Buying a new vehicle is a costly experience, and most of us don’t have enough money in the bank available to make the purchase. Lucky if you can, but a simple cash purchase for a brand new vehicle seems very unlikely most of the time. Therefore, you’re going to need a loan. A traditional route for borrowing money may be to ask your bank, but many car dealers offer specific financing options to purchase new vehicles. This can often work out better for this specific purchase, as deposits, interest, and repayment amounts are lower.
What Are the Options?
For a new car, you usually have these options:
- Hire Purchase (HP)
Currently this is one of the most popular ways to finance new vehicles. The loan is secured against the car, and this means you don’t actually own the vehicle until the last payment has been made. This kind of finance is usually very convenient to arrange, and the dealers often provide very competitive offers for new cars, albeit less so for used ones.
- Personal Contract Plan
This differs from an HP agreement because it tends to result in lower monthly payments. This is a variation on the HP deal, but instead of paying for the car outright, you agree to pay the difference between its price at the point of sale, and then how much it will be for resale back to the dealer. One benefit, apart from lower monthly payments, is that at the end of the loan term you can trade the car in and start all over again with a brand new vehicle, which is good for those of us who like to upgrade our vehicles every few years.
- Personal Leasing
Technically, you will never own the car using this method, but it is favourable to many, who want a low-hassle option of having new cars. With this arrangement you must pay the dealer a fixed monthly amount to use of a car. Servicing and maintenance included too, during the length of your lease period. At the end of the agreement, you hand the car back and it has never belonged to you.
Where is my nearest dealer?
Auckland has more than 100 car dealers, and many of them are ready to provide you a car loan. First, you’ll need to search for your nearest car dealer, e.g. “car dealer in Manukau”, and then you will find a list of dealers close to your suburb. Take a look through their website and see what kind of loans they have on offer, and check all the details. After that, you can give them a call or email with any further questions. Then you can go to the showroom and see what cars they have on offer, and see if any takes your pick. Finally, you’ll need to discuss all the details on your finance option for your chosen car.
Make the Right Decision
You don’t always need to go to the bank to ask for a loan to buy a new car. Many car dealers will offer their own financing options – e.g. Hire Purchase or Personal Contract Plans. You can find dealers offering this service in Auckland by searching for your nearest one. After that you can go and take a look at their vehicles, before deciding if you want to discuss terms of the loan. However, car dealer finance is often a better value choice of loan for making a vehicle purchase.