On the road to buying your first car?

Are you about to buy your first car? Becoming a car owner is exciting, and it’s also a big commitment. Cars are usually expensive so chances are you’re going to need to sign up for a car loan. Here are some things to consider before you choose a car and apply for finance.

Quick takeaways:

Before you decide on a car it’s important to be realistic about your budget. That way you can make sure your car loan is affordable.
Invest some time upfront in working out your costs. Both running costs and loan repayments need to be work for you.
Do you know how a car loan works? Understanding the structure of your loan will help you consider how to keep costs down.

SetWidth450 Tips for setting up your car loan

First steps to car ownership

If you’re planning the purchase of your first car, it’s likely you’re going to need some help with funding. Cars aren’t cheap and most people have to borrow money in order to be able to afford one. It’s worth considering your options carefully before making a purchase and signing up for a loan.

What does affordable look like?

A good starting point is to work out your own budget, and how a car will impact it. You can make working out your finances pretty straightforward. Simply total your income and subtract your costs. The money left over is what’s available to pay for your car.

What are your running costs?

Owning a car isn’t just about the upfront purchase cost. There are various running costs that need to be built into your budget before you can work out what’s left for loan repayments. Petrol and maintenance are two major running costs. You also need to factor in registration, licensing and insurance.

How would you like to manage your loan?

Once you’ve estimated running costs you need to take a look at your loan options. What role do you want your loan to play? Some people like to focus on repaying debt as quickly as possible. That may mean letting lifestyle costs take a back seat in favour of fast repayment.

Other car owners would rather keep repayment costs down and have cash available to pay for other priorities. Whichever direction you prefer, remember that the longer you take to repay your car loan: the higher the interest costs.

Review your options and do some research

Now you’ve got an idea of your budget and you’ve reviewed your priorities; it’s time to see what’s on offer. Pull together a list of car loan providers and find out: how their loans are structured; the interest costs; and any fees or one-off payments. Remember to write everything down so you can review your options before you apply.

First time borrowing?

If you haven’t borrowed money before, you may find it more challenging to get access to cash. That’s because borrowers check your credit history to see if you can be trusted with their money. If you haven’t borrowed before there’s no credit history to show that you’re good at managing your debts.

Don’t let your credit history get in the way of buying your first car. It’s worth taking time to discuss your position with a car loan company that you trust. They should be able to talk you through your options and help you manage your loan and keep borrowing costs down.

Buying your first car is big step both for you and for your independence. It’s important to have a really good understanding of how your car finance works. Being able to manage the structure of your car loan will help you keep costs down. That means you can set up your finance to meet your budget and your lifestyle needs.

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Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure the content is correct, the information provided is subject to continuous change. Please use your discretion and seek independent guidance before making any decisions based on the information provided in this article.

IMPORTANT INFORMATION

1. Fixed interest rates range from 9.95% p.a. to a maximum of 29.95% p.a. on a minimum 12 month to a maximum 60 month loan term. The actual interest rate charged to you will depend on your circumstances, the type of lending required, the security provided, and is determined by the lender.

2. Fees apply, including an establishment fee of up to $450 and an introducer fee of up to $995. A loan of $5,000 over 12 months at 10.95% p.a. has fees totalling $495 and a total repayment of $5,832.00 equating to 12 monthly payments of $486.00.

3. Approval is subject to meeting lending criteria, and affordability test applies. Our lender will independently assess whether you are eligible for a loan.

4. One hour application decision subject to affordability test, the applicant meeting the lending criteria and supplying all the required information to process the loan application.

5. Same day payout subject to the applicant meeting the above conditions and completing loan documentation by 12pm.

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I/We

Declare the information provided in my/our finance application is true and correct and that I am/we are over the age of 18 years and I am/we are not an undischarged bankrupt/s;
(i)Verifying any information that I/we give to you (or information that you may collect from other sources) with third parties and third party databases, including Government agencies (for eg. NZ Transport Authority, Dept of Internal Affairs, Motor Vehicle Register (name and address), PPSR) for a purpose related to your application for credit, or administering your account with us, including for fraud prevention and complying with the Anti-Money Laundering and Countering Financing Terrorism Act 2009.
(ii) There are two ways that you can restrict access to your personal information on the Motor Vehicle Register in certain circumstances, namely:
1. Opting-out
2. Obtaining Confidential status
Opting out is a very limited form of restricting access to your information, and it does not mean that Waka Kotahi will never disclose your information to third parties.
For more information about who can access your personal information on the Motor Vehicle Register, and ways to restrict access to your personal information.
Visit: https://www.nzta.govt.nz/vehicles/how-the-motor-vehicle-register-affects-you/who-can-access-register-information/.
Appoint you [One Partner Ltd, trading as LoanSpot / loanspot.co.nz] as my agent to collect, use and disclose my personal information for carrying out credit checks on me with a credit reporting agency. This will require you to give my information to the credit reporting agency as well as the credit reporting agency providing information about me to you.
I authorise any third party to provide my personal information to you for any of these purposes.
I understand that if you disclose my personal information to a credit reporting agency, they may hold my information on their credit reporting database and use it for providing credit reporting services and for any other lawful purpose and they may disclose my information to their subscribers for the purpose of credit checking or debt collection or for any other lawful purpose.
Agree the FINANCE COMPANY may collect from credit reporting agencies, credit providers, my/our employers/s, accountant/s, or other named person/s or relative/s, such personal, financial and commercial information and references about me/us as is necessary for the purposes of considering this application. And I/we agree that you may produce this authority to such parties for the purposes of collecting such information.
I/we agree to meet the cost of an independent valuation of the security to support this application such valuation to be obtained by you in consequence of this applicant. My/our solicitor/agent is authorised to accept any notification on my/our behalf.

I/We acknowledge that if the FINANCE COMPANY provides this finance the FINANCE COMPANY:

Will keep the personal information during this period the finance is provided and for six months after repayments of all credit provided by the FINANCE COMPANY:
May collect and monitor personal information about me/us as is necessary for the administration and protection of such credit: and
May provide any of the personal information to a third party employed by the FINANCE COMPANY to assist in enforcement of any agreement between us.
I/We request the FINANCE COMPANY or any related finance company to send me/us details of other products and services from time to time.
I/WE shall have access to my/our personal information and retain the right to request correction.

Provision of Additional Services

I authorise the FINANCE COMPANY to disclose personal information about me to a credit agency for the purposes of compiling a credit report and creating a credit profile. Further I authorize the FINANCE COMPANY to use my personal information for merchandising, market research and offering additional services including newsletters from One Partner Ltd or the offer of additional credit facilities.

The information that may be disclosed includes: name, address and telephone number; the loan amount of any facility; any debits made; the frequency and amounts of payments made including details of overdue payments. I understand that I have the right to access and request correction of my personal information held by the credit reporting agency.