If you now feel that it’s time to trade in your old banger or to purchase your first car then this could be a very exciting time for you. In these difficult financial times, it can be very hard saving up all of the money that you need to buy your car outright and so many Australians turn to other alternatives so that they can finance the purchase. You can of course turn to lenders who will specifically lend you money to buy a car or you can look at the other option which is to take out a personal loan to do exactly the same thing.
You might be thinking to yourself that these two things that are pretty much exactly the same but you would be wrong. When you take out secured personal loans, the money can be spent on pretty much anything that you like and you are not just restricted to the purchase of your car. This is why it makes perfect financial sense to compare the costs of both of these options when it comes to buying your next car.
If you have never considered using a personal loan to buy your next vehicle then the following are just some of the reasons why you might choose to do so
- It can be more affordable – In many cases, a personal loan interest rate can be lower than the one offered by a car finance company. Depending how long that you want to pay back the money for your new vehicle, this can amount to a significant amount of money so you get to really cut your expenses and save money.
- It offers more flexibility – Many specific car loans are set out over a specific number of years and so you need to stick to the parameters that are offered to you. They may want you to pay back the car in 3 to 4 years and this may not suit your current financial situation. The beauty of a personal loan is that you can spread out your payments for a much longer period of time.
- You own the car immediately – When you take out a loan specifically to purchase a car then the car acts as the collateral. If you are unable to pay the money back on time then the company will gladly take your vehicle from you. The beauty about taking a personal loan to purchase your vehicle is that you pay the money in full and so the car belongs to you from day one. You are then able to make any changes to the vehicle at any time that you like and you can sell it at any time as well.
The important thing is to also make comparisons when you are considering taking out a personal loan or car finance plan. You need to figure out what kind of credit score that you currently have and if you do have enough money to put down for a deposit.