including balloon payments. This means an amount payable at the end of the contract is added on to the loan to reduce payments during the normal course of a loan, often when the car may not be worth its same value as estimated years earlier.
I’ve seen all too often people who want to adjust their contract with the dealer due to a change in their financial situation, such as a change in job or the need for more money to consolidate personal debt. The car yard won’t help you then. Your bank, on the other hand, will be able to sit down with you and discuss your options.
At Heritage Bank, we have ready access to experienced staff who can help you find the best option when purchasing a vehicle. Signing a contract for a car loan should not be taken lightly – give it the thought it deserves. Get savvy by researching and finding your best option before getting behind the wheel of your new vehicle – don’t let car dealerships drive away with your money.
Daniel Puckeridge brings 30 years experience to the Heritage Bank Queen Street Branch lending team in Brisbane. He can be contacted on 07 3229 5227.