The most important factors to consider are:

What kind of car do you want?

What kind of car can you afford?

How much money do you need to borrow?

How much will you get for selling or trading-in your old car?

This will give you a very good idea of what you can and can’t buy in order to borrow the right amount. Always be flexible when you are shopping for a car. If there are similar options to your dream car and it is more affordable at least consider them.

Choosing a New Loan

Choosing a new loan can be a bit of a head ache but if you know how much you are willing to spend then it just takes some patience. You need to consider exactly how much you want to spend (stick to the maximum here) and then find out what you can buy for that money. You may be disappointed if you find the dream car first and then find out you can’t borrow that much money.

Consolidating Debts

Too many people confuse themselves and their finances by having numerous credit cards, personal loans, a mortgage as well as other debts. Applying for a new car loan is an opportunity to ask about consolidating all of your debts. This simply means putting all of your debt under one account so you know exactly how much you owe.

Ask yourself these questions to see if you need to consolidate:

Do you have more than one credit card?

Do you have personal loans and a mortgage? You may be able to consolidate your personal loans into your mortgage to save on interest.

Do you have any savings? You may be able to pay out some of your debt early in order to improve your borrowing power.

Choosing the Right Car

After all the boring financials are taken care of you will want to see to the task of finding, and testing, a new car. You should have a list of features you want your car to have and keep in mind the things you really need. You may also have some brand loyalty (Ford versus Holden) and that can also give you a more precise aim for your new car.

Always take the cars for a test drive as you may like the look of a car and then find you hate the feel of it when driving. Also try and check how easy it is to find spare parts for as the car may be nice but repair costs may be astronomical. The last thing anyone wants after purchasing a new car are expensive repair bills!

Up-sizing Your Car and Not Your Debt is a post from: Dreamloans Blog

A car loan works in exactly the same way as a personal loan, the only difference is that a car loan can only be used to purchase a car, which is then held as security. Most lenders will not hand over more than $40,000 but there are a select few that will lend you over $100,000.

2. Understand the Components of a Car Loan

Here is a list of the basic components of a car loan that you need to know before you step into a lenders office:

• The Term – The term of a loan is its length. So if you take out a loan with a term of 48 months, then that is how long you have to back your lender or dealer. Keep in mind that the longer the term, the more interest you will have to pay.
• Interest Rate – The interest rate is a fixed or variable percentage of the loan you originally took out. You will have to pay this percentage back to the bank on a set basis every year – monthly, quarterly or annually.
• Down Payment – The down payment is the money you can afford to pay the lender immediately. Remember, a larger down payment translates into a smaller loan, so even if your lender doesn’t require a down payment, put some money down anyway.

3. Know Your Budget

Now that you know all the components of car loans, it is time to evaluate your own personal finances. How much can you afford to take out? And just as important, can you afford the interest repayments? Here is a quick hypothetical example:

Sarah has just received a $10,000 car loan from her local bank. The term of the loan is 36 months and it has a fixed interest rate of 7% per year. Under these arrangements, the maximum interest Sarah will have to pay is $700 a year, $2,100 over the life of the loan – and if she steadily repays the loan it will be much less.

4. Shop Around

With your budget sorted, now it’s time to shop around for the best car loan. Mark Franzmann from the Bank of Queensland offers the following advice – “the same way you’ll haggle over the price of the car, you should haggle over the finance.”

5. Read the Terms and Conditions

There are many pitfalls in the terms and condition of some car loans. Some penalties are not clearly identified in the fine print, so it is important to go over the paperwork thoroughly. If you are unsure about something, ask the lender to explain to you in a language that you can understand. To be extra safe, read the government’s Consumer Credit Code available at – www.creditcode.gov.au.

Obtaining a car loan doesn’t have to be a stressful experience. With these five steps in hand, you will be driving away in a new set of wheels in no time! Good luck!

Getting a Car Loan in 5 Easy Steps is a post from: Dreamloans Blog

Advantages of lease. If you are leasing the vehicle you can probably get a full deduction on the cost where you might not be able to get the full cost of the deduction of the cost if you bought the car. Check this with your accountant. This can be good if you don’t want to shell out all of the money for the car immediately with a car loan, but remember it is not an asset that you own. Your loan also has certain tax advantages over cashing out yourself. Make sure you understand these.

Keeping good records of use. It is important that you keep all receipts of use and maintenance of your car. There may be many other costs of maintaining your car that add up over time and you can probably claim them as tax deductions. Car cleaning products can get very expensive. Keeping the car you own in good condition is extremely important.

Business and personal use. Most small business owners and sole traders will be using their car for both personal and business use. It is a good idea to talk to a professional how to make the most out of your tax deductions without attracting attention to yourself. What is a reasonable amount of business use?

Image. There is no doubt that success breeds success. Having a good image in front of your clients can have a very important impact on your business, and it is important to balance this. If they think you are making too much money it might not be good, and not looking good enough can also have detrimental effects.

Favours. Intangible favours cannot be calculated in business, and the fact is that they can go along way. Using your car to your benefit can be very beneficial. Opting to be the one that takes care of driving on a night out with clients can really help you win business. Know that you are still doing business and it is highly likely that you can claim this use as business related.

The line between personal and business can be very blurred and it is up to you to make sure you have sound advice and understand it is up to you to take full advantage of tax laws and good record keeping is a big part of that. Good small business owners know how to do this.

Tips For Small Business And Making The Most Out Of Your Car is a post from: Dreamloans Blog

Basic concept of leasing. The basic concept of leasing, it is much like renting and apartment. You pay for what you use without actually owning the car. This can mean that you are paying less on a monthly basis because you are only paying for a portion of the car, essentially what you use. When you buy a car, you own it, no matter how much you use it.

Why would someone choose a lease? If you are the kind of person that likes to change their car regularly, and likes a new car often, leasing can be a very good option. Like comparing renting a house and owning a house, there are a lot of things you need to do to buy and sell your house to move, compared with renting. There are advantages and disadvantages.

Advantages of leasing. You can regularly upgrade. The car will most definitely remain under warranty and this is a big factor for some people – always driving a car that is under warranty. Depending on the specifics but generally speaking monthly repayments on a lease will be less than monthly repayments of a car loan for the same vehicle. You will pay lower taxes, because you are not buying the whole car.

Disadvantages. You should be careful to check the terms of your lease and make sure that you are getting a good deal. Sometimes there are upfront payments that can really blow out the cost. Terminating the lease too early could get costly. Check for restrictions on the lease, there may be tight restrictions on the mileage of the car, and going over that can get very costly. And remember it is not your car and so you might not be able to make some of the changes that you want in your own car.

2 types of leases. Generally speaking there is 2 types of leases, ones which when the lease is over you must hand back the car. The other type, you can pay a certain amount and purchase the car at the end if you wish so. Some are a fixed price and others are negotiable.

Hassle free? You must check the terms of your lease and how insurance issues will be dealt with. Sometimes people find themselves in hot water if the vehicle they are paying for on a use-pay basis is stolen and it is important you cover yourself for all situations. Some people consider it hassle free as they don’t wish to own the car and all that comes along with that.

Leasing or Owning a Car? is a post from: Dreamloans Blog

Shopping around. Just like anything else, there are a lot of associated costs and especially time when you do things by the phone or in person. With the way that many companies and business are set up, it does not mean that you can get any answers or any more information than you can get online. Unfortunately many businesses have taken the power of information away from their shop front, and the people there will only be able to handle your application with the same amount of information as the online shop does.

Filling out paperwork. This is one of the biggest hassles of applying for a loan in person. Filling paper work is no easier than applying online, and because of the modern approach many companies have taken to developing their website it can often be more user friendly instead of outdated forms. Online information is normally simplified.

Dealing direct. Remember when you make an application and send it in, it goes directly to where it is supposed to. Your face to face application is still handled by someone and they will have to process it. Applying online will save you a lot of time. Your application will be dealt with swiftly.

Loan calculators. Many online application processes include online calculators to save you the trouble of having to work it out for yourself. This is a very good way to compare a variety of loans.

Comparing. Use the internet to your advantage while you are there and compare many companies in an hour that would take you a long time even if you were doing it on the phone. There are range of comparison sites, that deal with the issues that you are looking at. This is a good way to find out more lenders than you probably knew existed.

Secure. With modern technologies your information is probably safer than it is if you were dealing with someone direct in a store. Only the people and processes that require your information will see it. There will never be a piece of paper lying around that someone who is not meant to be looking at it can.

It is important to understand that many companies are taking the need for someone to be handling your application with their loan application online services. You are taking out the ‘service’ nature of the person that handles your application. Just like an ATM is faster at the bank than the teller, your application is handled faster than in the store.

Advantages Of Applying For Loans Online is a post from: Dreamloans Blog

It should be the same with your car loan too, because if you choose the wrong loan you could end up paying hundreds or maybe thousands of dollars more for the car of your dreams.

Remember that it is not the price of the car you should be concerned about as much as the price of the loan because that is what you are really paying for your car. A $20,000 motor vehicle financed with a car loan at 10% over four years will mean that the vehicle costs you $24,146.86 over the term of the loan. You may pride yourself at getting a discount of $500 from the dealership, but if you were able to negotiate a cheaper loan you could save a heck of a lot more.

So how do you go about getting the best car loan in the first place? Follow these simple tips and you’ll be well on your way.

• Do a budget. This is a vital step and one that is often neglected by many borrowers. You may be surprised to find that lenders are more than willing to give you money, sometimes more than you thought possible. But, at the end of the day you should be able to live a comfortable lifestyle without it being compromised by heavy debt commitments. That’s why it is important to make a decision about the maximum you are prepared to pay each month and at the same time be happy with the way you live your life. Having a budget is the only way you can be certain of this.
• Be prepared to obtain at least three quotes from various lenders. Every lender will have their own particular criteria and will have car loans at various rates of interest. Make sure there are no ongoing monthly fees or, if there are, make sure you take that into account when doing your budget. A $10 monthly account keeping fee raises the effective interest rate substantially, so it is important to compare apples with apples when looking at home loans from different lenders.
• Beware of early repayment fees. It is quite common for people to sell their motor vehicle before the loan has been paid out, or they may wish to make extra repayments to pay the loan off early. This is always a good idea because you can save substantial amount of money on interest payments. However, if the lender charges you an early repayment fee it could negate the savings and leave you with a sour taste in your mouth.

Follow these simple steps and do your homework before deciding on a car loan. The best way to compare car loans is to incorporate all fees and repayments and work out how much the loan will cost over the term of the loan.

How to Get the Best Car Loan is a post from: Dreamloans Blog

The most important thing to consider above all is whether you can afford your loan. You might face a situation where our lender is prepared to lend you more than you thought, but the bottom line is you are the one that has to make the monthly repayment and if you are not comfortable you should reconsider your position.
There are some steps you can take to make sure you are getting the best possible loan and at the same time maximise the amount you can borrow for your car.

• Do a budget. This is one of the most common steps left out by most borrowers. It is really important to lay out a spreadsheet that contains all of your income and all of your necessary outgoings. You should be really honest with yourself here and make sure you list every obligation you have including credit cards, any other existing loans, your home loan and your necessary monthly expenses including food and entertainment. This is the only way you will determine how much you can really afford for a car loan.
• When using on-line calculators make sure you include every liability you have. Some borrowers take a blasé approach to this and only enter their income to establish their borrowing capacity. You will be sorely disappointed if you do not include all of your liabilities because, when it comes to making a formal application, your bank will ask you to list all of your current liabilities and this is the way they determine how much you can borrow.
• Shop around. As stated above, every lender has their own particular criteria and there can be substantial differences between lenders. As long as the monthly repayment fits within your budget and you qualify for the loan, you are good to go. Get at least three comparative quotes before you make your final decision, and don’t forget to try an online lender as well because sometimes they offer special deals at lower rates of interest.

There is no simple formula for determining exactly how much you can borrow for a car loan. As long as you have steady full-time employment and have been in your job for at least six months then, as long as your income is sufficient in the eyes of the lender, you will qualify for a car loan.

How Much Can I Borrow for My Car Loan? is a post from: Dreamloans Blog