3% Discount Car Finance… …Fact or Fiction?
You see signs plastered all over the television, in newspapers and on the radio advertising their special rate.
Wow you think – that’s less than half the rate of the average home loan…..How can they offer that on a new car?
Thing is they can’t – well they can’t unless they have something to offset the loss. Interest rates are always based on rate for risk and cars are risky items to finance. They depreciate rapidly, are prone to accidents and theft and so, in the worst case scenario, finance companies can struggle to recover their money in the event of a repossession. That’s why true car finance rates will always be more than home loan rates (after all homes generally appreciate in value and don’t usually go missing!). So where do they make up this loss? The car purchase price of course – you’ll be forced to pay top dollar if you want that rate!
Timing is Everything…..
And when do they offer these great rates on car finance???? Think about it??? Would it be around Christmas time perhaps? And why do you think that is?
Because in a couple of weeks your brand new car is going to be “Last Year’s” model…………. If you had only waited a couple of weeks, instead of paying top dollar and getting a so called great rate and discount car finance. The dealers would actually be giving you a fantastic discount on your new car because they now have last year’s cars on their lot…………..
And what about the other times of the year???? Suddenly your brand new car that you have had barely 3 months has just become the “Old Model” and you paid top whack for it. Yep….you got it. New model coming soon. In fact, so soon, that your new car still has that new car smell. If only you had waited a bit longer, you could have had either your choice of the new model at the same price or the old one with a further discount thrown in.
And that is why rate is not the most important aspect of a deal when you are looking for new car finance. You need to compare “Apples to Apples”
Example: $25,000 car over 5 years at a rate of 3% . Repayment is $448 per month
Same car discounted to $22,000 over 5 years at a rate of 9.5%……Repayment is $458.
Not much difference is there? Discount the new car just a bit more and the standard rate car finance soon becomes the better deal.
That is why you should use a licensed New Car and Finance Broker like Just Cars Finance. With JCF you will not only get a New Car for Less but we will get you the best new car finance available.
Call us Now 1300 142 277 for the best discounts on New Cars and New Car Finance
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