Fast finance vs comparing the market when you’re buying a car, caravan, truck, ute or other vehicle, getting finance quickly is one thing, however comparing the market can be important also. You may have found the right vehicle, negotiated a good price and want to move ahead before the opportunity disappears.
But there’s an important question to ask before accepting the first finance offer:
Have you properly compared your finance options?
A fast loan approval can be convenient, but the first finance option you’re offered may not necessarily be the most suitable option for your circumstances.
At AAA Finance, we believe it’s worth looking beyond a fast loan offers and understanding the finance options available to you.
Fast finance is convenient — but comparison matters
There’s nothing wrong with wanting a fast finance application. In fact, speed can be valuable when you’re purchasing an asset and need to know how much you can borrow.
However, focusing only on how quickly a loan can be approved can mean overlooking other important factors.
Two finance options may have different:
- Interest rates
- Comparison rates
- Establishment and ongoing fees
- Loan terms
- Repayment structures
- Balloon or residual payment options
- Early payout conditions
- Lending criteria
- Convenient loan features (eg. changing payments during the loan)
That’s why it can pay to look beyond the headline rate and consider the overall cost and structure of the finance.
What does comparing car finance actually mean?
Comparing finance isn’t simply about finding the lowest advertised interest rate.
A proper comparison should consider the overall loan structure and how it fits your circumstances.
For example, a loan with a lower advertised rate could still have different fees or conditions compared with another option. Similarly, choosing a longer loan term may reduce your regular repayments but could increase the total amount of interest paid over the life of the loan.
Before choosing vehicle finance, consider:
1. Interest rate
The interest rate is an important part of the cost of borrowing. However, the rate you are offered can depend on factors such as your application, loan amount, vehicle and lender criteria.
2. Comparison rate
Where applicable, the comparison rate can help you understand the cost of a loan by incorporating certain fees and charges in addition to the interest rate. However, these are often examples and not accurate to your approval.
3. Loan term
A longer loan term can make repayments more manageable, but you could pay more interest over the life of the loan.
4. Fees and charges
Always look beyond the interest rate. Depending on the product, there may be establishment, application, ongoing or other fees.
5. Loan structure
Depending on your circumstances and the type of vehicle you’re purchasing, different finance structures may be available.
For example, business and commercial customers may consider options such as a chattel mortgage, finance lease or hire purchase.
6. Repayment flexibility
It’s also worth understanding whether you can make additional repayments, refinance or pay out the loan early and whether any charges or conditions apply. Loan features, such as lump sum payments with repayment changes may be something you value over all other features.
Why use a finance broker?
Researching lenders yourself can take time.
A finance broker can help simplify the process by assessing your requirements and, where appropriate, comparing finance options from lenders available through their panel.
Rather than simply asking, “How quickly can I get approved?”, a broker can help you consider a broader question:
“Which available finance options may be suitable for my circumstances?”
At AAA Finance, we work with customers looking for vehicle and equipment finance and help them navigate the finance application process.
Don’t compare rates in isolation
One of the most common mistakes when comparing finance is concentrating entirely on the advertised interest rate.
The lowest advertised rate isn’t necessarily the rate every applicant will receive, and the cheapest-looking option isn’t automatically the most suitable.
Instead, look at the bigger picture:
Rate + fees + loan term + repayments + loan structure + overall cost
This gives you a more meaningful basis for comparing your options.
Fast finance doesn’t have to mean limited choice
Getting finance quickly and comparing your options aren’t necessarily opposites.
The important thing is to make sure speed doesn’t come at the expense of understanding what you’re signing up for.
Whether you’re buying a new car, used vehicle, ute, van, truck or equipment, taking the time to understand your finance options can help you make a more informed decision.
AAA Finance can help you compare your options
Finding the right vehicle is only part of the purchasing process. Finding finance that suits your circumstances is another important consideration.
At AAA Finance, we can help you explore available vehicle and equipment finance options and guide you through the application process.
Instead of simply accepting the first finance offer you receive, take the time to understand your options.
Ready to explore your vehicle finance options?
Talk to AAA Finance today to discuss your requirements and find out what finance options may be available to you.
Finance is subject to lender approval, terms and conditions, fees and lending criteria. Not all applicants will qualify for all products or rates. Information provided is general in nature and does not take into account your individual circumstances. See the following link for the National Consumer Credit Protection Act.
