Benefit from a $30,000 car loan and drive away in the car of your dreams.
If you’re on the hunt for a new set of wheels over $30,000 and are looking to finance your new purchase, there are a range of loan options you can consider. In fact, a recent finder.com.au analysis of Australian Bureau of Statistics (ABS) data found that 1 in 5 cars in Australia are financed through a car loan and the average financed car sold for $35,797.
Whether you’re looking for a new or used car you will likely find a few options. This guide will show you what’s available.
Can you afford a loan for a $30,000 car?
While it’s becoming more common for people to purchase cars in the $30,000 and above range, it’s still important to consider whether this is a price you can afford. Depending on the type of finance you choose, you will need to consider not only the cost of the car but also the interest rate and fees you’ll need to repay.
Factor this in with the running costs of the car to see if it will be affordable on your budget. This includes the cost of fuel, parking, insurance, registration as well as the cost of servicing. It adds up to own a vehicle.
$30,000 car loan comparison
What $30,000 car loan types are available?
There are various loan types available, which include:
- Secured car loan. This car loan uses the vehicle you want to buy as security for the loan. You benefit from a lower rate as there is less risk to the lender. Rates for these loans start from around 5% p.a.. and can go up to 13% p.a.
- A car lease (or a novated lease). This is where you’re able to rent the vehicle for a set fee and use it as if it were your own vehicle. However, you don’t own the car as the financier retains ownership. You pay a monthly lease fee in order to use the vehicle. Once your loan term is up, you can either pay to take ownership of the car or continue the lease.
- A chattel mortgage. This is where you receive advance funds from your lender in order to purchase a vehicle. You take ownership of this vehicle at the time of purchase. Since the lender is advancing the funds, they then take a “mortgage” over the vehicle as security. You pay a monthly installment until the contract is over, at which point you will own the vehicle outright.
- Dealership finance. Finance for your car can be obtained through dealership finance. This usually comes with low interest rates or no interest at all. This means that you are able to benefit from lower repayments, but you may be required to pay a balloon payment at the end of the loan term which can be upwards of a couple of thousand dollars.
New vs used
There are many benefits of buying new and used cars. With a new car, you have the peace of mind that comes with owning a vehicle that is in topnotch condition with the latest features. Another pro is that every year, cars markers aim to improve fuel efficiency of their vehicles which ensures that you pay less when you have to fill up. However, a new car depreciates in value up to 40% in the first three years of owning the vehicle.
The pros of buying a used car include a lower price, which can be a good deal provided it’s a regularly-maintained vehicle. Cons of buying a used car are that you might miss out on newer features that you want for your car as well as the risks that can occur when going through a private sale, such as an unregulated market, and not getting what you pay for. However, some of these risks can be avoided if you buy from a registered motor dealership.
What features should you look out for in a $30,000 car loan?
Some features that you should look for in a $30,000 car loan include:
- The interest rate. Whether or not the rate is fixed or variable will help you out a great deal. If you choose a fixed rate car loan, you’ll have the certainty of knowing what your repayments will be each time. With a variable rate loan, you have the option of making extra repayments without charge and redrawing on those payments whenever you need access to the funds.
- Secured or unsecured. If a lender is asking for a secured loan, this means that they are able to take the vehicle from you if you’re unable to meet your repayments. If a lender is asking for an unsecured loan, you don’t have to provide an asset as security. However, you’ll be charged a higher interest rate as there is more risk to the lender.
- Fees. The kind of fees that are associated with the loan is another thing to consider when looking for loans. The possibility of a high application fee, whether or not there is a monthly fee charged, and if there are high late fees – these are all things to look into before choosing a lender.
- Balloon payments. Whether or not a lender offers the option to make balloon payments is something to consider as well. A balloon payment is required at the end of the loan and can be upwards of thousands of dollars depending on how much is left on the amount owed.
- Repayment flexibility. Being able to benefit from the option of weekly, fortnightly or monthly repayments is something to consider for your loan. If you’re able to tailor your repayments to your cash flow, this is something that should be investigated when looking around for a loan.
- Do you own the vehicle? Whether or not you own the vehicle is something to consider as well. Owning the vehicle outright is beneficial as it’s yours and it won’t be taken away. Sometimes you don’t own the vehicle until you’ve fulfilled your loan obligations.
Frequently asked questions
Can I finance an older car with a loan?
This depends on the lender. Some lender have no limit as to the age of the car whereas others will only accept the car if it’s less than seven years old.
Should I get a secured or unsecured loan?
That’s up to you. If you don’t have an asset to put forward in order to be used as security for the loan, an unsecured car loan is better for you. However, if you do have an asset to be used as security, a secured loan is better as you can benefit from a lower rate.
What do I need to make available in order to apply for a $30,000 car loan?
You need three recent payslips, an Australian driver’s licence and an accurate assets and liabilities assessment to prove you are able to pay off a $30,000 car loan in the required time frame.