Buying A New Car On Finance? You Must Read This Guide Before You Buy!

September 12, 2019

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Thinking about buying a new car? Awesome.

Planning to borrow money to do so? 

Don’t sign anything without reading this article.

Lots of Kiwis will buy their next new (or used) car from a dealer.

You’ll head to the car yard, test drive a few vehicles, then enter into the classic conversation with the car dealer where you start talking about warranty, registration and price.

Most car yards in New Zealand will — conveniently — offer you the chance to buy your new car on finance. 

They’ll even advertise their vehicles in terms of “from $XX a week”, instead of actually telling you the true price of the vehicle. 

Now, when you’re on the spot, standing next to the car you’ve had your eye on and the dealer is next to you offering to do the paperwork there and then…

It’s important to stop and consider whether this seemingly convenient option is, in fact, the best and most financially sensible for you.

While most people will jump at the chance to get in the car and drive it out of the dealer’s yard, the reality is you probably aren’t being offered a great finance deal.

How To Get The Upper Hand When Negotiating To Buy A New Car

The reality is that some car dealers are experts at confusing prospective buyers into forgetting the true value of a car and signing up to a less-than-great finance deal just so they can drive it out of the yard the same day.

There is one major thing you can do — without spending a cent — to give yourself a better chance of negotiating a fair deal with the seller and not get taken advantage of. 

What is it?

Simple: Get a quote or pre-approved car finance application for the amount you’re willing to pay for the vehicle. 

(You can do that with Loanplace right here, by the way.)

This gives you a strong idea of how much the loan should cost you based on your budget and credit score.

If the car dealer tries to talk you into a deal that offers you less value or costs you more money than your pre-approved application shows, you’ll know they’re potentially looking to take advantage of you.

To learn more about your credit score (an important part of the car finance process), read our article here.

Make Sure You Protect The New Car You’re Borrowing Money To Buy

If you’re borrowing to buy a new car, there’s another thing you must consider before taking an on-the-spot finance deal from a car dealer.

As soon as you buy a new car, you’re taking on a set of liabilities — things that might end up costing you money as you use the vehicle.

It’s worth considering whether the finance deal you opt for offers you any protection for things that might pop up in the future.

Don’t let a car dealer sweet talk you into taking an average car loan just so you can drive away on the day.

Make sure you get a deal that delivers maximum protection.

Obviously, we wouldn’t be telling you this if we didn’t offer that type of additional protection here at Loanplace.

When we work with our customers on creating the perfect car finance deal for them, we’re able to offer a range of bonus services, such as:

  • Comprehensive Vehicle Insurance

Protects your new car against fire, theft and collisions no matter whether you hit something or the unexpected happens.

  • Iron-Clad Mechanical Cover

Full breakdown and repair insurance to cover you if you need to pay for towing or mechanical work.

  • Protection Against Loss Of Value

Stops you from having to make big repayments on a car that’s no longer worth what you paid for it.

  • Financial Protection In Case Your Situation Changes

Cover yourself in case employment or family events prevent you from being able to make your car loan repayments.

Is your car dealer offering you any of those options? Ask them. If not, why not?

We encourage you to do your research, understand your credit score and ideally approach buying a new car with a pre-approved finance application to stop sellers trying to take advantage and keep the real value of the vehicle hidden behind confusing finance deals. 

Our team are experts on the ins and outs of car finance — meaning we know ALL the tricks other lenders will try to use to get you to take a loan that might not be ideal for your situation.

To discover how much you might be able to borrow for a new car, get in touch with us today for a free, no-obligation consultation.