Finance from car dealer or bank?

Hey guys so I'm starting a new job and need to buy a car before I start to commute.

In your experience which is better, getting finance through the dealer or the bank.

Loan term 12 months
Load amount $12,000

Comments

  • I assume you haven't left the old job?

  • +3

    Just a tip. Whichever you choose (I'd suggest bank) check the early termination / payout fees.

    I was with Esanda and wanted to payout the loan 3 years early and they wanted to charge nearly 2k in fees.
    If I were trading in id have had to pay it.
    Fortunately I wasn't trading in so I paid all bar the last $100 and just left it alone. Several months later Esanda called asking me to pay the final $100 (and of course the early payout fees). I told them no. I explained that it would be cheaper for me to leave it as is and pay the fortnightly account fee $2.30 than pay out. In the end they negotiated a much smaller payout and I saved $$$ and finalised the loan.

    Lesson I learnt was to check carefully all the conditions. Especially the payout early fees if you do decide to trade in or sell the car.

    With my bank (CreditUnionSA) I borrowed $60k and repaid 3 months later without any penalty.

    Good luck.

  • Assuming bank and Dealer offer the same terms, you may be able to negotiate a little harder with the dealer if you choose their Finance provider. They're probably getting a kickback from their finance provider, so they're not losing out if you pay a few hundred less.

  • Whoever offers you the lower rate I suppose. If the rates are similar I would opt for a bank.

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