If you’re in the market for a new car, but don’t have the funds to purchase one outright, a car finance broker can help you secure a car loan that fits your budget. In this step-by-step guide, we’ll walk you through the process of using a car finance broker to purchase your dream car.
Understand the role of a car finance broker
A car finance broker is a professional who can help you secure a car loan from a lender. They have relationships with dozens of lenders and can help you find the best loan for your specific needs and financial situation. It’s important to understand that a car finance broker is not the same as a car dealer, and they do not sell cars.
Loans For U has accreditations and established relationships with more than 40 of Australia’s most reputable bank and non-bank lenders, giving customers access to a wide range of finance options. With access to hundreds of financial products, including some that are not publicly available, Loans For U can offer customers tailored financial solutions to fit their unique needs.
Determine your budget
Before you start shopping for a car, it’s important to determine your budget. MoneySmart’s Budget Planner tool is an excellent resource for creating a budget and getting a clear picture of your monthly expenses.
To use the tool, simply input your income and expenses, including your regular bills, groceries, and entertainment expenses. You can then see how much money you have left over each month and how much you can allocate towards car finance payments. By using this tool, you can better understand your spending habits and create a realistic budget that suits your needs.
Keep in mind that you’ll also need to factor in the cost of insurance, maintenance, and fuel.
Research car finance brokers
When selecting a car finance broker, it’s important to do your research. Look for a broker who has experience in the industry and a good reputation. Read reviews from previous clients and ask for referrals from friends or family members who have used a car finance broker in the past.
Meet with your chosen broker
Once you’ve selected a car finance broker, it’s time to meet with them to discuss your needs and budget. This is regularly done over the phone depending on your schedule and availability and can also speed up the application process. It’s not uncommon these days for the entire loan approval and settlement process to take place online.
Your broker will ask you questions about your financial situation and help you determine the best loan options for your needs. Be sure to ask any questions you have and clarify any terms or conditions you don’t understand.
Choose a lender and loan terms
After reviewing your options, your car finance broker will do all the legwork for you and show you which lender most suits your individual finance needs and budget. They’ll work with you to negotiate favourable terms, such as a favourable interest rate, and will explain any fees or charges associated with the loan.
Apply for the loan
Once you’ve happy with the lender and loan terms, your car finance broker will submit your application on your behalf. They’ll collect all the necessary documentation, such as your income and employment history, and submit these on your behalf as well. They’ll also follow up with the lender to ensure the application is processed in a timely manner.
Sign the loan agreement and purchase your car
After your loan application is approved, your car finance broker will help you sign the loan agreement and finalise the purchase of your car. They’ll make sure all the necessary paperwork is completed and will coordinate with the car dealer to arrange for payment and delivery of the car.
Finance applications can vary depending on individual circumstances. While some people may have a specific car in mind, others may seek pre-approval before beginning their search for the perfect vehicle. It’s important to note that the process may not always follow the exact steps outlined in this guide in this order, but it provides a general overview of what to expect when working with a car finance broker.
Working with a car finance broker can help you save time and money when purchasing a car. By following these steps, you can ensure you’re working with a reputable broker who can help you find the best loan options for your needs and budget. So, if you’re in the market for a new car, consider working with a car finance broker like Loans For U to make your dream car a reality.
If you would like more information about our service or would like to chat about your individual car finance options, contact our friendly Finance Consultants today on 1800 538 287 for an obligation-free chat about your finance needs.