Purchasing a new vehicle is an exciting and truly rewarding experience. However, it can be quite a tedious process, between choosing the right make/model, negotiating the best possible price and arranging affordable, low-rate finance.
No matter which vehicle or asset type you are intending to purchase, there are some very important points to consider before choosing which finance option best suits your needs.
Read this article to learn more about the pros and cons of financing through dealerships and banks.
What are my finance options?
There are many different options available these days for finance. The specific options will depend greatly on what type of asset you’re looking to finance. For this example, we’re going to use car finance as it is the most common personal asset type financed today throughout Australia.
The most common car finance options available are bank finance, whereby you approach your bank for car finance. Dealership finance is also another common car finance option widely available. A Finance Broker is the third option, which not everyone is aware is an option for car finance.
A Finance Broker acts like a middleman between yourself, the client, and the financier. The biggest benefit of using a Finance Broker is that while a dealership might have access to around 1-3 different lenders and your bank is one single lender (with limited finance products available), a Finance Broker generally has accreditations with up to 40 of Australia’s most trusted bank and non-bank lenders.
This gives you instance access to hundreds of products from dozens of different lenders, whereas through your bank or dealership, you may be stuck with only a handful of different finance options and in some cases, only one.
Dealership Finance: Pros and Cons
While dealership finance provides one of the fastest ways to obtain finance for a vehicle, there can be many unintended drawbacks to using dealership finance.
Firstly, if you obtain finance from the dealership you are buying the car from, you lose all negotiating power as they control the deal. They have no reason to negotiate or give you a discounted price for your vehicle as you are reliant upon them for both vehicle and finance.
Bank Finance: Pros and Cons
Going directly to your bank might sound like the easiest option for securing low-rate finance and in many cases, it could be, since they know your banking history.
However it is important to remember that they may only have one or two car finance products available and therefore may not be able to offer the most competitive finance rates available on the market.
They may also have very stringent lending criteria and risk appetites, therefore may not consider vehicles over a certain age, or may decline your application based on a technicality such as an overdrawn account or because some single aspect of your application doesn’t meet their strict criteria.
So what is the best option?
If you’re looking for flexibility, affordability, and great value, consider using a Finance Broker such as Loans 4 U.
We offer access to hundreds of products from over 40 of Australia’s most trusted lenders, so you know that you’re getting the best finance option for your specific circumstances.
Your Loans 4 U Finance Consultant does all the legwork for you and can save you time and money while generally arranging fast, flexible, same-day finance approvals.
So speak to our friendly team today on 1800 538 287 to discuss your individual finance requirements. Or you can simply apply online today and your personal Loans 4 U Finance Consultant will contact you ASAP regarding your application.
Best of all, it’s obligation-free, so if you’re not completely happy, you are under no obligation to proceed.