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Posted on 2017-12-08

5 ways to make your new car finance as fast as your new car

Buying a new car is the exciting part, it’s the finance that can get a little tricky. Especially when you don’t have the option to compare different lenders and rates so you know you’re getting a good deal.

To make the process simple, it helps to take things step by step to give yourself the best chance for approval.

This checklist can help you find a competitive car finance solution, avoid pitfalls, and get a loan that you’re happy with.

1. Know the worth of your current car

Many new car buyers trade in their old cars and use the funds towards their new car or savings.

You can know the worth of your car by:

  • Looking for similar makes and models for sale online
  • Getting a quote from a dealership
  • Online sale prices with the market value of your car. You may be able to find this info if you review your insurance policy
2. Set a budget that you’re comfortable with

Setting your own budget when you’re searching for a car loan gives you a good guide to select a model that won’t break the bank.

If you need help to set a budget, you can:

  • Use a repayments calculator
  • Talk to a broker (or lender) if you already have a loan in mind
  • Talk to your existing mortgage lender who may be able to see if you have the equity to refinance and purchase the new car
3. Have an idea of your credit health

Lenders use credit file data, as well as other information, to see how likely you are to be able to afford and repay a debt.

Your credit file includes information such as:

  • Applications and outcomes for loans
  • Repayment history for loans and utilities – they can see if you pay things late or on time
  • Any defaults or arrears

If you have bad credit, it doesn’t mean you can’t get finance, you just need to do some more research and give yourself options.

4. Request a pre-approval

Applying for pre-approval from a broker or lender can give you more confidence to know how much you can borrow. It also makes the loan approval process quicker as you already do a lot of the paperwork during the pre-app process.

To apply for pre-approval:

  • Gather pay-slips and have 100 points of ID ready
  • Talk to a lender or broker to identify options
  • Apply for pre-approval to get a borrowing amount
5. Try compare at least 3 loans

Just like making any significant purchase, having options is an important part of getting a good deal.

To compare at least 3 loans you can either:

  • Research different rates online
  • Talk to a lender or broker about options based on your income, liabilities and credit health
  • Identify 3 products and compare rates, fees, term lengths and benefits before you sign the contract

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