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$40,000 goes a long way when buying a new or used car. It'll get you into pretty much any type of daily driver vehicle you'd like, from a mid-tier 4WD ute like the Mitsubishi Triton GLX+ ($38,990) right up to the highly specced Mazda3 G25 GT (with an optional Vision Technology pack costing $1,500) for $39,188.
Using this guide, you'll see what's available for the money and learn all about car loans. You can also quickly compare available loans and kickstart the application process.
Finding car loans confusing? Don't worry, we're here to help. The TL;DR version of getting a good loan is to look for an offer with a:
Low interest rate car loan (so you pay the minimum possible amount to the lender over the course of the loan term)
Secured or unsecured – Opting for a secured car loan sees your car held as collateral on the loan, but can bring a lower interest rate. Unsecured loans don't have the same requirements for security, but they tend to have higher interest rates.
Low fees – Make sure you check whether there's an application or early repayment fee on your loans. Obviously, the lower those charges, the less you'll spend.
Need help understanding car loans?
Are you confused about interest rates, secured versus non-secured loans, fees, balloon payments and other financial lingo?
Don't worry, we've produced an easy-to-understand, concise car loan guide. The guide will help you get to grips with the jargon, show you how to apply for a car loan and teach you the major differences between all the different types of financial products out there. There are even more tips on how to reduce the monthly cost of a car loan.
How can I stretch my budget further?
So you're looking at cars around the $40k mark; how can you make your money go as far as possible?
Look out for offers and promotions
Car dealers are almost always running some kind of sale, it isn't just an EOFY thing. Keeping an eye on their websites could result in you spotting a really sweet deal. In some cases, they could knock thousands off the driveaway price in order to move the car, so be ready and waiting for the offers. Sometimes, the promotions include longer warranties, free/cut-price servicing, extras or packs for no cost and other goodies.
Be open to a lesser-known brand, or lower spec
Image seems to be really important to some people and aligning yourself with a prestigious brand is the way to go. But if you're not that bothered about having the best "badge" on your car and are open to buying a rival vehicle, you could cash in on a lower driveaway price and sometimes a better spec than the most prominent car in the segment.
If you really must have the car from brand "X", consider lowering your expectations for equipment. Dropping down just one trim grade might lose you a handful of conveniences, but it could shave $2000 from the price. Work out what the minimum level of tech and accessories you'll accept is and then work from there.
Go for a manual transmission
Manual transmission cars aren't just for motoring purists, they are for those who like to save money on a car purchase. How much could you hang on to in your wallet? Typically a manual cog-swapper may be up to $1,000 less expensive than the equivalent car with an auto.
Free paint options
Metallic, mica and pearlescent paints are extras that bump up car purchase prices. Almost all carmakers offer a couple of no-cost colours; if you stick to that limited palette, you could save up to $1,000 to boost you up to a higher trim level.
Skip the options
Ticking all the option boxes might be tempting, imagining yourself driving along in a protected bubble of pure bliss, but they quickly bloat the price of your car. You do tend to pay a premium for factory-fitted extras, so if you're willing to source and organise fitting of must-have options through the established aftermarket, you can save a packet.
Run-out models
If you're super serious about saving money and making your $40,000 go as far as possible, take a look at run-out models. These cars are usually less in demand because they've been sat on a forecourt or in a dealership gathering dust. Sometimes, they've been kicking around so long that they may no longer be current. Perhaps a recent facelift of the car model has resulted in buyers looking over the older vehicle in favour of the latest gen.
Car manufacturers recognise this and heavily discount these "run-out" models. Most car brands have a page on their site listing them, while others manage it on a dealership level. These may require a little more effort to locate.
Haggle
There's almost always some leeway in a car's sticker price. Dealers are under pressure to make sales and meet targets, plus they get incentives for selling a car. So take advantage of this. Once you've found the car you want, offer them a fair but lower figure and see if they bite. Unless it's a vehicle in high demand, you're in the strongest position. The least they can say is no. Spending a bit of time to hammer out a deal could knock hundreds of dollars off the list price or bag you some normally paid options for free.
Pre-approval
If you already know what car you're after, you can apply for a pre-approval car loan. This way, you've got some confirmation you can get the money and be in a strong position to negotiate on the price. If a salesperson is aware you're keen on buying the car there and then, they'll probably pull out all the stops to get you to sign the sales sheet and give you the keys.
Go for a smaller car
Being willing to go down a car size will benefit you in stretching your finances. There can be a substantial list price difference between a medium and small size car, or a single-cab and double-cab ute (even between 4x4 and 4x2 variants). There are other benefits too, like a lower kerb weight and possible improved fuel economy.
Consider used
New cars suffer from depreciation, but the older a vehicle gets, the slower it decreases in value. If you're not dead set on getting a new car, buying a used one could save you a heap. Let someone else deal with pushy salespeople and pay the depreciation. If you know what you're doing, buying a used car is a very sensible proposition, especially when being money-wise.
Be wary of in-house finance
Dealers are encouraged to steer buyers towards their in-house financing options, which are attractive because they seem like they'll require less effort on your part to organise. But the rates on the loans tend not to be as competitive as arranging your own car loan. Or, in order to market a tempting loan rate, they might ask for a chunk up-front as down payment and then a balloon payment at the end of the agreement. That leaves you having to find thousands of dollars to meet those terms.
Compare $40,000 car loans and save
Using our simple comparison tools here at Finder, you can quickly sift through the various car loans on offer, understanding the associated fees and picking a car loan lender that could save you hundreds of dollars over the loan.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
You can apply online. Use our above comparison table, click the link to the loan provider's site and follow their instructions. You'll need the following:
ID – commonly a passport or driver's licence.
Income and financial statements – Three recent payslips or two years of self-employed tax returns as proof of income. You'll also need to show current outgoings and details of other loans or credit.
Vehicle details – If you've already found a car, you'll be asked for more information about it.
What happens after I submit my application?
Our general car loans guide explains what happens behind the scenes after you've started the car loan application process.
Compare car insurance providers side-by-side and get quotes
Ben Gribbin is an automotive writer at Finder. He is a life-long car enthusiast, bringing many years of experience working with and writing about cars. During his time, Ben has been a freelance writer, editor and reviewer for a number of leading publications across the UK. He was voted the Guild of Motoring Writers Breakthrough Blogger in 2015.
Find out more about how you can be a driver with DiDi, even if you don't own your own car. Rent a car and start making money using the ridesharing platform.
Australian Military Bank lets you finance a car, motorbike or boat up to five years old with its competitive car loan. Find out about the rates and fees in this review.
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