I am looking at buying a Mazda 3 Maxx as there is a demo model going for $24,000. I have $10,000 saved for the vehicle right now but with my new job I am saving $2000 each month. I need a short term loan of $14,000 and plan to pay this off in 8 months. I am seeking some advice whether a bank loan or dealer loan would be best, and the best rate I could expect to get? I am currently with Bank of Queensland and on their website they advertise car loans for 7.39%p.a. with a minimum loan term of 1 year.
Thanks in advance
Car Loan - Bank Vs Dealer
Lnicread on 10/07/2017 - 18:12
Comments
This is right. Bank vs dealer, doesn't matter, check interest rates and fees and conditions.
Be careful though, the dealer will try to bamboozle you with a balloon (a significant final payment whereas the bank will calculate repayment down to $0) and early repayment fees and washing in any trade-in, they will make it seem like the repayment is lower. Almost certainly the bank or credit union loan will be a better product. Unless there is a manufacturer offer of 0% or 3% finance etc - but then you need to figure out if the interest is really just baked into the purchase price, cash might get a better price.
Thanks for your advice guys, much appreciated.
A trick the bank taught me was to pay down the loan to say the last $500 and let the loan expire on its own, Any overpayment for the final payment was then refunded some months later and this way i wasnt penalised for paying it out early. If Id gone in and paid it out in a final payment then I would have been liable for the extra charges and fees that accompanied early repayment. But Ive done this twice for cars (5 year loans, paid out in 1-2 years) without a problem with the bank.
As far as deals go, if you get offered a loan and your only going to need it for a year (always take it out for the max, say 5, just inc ase things change. People get sick, loose a job and i choose the worst case for the loan length) as the difference is minimal but over the full laon period, thats where the interest rate and fee's make the difference.
Who ever you have your banking with is best bank to ask, any of the four are all worth a shot. Compare with RACQ/V/NRMA ect too. But to be honest dealer finance is always competitive and often a damn site easier to do than the bank. One trick is to say they dont have a loan fee but they bundle it into the loan. Asside from that go for it and remember to neg the car deal hard. Take your dad, bro and its their job to say NO a lot. Get floor mats, tinting, rust, body protection, headlight/bonet protection and use the fact you can get all this cheaply from 3rd party than they will over you after you buy the car and call in the after sales, sales person to upsell you stuff you can get elsewhere.
*this. Just ask upfront how much it will cost you if you borrow $14k and pay back $2k per month. It's not complicated… If they don't disclose their fees in response to this question then it will be easy to wiggle out of paying them if they try to introduce some. You want a simple $ figure that includes all interest and fees.
Don't get a loan for a depreciating asset just buy a car that you can afford
Unless there are tax efficiencies associated with the total cost of ownership.
I agree, carecales.com.au have great cars for 10k (Holden Cruise 1.4Turbo, VW POLO, used mazdas ect) ~ the second you buy the car it looses 50% as you drive ot out the dealers driveway and is no better than any listed on car sales!
But yes, get a good deal, its nice to know a cars heritage from new, or dealer runouts but barter bloddy hard!
Holden Cruise great car ? Are you sure ? Ditto VW anything.
Holden Cruise 1.4Turbo
Probably one of the worst cars you can buy, an absolute lemon.
Plus I'd never buy a second hand turbo, especially a Cruze.
With all due respect, if you cannot work out which will be the best deal then you should not proceed with any deal
He hasn't checked the dealer offer yet, he is very intelligently checking with bargain professionals and bikies for general advice before walking into the dealer and getting slammed with hard selling and 3D bamboozlement and constant hassling phone calls afterward. So you got any advice or just sass?
I vote just sass! :D
Don't get sucked in by the car on the table. Best to simply wait 8 months if you think you can save it. There will be another car, probably a better one.
Also free hint: Dealers never sell demo vehicles for less than they are willing to sell a brand new one. Even if dealer A refuses to budge, simply get dealer B to match the price.
Unfortunately my car just broke down so in urgent need of a new one. I plan on keeping this car for a while hence the desire to get new or close to new, it will be used for years to come
Get a zero pc interest balance transfer card and use the cash.. heaps of threads on ozb to check out. Just pay monthly upto 20 or so months.. just a tip.
They may even sell a new one cheaper than a demo depending on the incentives in play at the time. Often mid month seems to be the better time to negotiate as their bonus cycle seems to be mid month to mid month….so avoiding end of month rush.
Hard to say. You'll have to make the decision yourself.
Important things to consider:
- Occasionally unsecured loans can work out cheaper if you can pay them off early. Check for this.
- For small-mediun loans the setup costs and ongoing costs can negate the benefit of a more competitive rate
- Always read the contract yourself. There are many cases of dealerships and even banks making subtle undisclosed changes which would make a deal less attractive.
I paid $22500 for a demo mazda 3 SP25 recently. Car had just under 1000kms.
I don't think 24k for a maxx is a good price.
You might want to look at the prices of those cars new.This car has 32km on it. Whereabouts do you live? I'm in Brisbane and have been been on Carsales for a while and never seen a SP25 listed that cheap. Also the 24k quote was driveaway price
Bought from a dealer in Melbourne.
serious question - how old are you?
more of a question regarding the insurance cost (comprehensive) that would come with buying a brand new car.
do you have a car currently which it operational? save a bit more and then buy a second hand near new car -e.g. 12months old with ~10,000kms on the clock. that's what I did a few years ago and ended up with a top of the line current model diesel outlander for $14000 less than buying it brand new.
I'm 21, and no my current car just broke down hence the need for a new car. I plan on keeping it for the next 7-10 years until my needs change hence why I want to buy with very low kms now
you will just be paying a hellish amount for insurance (because you will want comprehensive for a new car). so seriously, buy something second hand that is 3 -5 years old with lowish Kms. and your comprehensive insurance will be so much lower. or get something 10 years old and cheap but reliable and just get 3rd party. and all the money you are not spending on a new car and stupidly expensive comprehensive insurance then you can save and then actually buy a car outright when you're 25 and are not hit with crazy insurance costs.
my first car (in 1991) was a 1975 toyota corona. 3rd party insurance which cost $100 a year. when that died in 1998 I bought a 1994 daihatsu charade for $5500. and paid $150 a year for 3rd party. I sold it 2 years later for $6500 (go figure) and lived overseas for a few years and then came back and paid cash for a brand new mazda 3 and because I was over 25 (27) I paid ~$250 for comprehensive.
I'm just saying as an Ozbargainer, look at reducing your costs.
Thanks for sharing and helping me out!
I didn't know toyota made corona beer's 😀
All car loans HAVE to be covered by comprehensive Insurance, it a term of the loan
@andylch:funny, the photo of the brown fifth gen Toyota corona shown in the Wikipedia article is located in the same street as my uncle in Fitzroy. I've been eyeing it off for a few years.
Don't forget on a demo you will likely need to pay for the transfer fees, registration and stamp duty - which could add a grand to the demo price. Whereas a brand new car advertised "on the road" will have these included in the price
Thanks for the tip, fortunately the price i mentioned was the driveaway quote
Try society one or ratesetter
Try Vw finance. 4.0%. You can discuss with them how you'd like to set it up.not that Vw finance can be used to buy any car, not just a Vw.
Find out early exit fees on the bank loan and car loan, and compare the 2.
The financiers might prefer to loan you for 2 or 3 years instead of 1. Just because of the high payments over 1 year.
I just lease now and let them worry about insurance, fuel, rego. I just take a hit on my salary so there's some pre-tax $ at work and it makes budgeting simple and there's no huge financial whack up front. It's lazy but I like it
Some novated lease deals i have seen recently are bloody great as it takes care of everything from front to rear bar and the running costs all in one price.
I was going to do it but my km a day is an issue that i really need to look into.
Oh trade your POS current broken down jolloppy into the deal, dont forget its worth more to you used. I traded a car once and it was a near thing it made it into the dealers on the day (by that stage it was near dead with coolant, leaking, running like a eperleptic drunk) but hey, saved me $2,500 (you will get $500-2k min as a trade and they cant take it for a spin but they can ask you to start it) )
There's no such thing as a minimum trade on a new car. I've even seen cars get denied because they weren't even worth the effort as scrap metal!
Yep. When i purchased my recent new car they ummed and aaaaaed about my trade to the point of saying no but they took a couple of grand off the price.
It was a good gesture but when you think about it it was kinda bad.
Not sure if this is possible but you can put the loan amount on your cc instead and then do a bal transfer int free to another provider which has some kind of int free offer going on. Total cost of the loan would be around 4-5% ballpark (cc surcharge of approx 2% at dealer and 1-2% for bal transfer fee while moving from one cc to another for the int free deal). Also saves on the hassle of shopping around and spending time and energy for car loans.
honestly, we can't expect to find you an answer without you telling us what the dealer is offering. And then I suspect that when you do find out what the dealer is offering, you'll already have the answer haha.
It's not just th interest rate - there'll be application and monthly fees and any early repayment fees too. Check those elements of the loans.