January 16, 2018

Figuring Out if Vehicle Finance Is Worth It

getting your vehicle financed is a complicated process. even more complicated is the fact that you cannot figure out if the deal you’re about to make is good enough for you or not. when you compare finance schemes offered by different vehicle financeorganizations, it is difficult to analyze which one would suit you more and if the extra amount spent is worth it.

there are a few factors which contribute towards a good deal. these can help you in evaluating the service and deciding if you should avail it or not. here are some of these.

high residual value

residual value is the future value of the vehicle at the end of the lease period i.e. when complete payments will have been made. it is calculated by the leasing – information provider or the bank which lends the loan. residual value is a significant factor in evaluating any lease scheme and contributes 80% towards making a good deal. it is inversely proportional to the monthly payment you’ll have to make. if the residual value is high, you will have to pay a lesser amount per month and vice versa.

suppose a brand new car is priced at $30,000 and you want to return the loan in three years. after this time period, the average price of the car is worth half of its original value which in this case is $15,000. this means that the value is now lowered by $15,000. divide this value by the total number of months in the loan period. the calculated value is about $416 but your monthly payment will be slightly higher
because sales tax and interest rates are also included.

interest rate

interest rate is another important factor in analyzing a deal. many organizations use the term ‘lease factor’ or ‘money factor’ for this same value. find out the interest rate which is offered by various dealers, and choose the lowest one. don’t agree on any rate before you do your search.

low fees

every company charges a different amount. once again, get facts from various dealers before you sign contracts. if you further want to improve your deal, get the organization to reduce service fees, and if possible cancel it altogether. fees include acquisition fee, disposition fee and security deposit, and amounts to over $700. the security deposit is generally waived off but other fees usually have to be paid. nevertheless, try to negotiate with the company.

customer retention

the best qualitative method of analyzing any lease scheme is to get feedback from their previous customers. if they are happy with the service, the deal is worth it but if they are not, then get your car leased through another dealer.

there are several online sites as well which can guide in this regard. these sites state their results as a percentage of customer retention. the higher the value, the better the leasing company is.

please visit www.student-finance.com.au for more information on car loans and financial institutes. if you are interested, the organization will also refer you to other institutes which provide these services.

For more information, visit 5 Commandmends for Buying a Car.  Or you could also look at Useful Car Loan Tips

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