Once you’ve found the right car and looked into all the associated costs involved in buying it, you should have a good idea of how much you’ll need to pay all up. You then have three main options for financing your new wheels: save, borrow or dealer finance.
Saving for a car
Waiting until you have enough money to buy a car outright takes time, but if you do you won't have to pay any interest once you've bought it.
Having a separate savings account helps. Having a separate savings account helps. You can also set up a savings goal using Goal Tracker* in the CommBank app. We’ll break it down into weekly targets and help you set up automatic payments from your everyday account into your goal.
Borrowing for a car
If you’re buying a car that isn’t more than five years, old you may be able to take out a Secured Car Loan. By using your car as a type of security, you can borrow the funds you need at a lower interest rate than an unsecured loan. You can even get pre-approval for this type of loan, giving you up to 30 days to find the right car within an approved loan amount.
The more you can save before taking out a personal loan the less you’ll have to repay, so it’s a good idea to still put some money away beforehand if possible.
A novated lease is a way you can finance a new or used car and make your repayments from your pre-tax salary with approval from your employer. It can also bundle your vehicle’s expenses into one simple payment. Novated leasing is a form of ‘salary sacrificing’, which effectively reduces your taxable income.
Car dealers often offer finance as a means to buying a car. If you’re considering this option, there are a few things you should ask the dealer:
- 'What's the interest rate?' Compare the rate the dealer may be offering through dealer finance with the comparison interest rate of a personal loan to check you're getting the best one.
- ‘Is there a balloon payment at the end of the loan?’ The loan repayments may seem cheap, until you realise you face an additional large lump sum when your loan term is up.
- ‘Is the price of the car negotiable?’ It often isn’t with dealer finance.
* Requires a GoalSaver or NetBank Saver in your name only.