You have two choices when you buy a car. There are two options: either you can pay cash up front, or you can finance it using a loan. Car finance is something that you might have shied away from in past. However, there are several benefits to choosing this option.
Let’s take a look at some of these benefits when you finance a car purchase.
1. You Can Get 100% Of The Car’s Price As A Loan
It doesn’t matter if you are in urgent need of a car. Your new car can be driven away in the time it takes to get your paperwork and vehicle prepared by the dealer. Car financing is an option if you can afford the monthly payment.
2. Tax-Deductible Car Financing
If your business borrows money for a car, the financing costs may be tax-deductible. Your accountant can help you determine if the interest on your car loan, insurance premiums, and servicing costs are eligible.
3. Spend Your Cash On More Important Things
It’s not always a good idea to spend a large sum upfront on a vehicle, especially if you have a family or a business. Cash may be required for unexpected expenses like medical bills or business expenses.
4. Helps You Establish Credit
If you make your car loan payments on time, you can establish a credit history and build your credit score. This is very important for the future if you need financing for other purposes like a loan or mortgage.
Overview Of The Car Finance Options
You have several options if you are convinced that car finance Brisbane is what you want. Let’s take a look at each one to help you choose which one suits you best.
Personal Loan
You can borrow a lump amount and then pay regular instalments, including interest, over time to repay it. This usually takes up to five years. Can be secured and unsecured. Higher interest rates are available for personal loans that aren’t secured. It usually takes one to seven years for the loan to be repaid.
Car Loan
Similar to personal loans except that the car purchased serves as security for the loan. You could lose your car if your loan payments are not made on time. Because it is a secured loan, the interest rates may be lower.
Credit Card
If you can save some money, you might be able to pay the remaining balance on a credit card with a low-interest rate. You can get credit cards from lenders with a 0% purchase price for as long as 27 months.
Finance Lease
The car is rented for an agreed term. You pay a fixed rental fee and interest rate as well as regular maintenance. Some leases allow you to purchase the car after the lease ends.
Hire Purchase
A deposit is required and monthly rent payment is agreed upon. After the vehicle is used by the business for a set period, the ownership of the vehicle is transferred to you.
