Buying a Kia? Find out how you can finance your purchase.
Kia is Australia’s fastest-growing mainstream car brand and one that offers you a barrage of vehicle options to choose from. Kia is known for its small, budget-friendly vehicles but you can also find SUVs and sportier models. This guide will take you through all of your financing options so you can make an informed decision before you purchase a Kia vehicle.
What types of finance options are there for your Kia?
There are a range of finance options to choose from when looking to finance your new car. You can choose a:
- Car loan. This is where you receive money from a lender to buy the vehicle you want. These are generally secured loans, which means that they take security over the vehicle to protect the loan. Car loans generally come with rates of between 5-10% p.a. and allow you to borrow between $1,000 and $100,000 (depending on the value of the car).
- Personal loan. These loans can be secured or unsecured. Secured personal loans come with rates comparable to car loans (5-10% p.a.) while unsecured loans come with slightly higher rates, usually between 8-16% p.a. You will find more flexibility with an unsecured loan, as you can use the funds however you choose. A secured loan is tied to the cost of the vehicle. Personal loans also give you the option of a fixed or variable rate.
- Car lease. This allows self-employed people to buy a car for business purposes. The lender purchases the car and you make lease payments until the end of the term of the lease.
- Commercial hire purchase. This is an option for businesses who hire a car from the financier for a fixed payment monthly over an agreed-upon term. You have the option to purchase the car at the end of your loan term. This is ideal if you need a van over the busy Christmas period but do not want to purchase a brand new one.
- Novated lease. This is a method of salary packaging a car. This means that you, as an employee, can lease a car and your employer pays the lease repayments from your pre-tax income. A novated lease can be a tax-effective way of purchasing a vehicle.
What should you look at in your finance?
There are a variety of things to look at in your finance before you cruise away in your Kia, such as:
- Can I afford the repayments? Knowing whether or not you can afford the repayments, whether they be monthly, fortnightly or weekly is very important before you consider getting a new car. You don’t want to drive yourself into debt.
- Do I have bad credit or am I bankrupt? If you have bad credit or have declared bankruptcy, there are lenders available that are willing to help you out and loan you the money they need for your vehicle.
Car loans suitable for financing a Kia
Rates last updated October 16th, 2018
Main points to consider before you finance a Kia
Before you finance your dream car, there are some things to consider, which include:
- What is my budget? It’s important to know how much you can spend before picking your ideal car. Kia vehicles can range from around $14,000 for the smaller Kia Picanto to up to $40,000+ for the Carnival and Sorento. You can use a car loan repayment calculator to see how much your repayments will be for your chosen finance options.
- What kind of car do I want? Kia have a huge range of cars to choose from. The car that will be right for you will come down to what you need the car for – family, regular transport, off-road? – and your budget. Kia offers small cars such as the Kia Picanto, SUVs such as the Sportage and passenger vehicles such as the Optima.
- What kind of features do I want? Kia vehicles come with a range of features including connectivity for Apple and Android devices, reverse parking sensors and rear view camera, autonomous braking and touchscreens. If you’re looking for something specific, make sure the vehicle has it!
Costs to consider
Some costs for you to consider before applying for a loan are:
- The finance fees. Check for upfront fees such as application or establishment fees and ongoing fees such as monthly or annual fees. You should also check if you will be charged fees for repaying your loan early or making extra repayments.
- Upkeep of the car. Paying for fuel, servicing, new tyres and running your car can be expensive. Kia brags about being home to the seven-year unlimited kilometre warranty, so this is something to take advantage of if you’re worried about future servicing costs.
- Registration and insurance. Now that you’re on the road, you have to pay to be on the road. This is the cost of registration, and insurance to protect yourself and others in case of road-related mishap.
What you will need to apply for a loan
You will need the following to apply for a car loan:
- Financial statements. This can include three months worth of payslips, your last tax return statement or an accurate assessment of your current assets and liabilities situation.
- Identification. This can be shown through your driver’s licence, your Medicare card, your birth certificate or your passport.
- A stable income. Most lenders won’t let you borrow money from them without evidence that you have a stable income.
- Assets and debts. You will need documents to show your current assets as well as your current debts.
Now that you know everything you need to get a brand new Kia, choose your favourite. Make sure you have the funds to pay for it, and if you don’t, look into which financing option will work best for you.
Enjoy the drive in your new car!
Picture: Shutterstock
