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Financing your car? Tips for your car finance & deposits

myPPSR Team|02/10/2017

When you’re in the market to buy a new or used car, it’s best to get your finance sorted beforehand to ensure you’re looking at the vehicle in your price range and you aren’t jumping in too deep when it comes to financing.

Arranging your finance before buying your car is simple and will give you a little room for negotiation, which could mean you could get more value for money and possibly a few extra thrown in for good measure.

When you are looking to arrange finance for your vehicle, here are a few things to be aware of:

  • Never sign a contract that has been listed ‘subject to finance’ otherwise your dealer might seek out a loan for you, and you might not get the conditions you’re looking for
  • Seek out car finance options that suit your needs – there are a wide range of finance options available, some with huge interest rates – so find your own finance rather than getting it through your dealer
  • Do your research and ensure you’re getting a good deal
  • Read your documentation for your finance to ensure you understand the terms and conditions of the loan thoroughly
  • Ensure there are no penalties if you pay out your loan sooner than expected
Do I need to pay a deposit for a car that is financed?

There is a range of reasons why dealers might ask for a deposit for the car you are looking to purchase through finance. These reasons may include the fact that you don’t have a credit history, you have negative equity on your current car, or you have a bad credit history.

If you are interested in a vehicle and need a deposit to purchase the car through finance be sure to ensure you take the car for a test drive and get a safety inspection before you put down your money for the deposit. Some dealers have clauses that state the deposit is non-refundable so ensure everything is above board before you proceed.

Ideally, put down the lowest possible deposit possible for the car, this will ensure if you change your mind you won’t have issues getting your deposit back or if your finance ends up being rejected you don’t have a pile of money tied up with a dealer.

It's important to go with your instinct when it comes to deposits for car finance and financing your car in general. Be sure to always ask plenty of questions and take the time to read all of the terms and conditions of your loan to ensure you are happy with the finance arrangement.

By shopping around you could save a lot of money on your car loan, so focus on doing your homework and getting the best finance for your needs and budget.