When you're about to buy a car with a loan, it's a really good idea to get a few online car finance quotes first. You don't want to overpay for a car. And in the same way, you don't an expensive car loan with a high interest rate and large fees.
Comparing your options and getting a few quotes online can save you hundreds if not thousands of dollars.
Start by finding a few car loan lender that looks suitable (you can compare them in the table above).
Enter your details on the lender's site (they probably have a quote form). This includes your personal details and information about the car you're buying (or thinking about buying if you're still just researching).
Once you're done, the lender will provide you with either a single quote, or a few options. Pay close attention to the interest rate and the loan fees.
Repeat steps 1 to 3 with a few more lenders so you can compare multiple car loan quotes.
Run your car loan quote through a calculator
If you've received a quote for a car loan, plug the rate and fee details along the with loan amount into a car loan calculator. This way you can see what it will cost you month by month.
And you can adjust some of the details (like the loan term) to see how a change will affect your repayments.
Your loan details
Loan amount
$
Term
Repayment type
Interest rate
%
Interest only period
Payment frequency
Extra monthly repayments
$
Overview of your loan
Once the interest only period ends, your estimated repayments will be
Calculator Assumptions: The above calculations are worked out assuming you’re paying off a principal and interest loan where the interest rate remains the same over the life of the loan. The repayment amounts do not take into account any additional fees or charges that may be charged to your loan (e.g. application fees).
Disclaimer: Whilst every effort has been made to ensure the accuracy of this calculator, the results should be used as indication only. They are neither a quote nor a pre-qualification for a loan.
Look at the interest rate. For any loan, the lower the rate the cheaper the loan will usually be (unless it has very high fees). Borrowers with Good or Excellent credit scores get the lowest rates.
Factor in the cost of fees. Application and monthly fees increase the cost of your loan. Be sure to factor in the cost of fees on top of the interest rate.
Think about the loan term. A shorter loan term means you pay less interest because you get out of debt faster. But a longer loan term means smaller repayments each month. Try different loan terms when getting online quotes to see how it changes your loan.
There are other factors to look at too, but these can be harder to compare. Some loans let you make extra repayments, which means you can pay the loan off faster. Fixed rate loans mean your interest rate never changes, while variable rates fluctuate.
You should also be aware of loans with balloon payments: your monthly repayments might be smaller but you'll have to pay a sizeable lump sum at the end of the loan.
What is the comparison rate?
The comparison rate is just the loan's interest rate, adjusted to include the cost of fees. It can help you understand the true cost of loan.
Pros and cons of online car finance quotes
Pros
Convenience. You don’t have to move from one financial institution to another looking for quotes. All you have to do is provide the information required and have your quote delivered to your inbox. This is a convenient and less stressful way of getting quotes.
Easy budgeting. Online car finance quotes are beneficial even when you are just thinking of buying a car. They help you to start preparing early since you get an idea of what you would be required to pay for the loan on a monthly basis and in the long run.
Better decision making. By comparing quotes, you are able to make an informed decision on the most suitable car loan provider.
Cons
Poor decision making. There are far too many lenders online and the abundance of quotes may lead you to make a poor decision on a lender. It helps to work with recognised lenders you can trust.
What should I consider while requesting an online quote?
False information. When requesting an online car finance quote, the information you provide must be factual. Providing false information may lead to a lender disqualifying your application.
Overpricing / underpricing. Do not overprice or underprice the cost of the car you intend to buy. Remember that the value you provide will contribute to the quote that you will be given, and you need a quote that you can actually use.
Settling. Do not settle for the first quote you come across. The whole point is to compare what different lenders have to offer to get the best deal.
How to obtain an online car finance quote
The information required when filling out an online car finance quote includes:
The details of the car you wish to buy, such as the make, model, year, condition and where you are buying it.
Your financial details. In this section you will list the loan amount and term that you require, as well as indicate whether you have any assets and liabilities.
Your personal details. You will need to include your full name, address and contact details.
Once you are done filling in these details, simply submit your quote and wait for a response.
Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification.
Want to buy a classic car but don't have the ready money? There are still financing options available for classic vehicles. Find out what loans you have to choose one and which one will work best for you.
Have bad credit but still need a car? There are a range of lenders that will consider you for a loan. Find out how to apply and how you can get approved in this guide.
Finding the right car loan shouldn't be as hard as finding the right car. Get a loan that will give you pre-approval so you can go shopping with the right amount of funds.
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