1. Car Loans and Financing in Sydney, Melbourne and Surrounding Areas Purchasing a new or used auto is a big decision, one involving a lot of time, test driving, and consideration of your financial situation. Finding affordable car loans and car finance options are important to ensure you are awarded a low interest rate. Other considerations include passing a credit check regardless of bad credit history, or having no credit for a lender to go off of. For car buyers in Sydney, Melbourne and other areas across Australia, cheap auto loans are just as important as they car theyre going to purchase. When starting your search for the perfect vehicle, its important to know the financing options youll have available before you approach the dealer to ensure you get the best value for your money during purchase of new cars or looking for a used model. Loan Categories The first step to searching for cheap car loans is to determine which type of financing is appropriate for your financial situation. There are two main types of car loans and each function in a different manner. Unsecured Loan Unsecured loans are those that use nothing but the borrowers credit as collateral. Examples of this would be a signature or personal loan from a bank, or purchasing a car on a credit card. Oftentimes, these types of loans will limit the type of vehicle one can buy as theyre not able to get as much funding for a new vehicle over a used. While no repossession can take place, using a credit card to purchase a vehicle or securing a personal loan can still be risky. Failure to repay will cause credit damage, and make it that much harder to secure a loan in the future when youre working with bad credit.

2. Secured Loans A secured loan is a loan that is granted with an asset in your possession as security for repayment of the financing. Many types of car loans granted from banks and other financers are secured, and as such offer lower interest rates than with unsecured options. When completing an application for a secure loan, a promissory note will spell out the type of asset (usually the car) that is being used as collateral for granting the loan. If the loan cannot be paid consistently on time, or the loan holder falls behind on payments the collateral specified in the promissory note can be repossessed by the bank. Typically, if repossession happens, the lender will sell the vehicle or other collator to the highest bidder at an auction. If a balance remains after the sale, that balance still belongs to the name of the party on the loan and the amount can be submitted to collection if left unpaid. This can be very damaging to your credit history, and can make it difficult to get loans on other items (such as a house or another auto) later on. As mentioned above, a majority of the loans taken out for new cars are secured loans, and there are plenty of places that offer them. Some have different benefits than others, and you should be aware of those benefits to determine which type of car finance option would be right for you. Lenders and Sources for Car Loans Secured loans are offered usually through a financial institution of sorts, though many used and new auto dealers work with lenders to provide low interest loans to those with bad credit, or instant approval with a quick credit check. Below are the primary resources for auto loans around Sydney, Melbourne and other areas in Australia. 3. Standard Car Finance Loan Often granted through a bank, credit union, or similar institution, the financer lends a buyer the money to purchase their new or used auto. These loans are simple and easy to understand for first- time buyers, but do require a credit check prior to approval. The positive features of these loans are: Ability to add in on-road repair costs into the loan Set monthly payments for the term of the loan Variable or fixed low interest rates secured against the value of the car Flexible repayment times available to make borrowing easier and the monthly payment cheap Some banks or credit unions will offer unsecured loans to existing customers, but they often come at a higher interest rate. New Cars and used cars purchased with a standard loan are required to be fully insured until the balance is paid off. Financed Lease In this type of loan, the financer purchase the vehicle then leases it to the driver. They can use the car immediately with little or no capital involved. Many leases are available to business owners where the car will be used to perform business transactions. Positive features of this style of loan are: Repayments can be tax deductible depending on business usage Fixed low interest rates as the financing is secured against the vehicle value Immediate use of the car with now down payment required. Those who lease vehicles are responsible for monthly payments and any maintenance or repairs the car would require. At the end of the period, the driver has the option to return the car, refinance for another lease, or buy the car for the amount left under the financing contract. 4. There are other types of lease options which are similar to a financed lease that buyers can take advantage of depending on their needs. Novated Lease - a lease involving wage reduction for an employee who has leased a car directly from a financer. The employer is obligated to pay the lease out of the employees wages. This agreement can appeal to those who require a car for business purposes. Operating Lease a financer purchase vehicle and rents it to the motorist for a set period of time. The motorist is not responsible for repairs or risks associated with the car, and at the end of the term they can continue to rent the car or change to a newer model. Choosing Your Loan Discussing your individual finance situation with a lender is often the best way to determine which loan option is right for you. Many banks and lenders have access to a car loans calculator to provide customers with an estimated interest rate for their purchase. Depending on how soon you need the vehicle, sometimes talking directly with a dealer is the best option as often you can walk of the lot the same day with a new or used car and begin driving right away. For assistance with car loans on new cars or used vehicle purchases in Sydney, Melbourne, and the surrounding areas contact Need Finance to discuss options with one of our certified financing professionals. We offer low interest rates, quick credit check, and support for those with bad credit history in obtaining a loan for new cars or used autos. Contact us today to begin the search for your new vehicle!