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What is a car loan?
Whether you’re shopping for your first car, looking to upgrade or need a replacement vehicle as soon as possible, a car loan can make the process simple and more affordable.
A car loan is considered a personal loan to most banks and can be used to purchase a new or used car if you can’t afford to make an upfront payment. The loan is given to you as a lump sum and the car is yours to drive while you make weekly or monthly repayments.
You will be given a specific amount of time (i.e. a term) to repay your loan — depending on your loan provider, you can choose from a three or five-year term. During this time, you will also need to pay interest on your loan.
At Watson Mortgages, we can help find a car loan in Newcastle that’s both manageable and affordable, so you can keep up with loan repayments and keep your wheels on the road. Learn more about car loans below or contact us for expert recommendations and advice — we’re one of the leading car brokers in Newcastle.
Why choose Watson Mortgages for car loans in Newcastle?
Watson Mortgages is dedicated to helping you find a car loan in Newcastle, Lake Macquarie, the Central Coast and the Hunter Valley.
Because we’re committed to finding you competitive car loans in Newcastle and surrounding suburbs. Interest rates and repayment terms vary from lender to lender, and we understand that it can be stressful comparing quotes and making the right choice. Our brokers are here to make choosing a car loan easy — we have close relationships with more than 20 lenders including Australia’s big banks and we can find a car loan and an interest rate that suits your needs.
Here are just a few of the other benefits of choosing Watson Mortgages for car finance in Newcastle:
- We’ll manage the whole process from start to finish. We’ll help find the right car loan, communicate with lenders on your behalf, submit documents and secure a loan for you, so you can focus on finding that dream car.
- Our services are complimentary and convenient. Our brokers can meet at your location, or we can have a more formal meeting in our office.
- We’ll find a competitive rate for your car loan, so there will be less pressure when it comes to your monthly interest payments.
- We have the experience and expertise to provide debt consolidation advice so you will feel supported and on top of things from day one.
Get a car loan in Newcastle with ease. Contact Watson Mortgages for more information about securing a manageable car loan today.
The pros and cons of car finance in Newcastle
A car loan is an easy and affordable way to purchase a new or used car. Of course, there are pros and cons to getting any kind of loan. You will need to consider this before making the decision to apply for a car loan.
Some of the advantages include:
- You can purchase a car without having to make an upfront, out of pocket purchase.
- A car loan can help build and improve your credit history. So long as your payments are on time, your credit score will increase and improve your chances of securing a larger loan in future e.g. a home loan.
- Secured car loans come with very low-interest rates and will help knock a few thousand dollars off the total cost of your car/loan.
- If you are purchasing a car for business purposes, the payable interest and running costs can be tax-deductible.
Some of the disadvantages include:
- You will need to pay interest and depending on the lender, some general fees. However, car loan interest rates tend to be quite low and manageable.
- Under a secured loan, your car will technically be owned by the bank. If you fall behind in repayments, your car will be at risk of being repossessed.
- Cars depreciate in value over the period of the loan. Sometimes, the amount you still owe is more than the current market value of your car. This can be a problem if you want to upgrade mid-term because you will need to pay the gap.
When it comes to car loans, the pros far outweigh the cons. To discuss car loan options, please contact us on (02) 4018 7505 today.
Contact Watson Mortgages for an obligation-free consultation
Frequently asked questions
What kind of car loans are available?
There are a wide range of car loans available:
– Secured car loans — The loan is secured by the car and the lender has the right to repossess your car if you fall behind on payments. The interest rates tend to be lower because this loan is less risky for the lender.
– Unsecured car loans — The lender has no collateral on the borrowed money or your car. This is considered to be a high-risk loan to the lender and interest rates tend to be higher.
– Chattel mortgage — A common kind of business car finance. You claim the total GST amount from the purchase price on your next BAS statement.
– Hire purchase — A commercial finance product where you can hire the vehicle you need for your business over a fixed term period.
– Car lease — This is a kind of renal agreement that allows you to rent a car for a period of time. You will buy out your lease at the end of the term.
– Novated lease — A finance option where your employer pages for your car lease from your pre-tax salary.
We will help you choose a car loan that suits your specific needs and requirements.
Do I need to provide proof of income?
Yes. Before you can get a car loan, the lender will ask for proof of income i.e. documentary evidence that you earn as much as you claim and can handle the repayments. Lenders will normally ask for documents like tax returns, payslips and bank statements.
What is residual value?
The residual value of a car is how much it will be worth at the end of the lease period. Lenders need to calculate the car’s residual value before they know how much to charge during the lease period e.g. if the lender calculates that a $30,000 car will have a residual value of $16,000 at the end of a five-year lease, the lender will know to charge $14,000 to break even on the lease and make a profit.
What interest rate will I have?
It depends on the lender you choose. However, we will compare interest rates among 20 lenders and find a car loan rate that suits you.
Can I pay out a car loan early?
Yes. You can make additional payments to prepay all or part of the balance of your loan at any time. Some lenders will charge a processing fee or early payout fee but we will look for lenders who will not charge you for an early payout.
Can I sell the car during the loan term?
Yes, but you will have to have the lender’s consent and settle your financial obligations under the contract before the lender can remove their encumbrance over the security.
Can I get a car loan with bad credit?
Yes — we will work hard to find a loan that works for you, even with a bad credit score. It is also possible to get a car loan if you have been rejected for a car loan before.
Can anyone get a car loan?
If you’re an Australian citizen or permanent resident, over the age of 18 and have some sort of regular income coming in (including Centrelink payments), you can get a car loan.
How much can I borrow?
All lenders and loans are different, so there’s no set answer to this question. Your borrowing power depends on your financial situation including your income, savings, debts and credit history.
Can I buy a car privately or do I have to buy from a dealer?
How you buy your car is up to you — there are no limitations on where you buy your car. You are also free to finance a second-hand car. Some dealerships will encourage you to finance your new car through them but this is not mandatory.
Can I have more than one car loan at a time?
Yes, you can have more than one car loan at a time but it does depend on the lender and whether you can afford multiple loans at once.