When you apply for financing, there is quite a number of things that happen. That can be quite confusing for people who have never purchased a car before or are just unsure of what they need to do. Being a professional car financing specialist, we help people apply for and secure car loans on a daily basis and would love to help you understand more about what happens! Read on!
In order to get a good finance quote from a credit union, bank or other lending institution, you’ll need to submit your personal and financial information to the company so that they can assess risk and crunch figures based on that risk. Some details you will need to provide will include your personal identification documents, employment and income proof as well as details about your credit score and assets in holding. Whether you are going through a dealership or broker or applying for a loan on your own, once the information is submitted and application documents are filled, you should be seeing a financial quotation come in from the financial companies in no time!
Offering You a Interest Rate
Once your details reach your financier, they will do what they do and send you back a quote which will tell you how much they are willing o loan you and at what interest rate. Each financier has their own algorithms to go buy and it may be a good idea to cast your net wider so that you can get a number of quotations to choose from. If you’ve gone through a dealership or broker, they may add on 1-2% as a commission or brokering fee. They may also offer you a packaged deal if you are buying everything at the dealership, or looking at insurance at the same time too.
Where there are no discounts from the dealerships, you may want to try your hand at negotiation a car financing rate after they have quoted you their figures. As we mentioned, they add on to the base rate from the financiers and that additional charge can be adjusted depending on how desperate they are for the sale. A lower rate for you means a smaller earning fee for them, so it’s not likely that they will go low all the way! If you’ve got your quote directly from the banks, don’t expect to negotiate those figures though – banks are notoriously less willing to compromise on their rates!
Finalizing the Loan
When you are comfortable with the terms and conditions and ready to sign the contract, it’s important to make sure that you know how the car financing plan will work for you. Ask for an illustration that will document your deposit, monthly payments and balloon payments (if any) clearly and concisely for the length of your loan tenure. Ensure that the financing approvals are final before you go ahead to sign for the car and that everything is FULLY in order lest things change at the last minute!
Navigating a car financing plan can be quite stressful, which is why we see so many people come to us for help. You can explore the option of having someone experienced and professional in handling car financing and insurance plan in Australia with The Smarter Finance Company at no obligation! Give us a call and find out more about what we can do for you today!