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What is a Car Loan?
A car loan is used for buying a vehicle, including cars, motorbikes, 4WD, or any other road vehicle. It is a type of personal loan that can help you purchase the vehicle of your choice when you do not have enough savings to cover the upfront price. A car loan allows you to repay in instalments, which is more affordable than having to pay the upfront cost of the vehicle.
Types of Car Loans
There is more than one type of car loan, and knowing your options helps you choose the car loan that is right for you.
New Car Loan
This type of car loan is used for purchasing cars that are brand new. Depending on the lender, they may allow you to use a new car loan for a car that is one to three years old. Generally, a higher value car often results in a lower interest rate because the car loan can be paid off by the car itself in the event of a default.
Used Car Loan
This type of car loan is used for purchasing cars that are five to six years old, or cars that do not qualify for a new car loan. Generally, a used car loan is secured by the value of the car.
Unsecured Car Loan
If a car is older than five or six years and does not qualify for a used car loan, you may apply for an unsecured car loan. This type of car loan normally has a higher interest rate than new or used car loans.
Advantages and Disadvantages of a Car Loan
Vehicle Connect wants you to be able to make an informed decision when considering a car loan. Before making a decision that is best for your circumstances, here are some advantages and disadvantages of car loans that you may want to think about:
Advantages of a Car Loan
- It is possible for you to borrow an unlimited amount for your car, but that may involve multiple lenders.
- You can repay your loan for up to 5 or 10 years, depending on your lender.
- The interest rate of an average car loan is generally lower than the average rates for credit cards and personal loans.
- You can budget your monthly repayment if you choose a fixed rate loan.
Disadvantages of a Car Loan
- You cannot request to increase the amount of your loan; meaning that you need to make sure that you can afford all the running and maintenance costs of the car before agreeing to a loan agreement.
- You need to make sure that you can make each and every one of your monthly repayments, as failing to do so will result in a penalty or even repossession of the car by the lender.
How Vehicle Connect Ensures Quality Car Loan Comparison
Vehicle Connect uses a unique and highly developed rating methodology when comparing car loans. The ratings are made while considering both a brand’s pricing and features.
Here are some of the features that Vehicle Connect compares for car loans:
- Lending terms
- Loan insurance
- Security and deposit requirements
- Repayment options
- Switching facilities
- Applications process
You can easily compare car loan products yourself based on your needs using our car loan comparison tool.
Types of Car Loans Available at Vehicle Connect
We can connect you to lenders with the best rates here are Vehicle Connect. Here are some types of car loans that our partners offer:
Car Loans
Vehicle Connect can help you get the lowest car loan rate out there. Get your dream car and save some money in the process.
Chattel Mortgage
Are you planning to get a loan for a business vehicle? Vehicle Connect can give you expert advice on how to save on tax and many more.
Hire Purchase
Vehicle Connect has a growing network of banks and lenders—we can connect you with them to get the best car loan rate possible.
Car Lease
Vehicle Connect can create a leasing package that will suit your needs. You can have the latest models available with the help of our affordable leasing options.
Novated Leasing
Novated leasing allows you to save on tax and experience the benefits of having a company car. Vehicle Connect can make this possible for you.
Bad Credit Loans
Do you have bad credit? Vehicle Connect can still help you get approved for a car loan whilst also helping you to improve your credit rating.
