You have two options when buying a car. You can pay cash or finance it. You might not have considered Car finance in the past, but there are some advantages to it.
Rather than using your cash to purchase a new (or nearly new) car outright, it’s wise to preserve it for other investment opportunities that will appreciate in value. All new cars come with a warranty, which means fewer breakdowns and repairs.
Car Financing Has 4 Benefits
Here are some of the benefits of financing your car purchase.
The first was. The vehicle can be purchased with a 100% loan
Buying a car urgently doesn’t require saving all or even part of the money. After the dealer has prepared your vehicle and arranged the paperwork, you can drive away in your new car. Car financing makes sense if the repayments are manageable.
ii. Tax deductions for car loans
Tax-deductible finance costs can be incurred by a business that borrows money to acquire a company car. You can claim the interest on the car loan, insurance premiums, repairs, servicing, and more, according to the ATO.
The third point. Other things can be done with the money.
If you have a family to support or a business to run, spending a large sum up front on a car isn’t always the best option. This cash may be needed for unexpected expenses, like a medical bill or an urgent business expense.
Four. Establishes credit
When you pay your car loan on time, you establish a good credit history. If you need to finance other things in the future, like a home mortgage or business loan, this will be very useful.
Car Financing Options Overview
If you choose to finance your car, you have a few different options to choose from. Here’s a quick look at each to help you decide which is best for you.
Loans for individuals
Pay back a lump sum plus interest over a period of time, usually up to 5 years, by borrowing a lump sum and making regular repayments. Unsecured or secured. Interest rates on secured loans are lower. Loans usually last between one and seven years.
Loans for cars
The car being purchased acts as collateral for the loan, similar to personal loans. Your car may be seized if you default on your loan repayments. You typically pay less interest with secured loans.
If you have a low-interest credit card, you can use that to pay for the rest. Credit cards may be available with 0% introductory rates for a maximum of 27 months from certain lenders.
The monthly rental and interest rates, as well as maintenance and repairs, are fixed when you rent a car for a specified period. The car may be available for purchase when the lease expires.
Buying a job
Deposits are paid and monthly payments are agreed upon. You purchase the car once the final payment has been made, then the business uses it for a certain period of time.
You own a car from the first day you receive a loan to buy it. An unsecured loan would have higher interest rates, but the secured loan has lower interest rates.
Salary package that includes a car. In order to pay the lender, your employer deducts pre-tax salary for vehicle payments and maintenance. Businesses with multiple vehicle requirements for their staff will find this type of financing attractive due to the tax benefits associated with it.
Car rental is similar. A rental fee is charged only when the vehicle is used. Buying it requires no capital investment and involves no risk.
Looking for car financing? Contact us
For car financing options that fit your needs, contact Westminster today. You can shop for a car at your leisure and avoid a higher interest rate from a dealer when you use our car finance brokers.