Are you in the market for a used car? There is a lot to consider just as with any major purchase, such as where to buy your used car from and how much you want to spend. In this post we look at the considerations you need to make before deciding on applying for a used car loan. We’ll also discuss how to go about applying for a used car loan and the benefits of having one.
Let’s begin with the following considerations before buying
- Your budget. Working out how much you can afford to spend is the first step before you go looking. Using valuation sites like Red Book will guide you on the value of any cars you’re interested in.
- Your needs. What will you use the car for? A growing family may mean a bigger car, or a smaller first car might be more useful for someone to practice driving.
- Safety & Security. What safety and security features do you want your car to have? Newer used cars may have better safety ratings so it is important to do your research.
- Insurance and green slip costs. We require car loan customers to have their vehicle comprehensively insured. You can visit our page on car insurance for more information. We also offer CTP Green Slips.
- Environmental impact. You can check the car's fuel consumption and emissions rating by using the Australian Government Green Vehicle Guide.
- Dealer, auction or private sale? Decide where and how you want to buy a used car.
- Regulations. There are a number of checks and reports you can access when buying and selling used cars. More information on the Service NSW website.
- Money owed: It’s a good idea to check if there is money owing on the car. See the PPSR website for more information.
Applying for a used Car Loan - Get pre-approval
It is important to ensure you know how much you can afford. Use our car loan repayment calculator to estimate how much repayments will cost you. Securing pre-approval before buying a car is a great way to know how much you can borrow. Our used car loans have a loan period of up to five years. Speak with one of our lenders about extra loan features such as paying off your loan early and redraw facilities. They’ll also talk to you about taking advantage of our competitive rate.
Secured or Unsecured?
To put simply, when you take out a secured loan, you are offering up something as collateral should you be unable to repay your loan. You can secure your used car loan with a vehicle, savings or even your mortgage, subject to eligibility criteria.
You may have the option to take out an unsecured loan for your used car, but you may be repaying it at a higher interest rate than a secured loan.
Benefits of a used car loan
Flexible repayment options
Having a used car loan will allow you to make repayments to suit your budget and income. Having the flexibility to pay weekly, fortnightly or monthly will help you manage your expenses. You can use our budget pay calculator to see how your used car loan repayments will fit in with your expenses and affect your savings ability.
Instill money management habits
If a used car loan is your first experience with repaying a loan, it will require disciplined saving and money management. You must make regular repayments to avoid falling behind, which will force you to prioritise your spending.
Building your credit report
getting a used car loan helps you build a credit report. This can be very helpful when applying for other loans in the future. You can read more about credit reports on our website. Speak to one of our lenders before applying to determine eligibility, as applications for credit that are denied are recorded on your credit profile.
If you’re looking for a Used Car Loan, get in touch with us today. We’re here to make the process easy and provide a great experience.
The content in this article has been prepared by Horizon Bank for general information only and it is not intended to be professional advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice where appropriate, and consider the relevant Product Disclosure Statement and Terms and Conditions before deciding whether to acquire any products or services offered by Horizon Bank and/or its affiliated partners. We do not recommend any third party products or services referred to in this article unless otherwise stated and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. Horizon Credit Union Ltd ABN 66 087 650 173 AFSL and Australian Credit Licence Number 240573 trading as Horizon Bank.