Want a Nissan and unsure how to afford it? Learn about your finance options here.
Nissan is a staple brand in Australia having been manufacturing car parts here since 1982. With cars such as the Nissan JUKE and the standard Nissan Navara ute to choose from, there are vehicles to suit a range of needs. However, before you get too excited about purchasing a Nissan, you need to think about how you’re going to pay for it.
What types of finance options are there for your Nissan?
There are a range of finance options to choose from:
- Car loan. This is where you borrow money from a lender to buy the vehicle you want. These are secured loans, which means that the lender takes security over the vehicle to protect the loan. Because the loan is secured you can find rates of between 5% and 10% p.a.
- Personal loan. A personal loan works the same way as a car loan except the way you use the funds is more flexible. The loan can be unsecured, which means you don’t need to provide an asset as security, or secured, where you need to provide an asset, such as the vehicle you’re buying, as security. Unsecured rates range between 8% and 16% p.a. and secured loan rates range from 5% to 10% p.a.
- 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.
- Novated lease. This is a method of salary packaging a car. As an employee you can lease a car and your employer pays the lease repayments from your pre-tax income. This can be a tax-effective way to purchase a vehicle.
- Finance through Nissan. Dealership finance is available through Nissan, which is an option to consider if you want everything done in one transaction. Remember to look beyond the interest rate offered and check the fees and charges attached to Nissan finance. Check for other requirements, such as balloon payments, that make the repayments seem more competitive than they are.
Car loans suitable for financing a Nissan
What should you consider before financing a Nissan?
Being aware that the asset that you are purchasing will decrease in value as soon as you drive your new car off the lot is a good place to start. If your financing a new Nissan purchase it’s important to understand that the finance you’re taking out will be more than your vehicle’s worth when you drive off the lot.
Another thing to consider when looking for finance is whether there is a minimum or maximum limit to the loan that you’re applying for. Some lenders have minimum amounts you can apply for whereas others let you borrow as little or as much as you want, as long as you show you can pay it back. Depending on the cost of your Nissan, this may affect which finance choices you have.
Things to look at in your finance
There are a number of details to check in your finance before you zoom away in your Nissan:
- Can I afford the repayments? Knowing your financial situation and if 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 inferior credit or am I bankrupt? Some lenders don’t let you apply for their loans if you have inferior credit or have declared bankruptcy. However, there are other lenders available that are willing to help you out.
- Is there a balloon payment? Finance offered by dealerships often come with balloon payments. These are amounts deducted from your principal borrowing amount which you’re required to pay at the end of the loan term. Balloon payments can decrease your ongoing repayments, but coming up with the balloon payment at the end of the term can be difficult. It is usually upwards of $5,000.
What should you do before you finance a Nissan?
Before you finance your dream car, there are some things to consider:
- What is my budget? Nissan has an entire range of vehicles to choose from, which also means a range of prices. Prices can start from $26,000 for smaller cars and go as high as $96,000 for luxury SUVs. The prices you see on the website are a base amount and don’t include costs for additional features you might want to add as well as GST and luxury car tax.
- What kind of car do I want? Nissan has many models to choose from, which can be intimidating. You can choose from small cars such as the eye-catching Nissan JUKE to zip around the city in, the classic Nissan Navara ute in a range of cab sizes, and the sporty 370Z Roadster, which will have everyone turning their heads when you zoom on by. Knowing what car suits your lifestyle is the best place to start.
- What kind of features do I want? Nissan has a range of features available in their vehicles that vary depending on the model you choose. For example, the Nissan Qashqai comes with a panoramic glass roof and intelligent parking assistance as well as leather seats. The JUKE comes with a leather-accented seat trim and a touchscreen colour display. Although these differing features can be confusing, figuring out what you’re flexible on and what you’re not can help you decide.
Costs to consider
Some costs for you to think about before applying for a loan include:
- Loan fees. Once you consider the application fee that is charged to apply for a loan as well as monthly fees and transaction fees, they can really add up. Ensure you are aware of all the fees that might be charged before applying for a loan.
- Upkeep of the car. Paying for fuel, servicing, new tyres and running your car can be expensive. There is also car washing to consider – you’ll want everyone to see how nice and clean your new car is! RACV’s 2017 vehicle operating costs estimate for a medium-sized vehicle is for between $176.75 to $302.43.
- 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 need to consider what insurance you need outside of the compulsory insurances, such as third-party property cover.
What you will need to apply for a loan
You will need the following to apply for a car loan:
- Financial statements. Financial statements can be three months or more of payslips, your latest bank statements that show income coming into your nominated accounts, or your latest tax return. What will be required varies from lender to lender.
- Identification. This differs between providers but you will generally need your Australian driver’s licence, Medicare card, birth certificate and/or passport.
- A stable income. Most lenders won’t let you borrow money from them if you cannot show that you have a stable income. However, some lenders have more flexible income requirements. Do your research on which lender is right for you.
- Your current assets and liabilities situation. An accurate picture of all your assets and any current debts that you may have is necessary for lenders to see how much of a risk you are when it comes to lending you funds.
Figuring out if your new Nissan is right for you will be a lot easier if you are aware of your financial situation and what options are available to you. Once you have done your homework, choose your favourite and go get it!
