Are you paying too much for car finance?
If you purchased your vehicle from a dealer and signed up for dealer finance, you may be paying more than necessary for your car, ute, van or truck. Dealers will sign you up for finance that gets you to sign up for the deal. They don’t start trying to find all the other ways you could fund your vehicle and save money. Their main driver is getting you to buy the car and agree to the finance package.
It doesn’t have to be that way. You can usually save money on asset finance, whether you own just a single car, or a fleet of cars for your business, a truck and trailer or a handful of diggers. We look at your home loan, your interest rates, your business borrowing and your assets. How can we structure your loans to get you a better rate? By analysing your personal situation, we can try to find a way to do one or more of the following:
- Save you money on your car finance
- Help you pay off debt more quickly
- Free up money to grow your business fleet more quickly
Vehicle finance may have an interest rate of roughly between 10% and 28% per annum. Plus they often charge an establishment fee and administration fees. Your rate depends on your creditworthiness and whether the loan is secured or unsecured. If you own a home, it’s possible you could pay much less by refinancing your vehicle loan using your home as security. Provided you pay back the loan at the same speed you would repay your vehicle loan, you can save a lot of money.
For example, if you owe $50,000 and you’ll pay it off over five years:
- With a 12.95% vehicle loan, you’ll pay $261 a week: $67,860 in total.
- With a 4% home loan, you’ll pay $212 a week; $55,120 in total.
Over the five years, that’s a total saving of $12,740 in interest.
For example, one of our clients owns an engineering business that buys lots of large machinery like diggers and graders. He was being charged very high interest rates on his vehicle loans and even on his mortgage. We took a look at his entire borrowing portfolio and all his assets, both personal and in his business. By restructuring his finance, we were able to reduce his monthly home loan repayments by 60% and reduce his monthly vehicle finance repayments by 35%.
But you don’t need to own a house or a fleet of heavy machinery to save money. There are also other ways to structure your lending to help you save money on dealer finance. Our team has decades of asset finance experience and we know how to look at your whole situation, so give us a call or drop us a note and we can run the numbers for you.