Looks like I will swing towards a bank loan (at least now am not limited to looking at dealer only auctions on trademe) but ill see what deals the dealers can do aswell.
Get the bank loan approved before you settle on a price fo the car too. Then you will effectively be negotiating with the dealer as if you are paying cash - whiuch means you shoudl be able to get a more favourable price.
e.g. say car is priced in dealer at 12k. If you take dealer finance then you probably won't get much off that price. If you go to your bank, get a loan for 12k approved then tell the dealer you will be paying cash, then you will probably get more off. If you get it for 10k in the end, then just immediately repay the 2k difference (not sure about other banks, but westpac definitely let you repay early with no penalty)
Personally I do not believe it?s a good thing to finance a car as a generally car values depreciate quite rapidly so if you can you better pay for the car upfront. Also if you have a business and do not want to pay for the car upfront the better option instead of finance to lease a car as you can write it off as a business expense. But if you have to finance bank is a best option for interest rates.
Just coming to the end of my 3 year car finance term with GE finance (who no longer do car loans) in the next 2 months. This is the second car ive paid off and will be the last.. First car loan was with the bank at about 6%, the bank wouldnt give me a loan as i had just started a new job, so my parents stepped up and got it under there name which was great.. Once again i approached the bank a couple of years later and got turned down for another loan, so the car i have now is on 22% or thereabouts, its rediculously high, but i wanted the car and didnt really look at the fine print or consider what it would cost me in the long run.
IF you can get a bank loan i say go for it.. They are not easy to get! The interest rate has shot up though, the days of 6% are over by the looks of it, unsecured loans are roughly 16.95%pa accross all banks with secured loands at 14.95%
The first car I got in NZ was through finance, about 1.5 year ago through the dealer, and I got 22% as well. The car ended up being crap and I ended up returning the car to the dealer (after lots of stuff) and the finance was repaid. The finance company was together with GE.
On my current car finance I got a much better rate (~12%) which, although not as good as 6%, is very good considering my small credit history (only been in the country for about 3 years).
"Roads? Where we're going, we don't need roads." - Doc Emmet Brown
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