Buying a car is exciting, but if you're borrowing for the first time it's also a big financial decision. A little preparation puts you in a stronger position to find a loan that suits you.
1. Work out your budget
Look at your income, expenses and existing commitments to see what you can comfortably afford. Break it into weekly, fortnightly or monthly amounts if that helps. Remember the running costs as well as the repayment: insurance, registration, fuel and servicing.
2. Check your credit report
Lenders use your credit file when they assess an application, so check it before you apply and make sure it's accurate. You can get a free copy from each credit reporting body (Equifax and Experian) once every three months. If something is wrong, ask for it to be corrected before you apply. See How do I check my credit score? for the steps.
3. Compare your options
Rates, fees and terms differ between lenders. You can compare them yourself, or a broker can do it for you by understanding your situation and checking suitable options across a panel of lenders.
4. Understand the terms
Before you sign, make sure you know the interest rate, the comparison rate, the length of the loan, the fees, and what happens if you repay early or miss a payment. Read the contract and ask about anything unclear.
5. Think about a deposit
A deposit reduces the amount you borrow and the interest you pay, and some lenders may expect one. How much you need depends on the lender, the vehicle and your circumstances.
6. Buying privately?
Private sales need extra checks, such as making sure there's no money owing on the car. Our free Private Sale Guide walks you through them.
Ready to talk it through? Send us an enquiry.