Car Loans

We spoke to Steve from Free Credit Report and we’re discussing car loans today.

Free Credit Report will actually assist you to get a Free Credit History which has no obligation, Is that Correct?

No obligation at all, but if you do want a loan we can help.

With a car loan what’s the maximum loan amount you can get for a car?

Now, there’s no real maximum amount on a car loan. It comes down to the borrower’s capacity to pay. So, if someone wanted a four hundred or five hundred-thousand-dollar car and if you could afford it, it wouldn’t be a problem.

So how are car loans normally structured?

Car loans are normally structured from twelve months as the minimum term up to seven years which is 84 months.

Okay so I’ve heard of “Balloon Payments” but I mean it’s obviously not to do with party high or anything.

Explain a Balloon payment?

A Balloon or a Residual Payment a portion of the loan that’s deferred to the end of the term. As an example if you bought a $30,000 car, you could have a $10,000 residual on the car at the end of the loan period and what that does is slightly lowers your repayments, but the reverse is true, so that increases the amount of interest payable over the term. Now it’s popular with business loans because it increases the tax claim on the interest, but we recommend people spread it out over the term of their loan rather than get stuck with the residual or a big payment at the end.

Okay, all right, that’s good advice.

If I have an ABN can I get a better rate?

Yes, ABN and registered for GST. Often there are better rates for corporate customers and it opens up the scope as to how the loan can be structured, what you can buy and you have to declare that it’s more than 50% business use.

Can you help me negotiate a good price on a car because I really don’t like dealing with car dealers?

Sorry car dealers I’m not having a go, but I feel a bit intimidated I’ve got to say.

Okay we can. We offer a free car find service; we have a car broker that we use that can assist and there’s no charge to the customer.

What loans can I get for a business to get a tax deduction?

Usually through a Chattel Mortgage or a Hire Purchase With those, there’s all different structures and we suggest you get advice from your accountant or financial adviser.

So a Chattel Mortgage means basically they take a mortgage over the car until you paid it?

There’s security over the vehicle that you’re borrowing the money on.

That’s great information.

If they want to find out and where they can get a car loan and certainly get a Free Credit Report, where do they go?

Freecreditreport.com.au or you can call on 1-800-100-100 to find out more.