Australia
Car Loans in Australia: What to Compare Before You Sign the Finance
Dealer finance is convenient and usually the most expensive option in the room. Compare it against pre-approval.
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- Typical secured car loan
- 6%-12%
- Dealer finance premium
- Often 2-5 points higher
- Comparison rate
- Required to be disclosed
- Deposit effect
- Lower rate, lower total
Get pre-approval before the dealership
A bank or broker pre-approval sets a benchmark. Dealer finance rarely beats it, and you cannot tell without one.
The comparison rate covers the fees
Establishment and monthly fees are folded in. Dealer finance frequently has both and a higher rate on top.
Watch the balloon payment
A balloon lowers the monthly figure and leaves a large sum due at the end. If you will not have it, the loan is longer than it looks.
Secured loans put the car at risk
The lender can repossess on default. That is why the rate is lower - price the risk against your buffer.
VerdictGet pre-approval first, compare on the comparison rate, and avoid balloons unless you have a plan for the final payment.
FAQ
Is dealer finance always worse?▾
No, but it usually is. Compare.
Should I take a balloon?▾
Only if you can pay it or plan to sell.
Does a deposit help?▾
It lowers the rate and the total.
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