Ford Financing options: What you need to know before driving away
Having been in Australia since 1925, Ford has become an Australian car icon. With such strong Aussie roots, it’s a popular choice for families, individuals and people running their own businesses. Ford has a range of small cars, sedans, SUVs and commercial vehicles to choose from. However, before you get too excited about buying a Ford, ensure your finances are in order.
What types of finance options are there for your Ford?
There are many finance options to choose from, including:
- Car loan. If you’re buying a new Ford or even a used Ford model under a certain age, the vehicle may be eligible to be financed by a car loan. The car will be used as security and you’ll be funded however much the vehicle costs to purchase. Rates are fixed or variable and are competitive, usually 5-10% p.a.
- Personal loan. This loan option can be unsecured, which means that the lender doesn’t take any security over the vehicle you wish to buy. However, this means that the rate can be higher as there’s more risk for the lender. A personal loan can also be secured which will lower the rate. Rates start from 8-16% p.a. for unsecured personal loans and 5-10% p.a. for a secured personal loan
- Commercial hire purchase. This is an option for businesses who hire a car from the financier for a fixed payment monthly over a term that is agreed to. You have the option of purchasing the car at the end of your loan term. You can choose from a range of commercial vehicles through Ford, which include the Ford Ranger or the Ford Transit and you have the option of customising the Ford Transit.
- Novated lease. If you want to take advantage of tax benefits when financing your vehicle but the car is for personal use, you can consider a novated lease. It’s an arrangement between you, your employer and a financier and allows you to pay for the vehicle out of your pre-tax income.
- Ford Finance. Ford offers financing that can be done on the spot through the company. This is an option available at the dealership or through its website. You can use a personal loan that offers balloon payments or a business loan that offers a variety of options within it.
Loans you can use to finance a Ford
What should you consider when choosing finance?
There are several factors to take into account when seeing what finance is available to you:
- Can I afford the repayments? Using a car loan repayment calculator can help you work out how much the repayments will be for each finance option and whether you can afford it. Remember, with finance that requires a balloon payment, calculate how much you need to save each month to pay that off at the end of the term.
- Do you want to own the vehicle? Not all financing options let you own the car from the outset. These options give you other benefits but it’s important to consider when picking the loan that’s right for you.
- How long do you want to keep the Ford? If you like new cars and usually get one every few years, some of the lease options give you the option of a new car at the end of the loan term. This may be an alternative to consider rather than purchasing a new car outright at the end of each term.
What should you ask yourself before you finance a Ford?
Before you finance your dream car, there are some things to consider, which include:
- What’s my budget? Setting yourself a budget can stop you from exceeding it at the dealership. The Ford Focus starts from a low $22,150 whereas, if you want the Ford Escape, it can cost you from $28,000 to $48,000. This all depends on the features you want, but knowing what you can afford as a baseline can help you narrow down your new car search later.
- What kind of car do I want? You can choose from small cars such as the Ford Fiesta, or sedans and SUVs like the Escape. Ford also offers a range of commercial vehicles such as the Transit which can be customised to suit your business needs. Ensure you choose a car that suits your current lifestyle and not the lifestyle you wish you had. If you know you’re going to be in the city, maybe a smaller car is ideal for you, even though your heart is calling for you to get an SUV.
- What kind of features do I want? Ford prides itself on its SYNC connectivity technology which is standard across many models. This feature allows drivers to stay connected to their digital lives without compromising their driving. There’s also the rear-view camera, reverse parking camera and option for a sports option depending on what model you’re choosing. Decide what features you want before getting blindsided by all the options.
What are the extra costs?
Some additional costs for you to consider before applying for a loan are:
- Loan fees. You need to consider upfront fees such as application and establishment fees as well as ongoing fees that can include monthly or annual fees. Looking at the comparison rate can give you an idea of these fees plus the interest rate.
- Upkeep of the car. Paying for fuel, servicing, new tyres and running your car can be expensive. There’s also the cost of car washing to be considered. If you do it yourself, you must buy supplies. If you go to a car wash, it can cost you upwards of $20 a pop. Factoring these costs into your monthly cash flow is a clever idea, to figure out whether you can afford the upkeep of a car before purchasing one.
- Registration and insurance. Now that you’re on the road, you must pay to be on the road. This is the cost of registration. You’ll also want to look at insurance, as other cars might hit your new car or you might hit them. Insurance will reduce an out-of-pocket cost later.
What you will need to apply for a loan
You’ll need the following to apply for a car loan:
- Financial statements. You must be able to show your income, which may require your payslips or bank statements, or if you’re self-employed you’ll need your tax returns. You’ll also have to detail your assets and debts.
- Identification. Requirements differ between lenders but you may need your driver’s licence, passport or Medicare card.
- Assets and liabilities. You must show your current assets and liabilities situation to your lender before getting approved for a loan.
Now that you know everything you need to get a brand new Ford, choose your favourite. Our favourite is the Ford Focus – what a classic. Make sure you choose the best financing option for your circumstances before deciding to get on the road in your new car.