knowlton

Yea, loan sharks in suits - whilst safer than borrowing from the mafia, they're not much different in how much they screw you!

I've found the best way to get a loan is to speak to the bank for a more reasonable rate of return...

neil248

If buying even from a franchised dealer watch for an Origination fee on the loan which could be 500 dollars on a 20k loan.

This is a payment to the dealer for setting up the loan and there is likely to be an arrangement fee by the finance company on top of this!

What you think is a 20k loan could very well end up nearly 21k before you have even started making payments.

Try and sort the finance out before you start looking for a car. I think around 11% secured is the figure to be looking at although there are headline rates for less although they are likely to be variable rates.

We bought from a Mitsubishi main dealer and the finance department would have shafted us if they could.

giz

Great info...thanks

Steve2009

In my naivety I paid a big origination fee. The final bit of discount I had squeezed out of them was almost wiped out.

sammyg

Try CUA.

Cheapest we found when we borrowed a while back.

Although this was a new car loan and they do have an 'interest' in the vehicle (loan is secured on it, wasn't a prob for us)

8. something %

Not the most efficient service but it's the rate that matters hey

Stu

giz

That's the best I've seen yet. I've checked out the website and will be looking into that further.

Cheers

sammyg

No worries Gav, and just to add we did the figures compared to a lot of others and there is no admin fee, no monthly account keeping fee (lol!) and no early repayment fee.

That said, it was like dealing with a bank from a previous era (no major dramas, just a little behind the times i would say)

Stu

neil248

Similar to us and also a friend at work who several months into his loan had not even realised he had been stung for this fee. In our case the car was for my wife and I only realised that the fee was there at a late stage and in the emotions of a new car purchase I took it on the chin as the overall deal was still OK.

AVOID DEALER FINANCE, don't be lazy and get your finance sorted before you look at a car.

Another thing is weekly rates always seem to be quoted and only an extra 10 dollars per week actually represents 2600 dollars over a five year loan.

Dealerships will also add as much as they can to the finance deal and even sell you cover for damaging your alloy wheels and tyres if you are daft enough. It was an unpleasant experience dealing with a financial person who would not accept that I only wanted to pay for the car and not the stupid options he was trying to sell me.

Had a look at CUA and I may be wrong but it seems their rates are variable which could be nasty if interest rates go up. With something like a car loan a fixed payment each month is probably more comfortable to work with.

One no nonsense lender is Suncorp, take a look at their online calculator for a benchmark of what a fixed rate car loan might be.

It seems that even if you think you are on the ball getting finance for a car is fraught with little things to catch you out

phat-dave

one point to note is that dealership finance is as negotiable as the vehicle itself, whereas the offers by an institution are not. i'll even go so far to say they're that hungry to do business with you, typically it will be a better offer than a bank/credit union of your choice.

reputable dealers, particularly those tied to a new vehicle franchise are dying for opportunities to provide finance - not only do they get up front incentives like the origination fee (completely negotiable) they also get volume based incentives from their floor plan provider - ie: you might get a ripper deal but theyve managed to screw 50 other chumps in the month so they make up their dough from you there.

for a vehicle i really dont get the point of going for an unsecured loan - im sure no one has the intention to not pay their commitments so it's a no biggy and generally the reward is a lower interest rate thus lower monthly repayment...

and always compare repayments only, not interest rates, not "fees" - the monthly payment.

neil248

and multiply this over the period of the loan and you have the total cost of the loan to give a true comparison between lenders.

Doing this kept us in the lower category of chump as I did get myself a benchmark to work with.

I was surprised at how under handed a financial representitive in a Mitsubishi Franchise could be, the guy only lasted a few months there so maybe he did them no favours either.

Steve2009

You can never underestimate how underhand a lender can be!