Car Loan Advice for Australian Families

Dropping the kids at school. The mad rush to get to work. Grocery shopping. Birthday parties. Football and soccer. Trips to the vet. The faithful family car is a central part of this busy schedule.

But as your family grows, your needs will no doubt change. You may need the space of a SUV or the bells and whistles of a large sedan. Whatever you’re looking for, there’s sure to be a car out there that matches your needs.

But while it's fun to test drive a bunch of different cars, it's just as important to consider the less exciting details. After you choose the car you want, the second most important decision will be the car loan.

Car loan advice: which features do you need?

Car loans can be confusing and difficult to compare, that's why you should identify the features that are important to you. Always remember to check the comparison rate when comparing different loans so that you're aware of the true cost of each loan, including the interest rate and additional fees and charges.

Some car loan features to consider are:

• Early payout – Some loans do not allow you to pay off your loan early or will charge fees for doing so. You may want the option to pay off the loan early if your circumstances change in the future.
• Fixed vs. variable interest rate – A variable interest rate may increase or decrease over the loan term whereas a fixed interest rate will stay the same.
• Secured or unsecured – Secured car loans typically have lower interest rates than unsecured loans because the lender has the right to repossess the car if the loan is in default.
• GAP insurance – This covers the difference between the value of the car, covered by regular insurance, and the amount still owing on the car loan.

Once you know which of these options are the most important for your family, you'll be able to compare only the loans that have those features and choose the one with the lowest comparison rate. That way, you'll get the features that are important to you and won't be paying for anything that you don't need.

What to look for when buying a car

Sorting out car finance early will leave your schedule free for the fun part: going to car dealers and driving away in your new car!

With that in mind, here is some general advice to keep in mind when buying a car:

• Safety – Keeping your family safe is the most important thing when it comes to driving, so always look for cars with a 5 star ANCAP rating.
• Reliability – If you're buying a new car, you'll want it to last as long as possible. Some car manufacturers are now offering cars with five and even seven year unlimited kilometre warranties.
• Deals – Car dealerships often have deals for run-out sales that you can look out for. It's also a good idea to shop around at different dealerships and negotiate with salespeople.
• Reviews – A spiel from a salesperson might not tell you everything you need to know about a car, so it's important to read car reviews before you make a decision.

Get car loan advice from the experts

At Rapid Finance, we can help you consider the different options that are available to you. Our car loan specialists will guide you through the process of finding finance for your new car.

For expert car loan advice, call the Rapid team on 1300 467 274.