Whether you’re in the market for a new campervan, a trusty 4X4, or a reliable car to pull the caravan, you’re going to need some cash to put those new wheels on the road. Now, you could clean out the savings account or sell some of that silverware your dear old gran gave you, but we have a much easier way in mind. Yes, that’s right, car finance and before you roll your eyes, it’s actually a much better option than you think.
What is car finance?
As you probably know car finance is when you borrow the money you need to buy a car from a bank or finance company. You then repay the money over a period of time which usually runs from one to seven years. The lender charges you interest for the term, and you get a new car on the road. Happy days.
Why is finance a good idea?
Car finance or even caravan finance is a good idea because it allows you to buy a new vehicle without having to make a significant cash payment up front. Yes, you will have to pay a deposit, but you can often choose how much to pay once it’s over a required minimum. This means that you can keep that nest egg for a rainy day or spend it on more important stuff than a new car or campervan. Your next big holiday for example!
Contrary to popular belief, car finance isn’t as expensive as you might think. With a good deposit and a balloon payment at the end of the loan term, your monthly repayments could be quite affordable. Still unconvinced? Check out this calculator to see what your best car finance repayments could be over your chosen term.
What are my options?
When it comes to car finance, you have a few options.
Unsecured car loan
An unsecured car loan is also sometimes called a personal loan. With this type of car finance, you get full ownership of the car as soon as you buy it and your loan is not secured on the car. You can choose to make your payments over one to seven years, and you can choose either fixed or variable interest rates. This is one of the most popular choices for a loan.
Secured car loan
Also known as a consumer loan, this loan is similar to the unsecured loan in many ways. However, at the outset, while you take ownership of the car, the lender takes an interest in the vehicle as security over the loan.
The novated lease is an agreement between you, your employer, and your lender whereby your employer takes on the responsibility of making your loan payments. Now, this doesn’t mean that they are paying your loan, it just means that they will take your repayments out of your wages before you pay tax. Yes, we said before you pay tax. This was once considered a company car package, but it is anything but. All you need is an employer who is willing to help you out, and you’re good to go.
The novated lease is popular with car drivers, but you can talk to your finance broker to see if you can use this type of finance if you are buying a campervan.
So if you’re seriously thinking about a new campervan or a car to pull that caravan, then give some consideration to finance. It’s one of the simplest ways to get your hands on a new vehicle without wiping out your savings. Besides you need those savings for all the awesome holidays you have planned, right?
As Australia's largest car finance broker, Stratton Finance know a thing or two about loans and finance. With over two decades of experience in the field they are one of the most trusted authorities in the industry.