Buying used car, reliable way how to finance ?

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martin85

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#108810 6-Sep-2012 00:46

Hi,

do you have any experience with companies/dealers offering car loans (financing) ? Are there any major "reliable" companies ? I checked AA and Turners so far. I would like to have used car with the price of 7k - 10k at max, petrol, station wagon.

I have stable job, but Auckland public transportation sucks, i cant wait 4-5months to get a car in cash.
I always read through all conditions and i always compute how much in total i will pay for it and if there is a chance to pay everything sooner without any fees etc... but i would like to know what locals would do ;)

thanks

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#682093 6-Sep-2012 06:07

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mjb

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#682105 6-Sep-2012 07:47

Your bank.

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timmmay

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#682107 6-Sep-2012 08:07

mjb: Your bank.

This.

floydbloke

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#682108 6-Sep-2012 08:09

Do you own any property, have a mortgage? Tacking it on the end of that (if the bank will let you) will be the cheapest, and most convenient way for repaying.

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#682118 6-Sep-2012 08:33

mjb: Your bank.

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#682123 6-Sep-2012 08:51

floydbloke: Do you own any property, have a mortgage? Tacking it on the end of that (if the bank will let you) will be the cheapest, and most convenient way for repaying.

This.

If no mortgage, then take out a personal loan from your bank. It'll be the next cheapest and safest option.

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#682173 6-Sep-2012 10:09

Theres plenty of car finance companies, and most car dealers have arrangements with one or another. But as others have said, borrow the money from your bank, it'll be a lot cheaper and there won't be any penalties for early or late payoffs or late payments.

Car finance for the price range you're in, is seen as higher risk (due to defaults) so you'll pay a much higher interest rate.

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scuwp

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#682194 6-Sep-2012 10:49

+1 on your bank.

If you have property to lend against then you will likely get a cheaper interest rate.

Putting it on the mortgage is a good idea if you can, best interest rate you will ever get. However set yourself an individual repayment plan for the car loan if you do this. I haven't done the maths but it doesn't take much imagination to work out that your $7,000 car repaid at 5 - 6% interest over 20 or 30 years will end up costing you an absolute fortune.

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#682209 6-Sep-2012 11:19

scuwp: +1 on your bank.

If you have property to lend against then you will likely get a cheaper interest rate.

Putting it on the mortgage is a good idea if you can, best interest rate you will ever get. However set yourself an individual repayment plan for the car loan if you do this. I haven't done the maths but it doesn't take much imagination to work out that your $7,000 car repaid at 5 - 6% interest over 20 or 30 years will end up costing you an absolute fortune.

It won't make any difference if he sets up an individual repayment plan for the car loan or not. The extra payments he would make there could've been used to pay off the rest of his mortgage, so either way he'll be paying more. If you're suggesting increasing his repayments, then of course that makes sense but he could've done that a year ago and been in an even better position now.

Bottom line, borrow as little as possible and pay back as much as possible! :)

Incidentally, borrowing $10k @ 6% for 30 years ends up costing an extra $11,600 in interest (about $60 month repayments). If you can afford $200 extra per month then you'll have paid off the $10k in under 5 years and only cost yourself an extra $1600 in interest. Maintain that $200/month and you'll cut years and a ton of interest of your mortgage.

martin85

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#682216 6-Sep-2012 11:32

Thanks, i will try to ask in my Bank but as a foreigner i do not have NZ driving licence or credit history so i dont think they will allow me to apply.

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#682219 6-Sep-2012 11:44

martin85: Thanks, i will try to ask in my Bank but as a foreigner i do not have NZ driving licence or credit history so i dont think they will allow me to apply.

Hope you plan on getting your license before hitting the road in your new car ;)

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martin85

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#682222 6-Sep-2012 11:46

Yeah, i have international driving licence. I am very good driver ( in the right lane only ;) ).

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#682243 6-Sep-2012 12:26

If you plan on paying it off quickly, you can look at low interest credit cards. You can get balance transferred credit card rates of around 3% for 6 months. But this would require you to have two credit cards, which you may not be able to do, depending on your credit rating.

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#682284 6-Sep-2012 12:56

martin85: Yeah, i have international driving licence. I am very good driver ( in the right lane only ;) ).

An international license is not a NZ driving license and I don't think anyone will finance you (and possibly insure you) into a vehicle if you don't have a NZ driving license.

And BTW, in NZ we drive on the left.

martin85

11 posts

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#682292 6-Sep-2012 13:00

Thank you for advices.

Turners Finance allows to finance people with international driving licence with 25% deposit. Yeah i know you are driving on the left ;)

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