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Subaru Financing Options
Discover your finance options when looking to buy a Subaru and get on the road quicker than you think.
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Whether you’ve had your eye on the latest version of the Subaru Forester or want to zoom around the city in an Impreza, one thing’s for certain: You’ve been bitten by the Subaru bug. At the time of writing the Impreza starts from a cool $24,990 and the Forester can go for as high as $34,646, so finding the right finance to get these vehicles is important.
This guide will take you through your financing options for the Subaru you want.
How can you finance a Subaru?
Some of the finance options available to you include the following:
- Secured car loan. If you're buying a new Subaru or one that is only a few years old you can consider using it as security for a secured car loan. These loans come with rates of around 5-8% p.a. and you're generally able to borrow up to $80,000.
- Unsecured personal loan. If you're purchasing a used Subaru or don't want to use it to secure your loan you can consider an unsecured personal loan. This is also an option if you want to borrow extra funds to spend on registration or insurance. Interest rates vary from lender to lender and fluctuate between 8 and 17% p.a.
- Dealership finance. Subaru offers a variety of finance options to get you into the car of your dreams. There are business and consumer car loans that have loan terms ranging from 12 months to 84 months. You can get fixed repayments, which means you have the certainty of knowing what your payments will be each month. There is also a balloon payment that you will need to pay at the end of the loan term.
- Novated lease. This is where you, your employer and a financial institution come together to let you get a car and have your pre-tax dollars take care of the payments. This leaves you with a higher disposable income and a tax break as a result.
- Chattel mortgage. This finance option is ideal for those who use their vehicle primarily for business. As the car is being used for business, you have the potential to claim tax deductions come tax time. The lender takes a mortgage over the vehicle upon purchasing, but you take ownership of the vehicle. Once the mortgage is up, you’ll have a clear title to the vehicle.
Loan options to finance a Subaru
How much will a Subaru cost to finance?
How much the loan will cost depends on what car you’ve decided to go with. If you’ve gone with the Subaru Outback, this will set you back around $40,000. This is without factoring in other costs, such as fuel, insurance, registration and servicing.
Once you’ve considered the upfront and running costs of the car, an easy way to work out the loan costs is by using a car loan repayment calculator. Simply input the loan amount, interest rate and fees to see how much you’ll pay each month. Remember that if a balloon repayment applies to your financing arrangement, you will need to save this up over the course of your loan term, so you will need to factor this in.
How do you decide how to finance your Subaru?
Some of the features that will help you decide between lenders include the following:
- The interest rate. In order to figure out the true cost of your loan, look at the comparison rates while shopping around for loans. This is because it incorporates the fees and interest rate and will help you decide which loan is for you.
- Upfront and ongoing fees. Keep an eye out for monthly fees, application fees and steep dishonour fees to ensure that there are no more additional costs to your loan. They can cost you more than you think!
- Repayment flexibility. Lenders usually have the option of tailoring your repayments to weekly, fortnightly or monthly payments. If you’re able to make early repayments without penalty, ensure you are also able to redraw on these when you need them.
- Balloon repayments. This is the amount that’s deducted from your principal amount and requires you to pay it back once your loan term has ended. This can lower your repayments, but the balloon payment can be upwards of $5,000 and is a large payment to make. Dealership financiers often make their money by people refinancing balloon payments into another loan.
Frequently asked questions about financing a Subaru
Should I get a new or used Subaru?
This is a personal choice. New cars can come with great perks but are obviously more expensive and lose their value quickly. If you opt for a used car, there is a risk of it being damaged or faulty, but you will likely get more bang for your buck. Do some research into new and used models and find one to suit your needs.
Are balloon repayments offered on every loan?
No, they’re not. Typically, balloon payments only come with dealership finance loans. Check the loan features for more information on what is required when researching your loans.
How do I know what loan type is right for me?
It can be tricky figuring out which loan type is right for you. Luckily, we've got a car loan comparison guide to help you out with that.
Picture: Shutterstock
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