for New Car Loan

Hi OzBargainers,

I'm looking at buying a new Forester (or similar, but we like the Subaru most so far) and I'm curious to know everyone's thoughts on, or alternatives. I have not financed a car before.

Key info:
Toyota Finance through Subaru have offered me 5 years at 5.7%, or 7 years at 5.4%. From what I understand, there are monthly fees, premature pay off fees and a $600ish dealership fee.

I do not have enough redraw in my 1.99% fixed home loan to take the whole amount needed, having moved into my new home almost a year ago. I do have a little bit in there I could use though.

Seems like are offering 4.67% for 5 years at the moment, but I can't find any information about how reputable they are, or anyone's experiences with the company for car loans. There seem to be many complaints about variable home loans, but not much on fixed car loans. estimates that a like-for-like borrowed sum is about $70 cheaper per month than Toyota Finance. It has a $400 establishment fee, which after savings, doesn't seem to matter.

Any help or advice is appreciated, about finance companies, or choice of SUV.


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  • or choice of SUV.

    Oh god, please find the car first

    • She's 99% set on a Forester, so we can work with that for now. Naturally, we would approach the situation in the proper and most logical order of picking a car, then the finance.

      • She? Guessing the wife…?

        I'm looking

        • Yeah, the car is for my wife, but it's my job to scope out finance options.

          • @Werdna54: Bear in mind, once you get approval from the dealer you can further negotiate on the finance by a small amount.

            So by focusing so much on rate now, it could be pointless. Given some cars have wait times of a few months, you'd have plenty of time to arrange finance during that time.

            • @spackbace: That's very useful, thanks. There is a wait until roughly March for a Forester so far, but I was under the impression that finance would need to be finalised before our order was placed. I guess that's not the case.

              • @Werdna54: Looks like cars are flying off the dealer shed during covid. Is it due to less number of units in productions? I never thought Forester will have that long waiting period. I heard RAV4 Hybrid has.

                Anyway good luck with your car search and finance.

              • @Werdna54: You'll need finance approval, or some form or another, be that the dealer or external.

                "Finalising" doesn't happen until close to delivery

  • +1

    Is something wrong with existing car? I don't get why people buy new and take out loans.

    • Not mechanically, but it is too small to suit our upcoming family requirements.

      • -1

        In my experience, size difference between Forester and a hatch isn't really that much? Cars are cars and use the same parking spaces. SUV is taller of course and has a bit more room, but not significantly.

        • +4

          I disagree, a Mazda 2 hatch a significantly smaller than a Forester. But it depends what OP drives now.

          • @mapax: will also add that my Mazda 3 hatch is significantly smaller than a forester as well

    • +7

      People might think you’re a poor if you drive an older car, just take the loan, support the economy, spend money you don’t have.

      • Brilliantly put eye opener 👌🏼

  • +11

    Friends don't let friends take out car loans.

    • -1

      This is such dumb advice. I can pay cash for a car but if someone is offering me 2.5% finance like they are now then I am taking that loan for sure. I can do a lot more than 2.5% on my money.

      • +1

        Its not dumb advice but perhaps you'd be so good to point the OP as there where he can get 2.5%. There's a good chap.

        • Any good broker can do 2.5% right now. Top google result is savvy with 2.85%

          • +1

            @BarryBargain88: Now he's going to have to start a threat seeking advice about savvy, whatever that is.

      • Its still 3.5% after tax that you need to make just to break even.
        Even then 2.5% finance i wouldn't say is the norm.
        More like 5% or 7.5% after tax just to break even. If you have a guaranteed way of making 7.5% please share

        Taken a loan out on a depreciating asset is by far one of the worst decisions you can make.
        Buy a second hand car you can afford thats still in warranty.

        Also bargaining power will go out the window once you say you need finance. Welcome to the world of paying full RRP while you watch any potential savings on the car at purchase evaporate

        • Once again, someone hasn’t checked the used car market at the moment. Only a moron would pay the current used car prices.

          • @BarryBargain88: No one said they had to buy it immediately though?
            In perth the prices are rapidly coming back to norm. If the OP buys in a couple of months it'll be much the same as pre covid prices.

            • @Drakesy: Car sales and gumtree stocks are still declining as of this week. I don’t believe you at all

              • @BarryBargain88: Are they though?

                • @Drakesy: Yes, why do you just write shit comments like that pretending like you know better. Yet it’s clear you have no idea what you’re talking about.

                  2021 Gumtree

                  Jan 06 – 99K (99,445 cars for sale in Australia @ 11:10 hrs)
                  Jan 12 – 95K (94,863 cars for sale in Australia @ 10:34 hrs)
                  Jan 19 – 90K (90,351 cars for sale in Australia @ 08:41 hrs)
                  Jan 25 – 87K (87,679 cars for sale in Australia @ 08:10 hrs)

                  Carsales had 220k cars at the beginning of 2020.

                  Here’s 2021 - down another few 1000 this year.

                  Jan 1 – 125k (125,099 cars for sale in Australia @ 2042hrs Friday)
                  Jan 4 – 124k (124,446 cars for sale and 84,694 used in AU @1616 Monday)
                  Jan 11 – 123k (122,894 cars for sale and 83,170 used in AU @ 0944 Monday)
                  Jan 19 – 123k (122,824 cars for sale in Australia @0023 Tuesday)
                  Jan 25 – 124k (123,562 cars for sale in Australia @0115 Monday)

                  • @BarryBargain88: Australia doesn't equal Perth.
                    Also OP is in Perth.
                    Perth has been out of COVID for 8 months now, the market is roughly 3/4 months ahead.

                    • @Drakesy: Give me some figures then. I don’t believe you one bit. How are KIA, Toyota, Subaru, Ford, Hyundai, infact every brand with months of delays on every model able to get cars to Perth but no where else? It’s the production holdup overseas that’s causing a new car shortage and therefore a used car shortage.

                      You’re absolutely full of it mate. You’re buying every rubbish word coming out of McGowans mouth.

  • I can't offer any help in regards to you finance/loan queries but I was wondering which variant of the forester you were looking at

    • The 2.5i Premium.

      • and there is about a 2 month wait on those is there?
        i'm looking at getting a forester now as well, still a little undecided on the variant, wife doesn't care and thinks the base model is fine, meanwhile im a lil torn. a powered tailgate could be good as well as the 8" infotainment screen so the premium is an option, then the sport one does come with the black rims which look fun.

        • I couldn't see the appeal of the sport, despite liking Orange in as a colour general. Our deciding factor was the powered tailgate and screen.

          Saftey and camera setup is basically the same as the 2.5i-L, but that 6.4 inch screen just seems dated in my opinion. I'd have liked the leather seats, because that's what were upgrading from, but not for that price.

  • +2

    I have car loan with and no issues, would recommended them to a friend

  • Can confirm have a homeloan through for a number of years. No issues what so ever and they would have to comply with ASIC regulations like any lender.

    • Whats your current interest rate compared to the products they are selling to new customers?

      • +1

        Hey mate sorry for late reply.

        Essentially, 95% of the time they matched their current market offering. From memory there was one time in the past where they didn't and I simply rang up and got it 'reviewed' to the new rate. The lady mentioned you can do it every 6 months if they had not automatically updated your rate.

        Honestly, pretty easy to deal with when getting the loan it was pretty much trouble free. But my experience was prior to some of the newer legislation that was passed for more scrutiny so may have changed.

  • -1

    Don't get a loan for a depreciating asset.

    • I must admit that’s my philosophy. Don’t borrow for something you cannot borrow against. But sometimes you don’t have a choice if a need arises I.e. growing family

  • +1

    What's wrong with getting a second hand car a few years old and paying cash?

    • Because not everyone has thousands in cash lying about to buy a car with.

    • -1

      The used car market is up 30%. Only a moron would buy used right now

      • Do used cars cost more than new cars? That's the only way it would make sense to buy a new car.

        • Sold a 2 year old car 2 weeks ago for $32k. When she flicked open the logbook she found the invoice from original purchase. $28k. When the used car market supply picks up this year, that car will depreciate a lot more than a new one. I honestly don’t think you’ve checked out the market recently

  • Got a loan through them late last year. Best rate I could find, and it was very easy to set up. Can definitely recommend.

  • are a very reputable company with head office and support office based in queen st brisbane.
    After extensive research I found their comparison rate, loan features (such as balloon, deposit amounts etc) and early repayment flexibly as the best available for me.

    If you have a good credit score and are employed they will be easy to deal with.

  • Everybody knows when you drive a new car off the lot it loses x% of it’s value….. so that loan may not be the most important factor here. Car auctions can provide amazing deals. Most dealers buy quality stock there and then put them on their lot for a remarkable increase in price after a few cosmetic improvements. Ex fleet vehicles especially. I own such a car and traced its origins to a car auction house only to realise the dealer did very well and I bought a low k’s very high quality car which I have had for 5 years now. It was 2 years old with 50k’s on the clock and I can sell it today for close to what I paid for it with over double the k’s. I could probably get privately more than the auction price the dealer paid for it. But my car is more collectable now which helps. Choosing something that may have a higher intrinsic value may help your depreciation factor which again may mean your loan may not be your biggest priority right now. My 2c

    • +2

      COVID has driven up prices of vehicles temporarily, which is probably why yours is worth more than you paid. As for buying from auction, you can get a bargain, but it’s high risk. Auctions are for the knowledgeable, with cash at hand

      • -1

        How could I disagree with an obvious expert?

        • You have obviously never read the market for lemons.

    • Everybody knows when you drive a new car off the lot it loses x% of it’s value

      Pre-covid, sure. Now, it's common to find 2018 plated vehicles selling for the same, or close enough to the cost of a new one, once stamp duty is added

      2019 plates definitely represent lousy value for money in most sought after models in the current market

  • You should go to a bank

  • Thanks for all your comments and input, turns out my puppy has just injured his ACL and needs surgery. No car for us for a while.

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