Don’t get taken for a ride on your car loan

Choosing the right car loan can be tricky to navigate. From interest rates and fees to selecting the perfect loan term, there's a lot to think about.  

So no matter if you opt to borrow from a traditional bank or an online lender, there are a bunch of dos and don'ts on getting a car loan you should know about, to avoid being taken for a ride. 

Read on to find out Mozo’s expert car loan tips and compare top car loan deals on offer right now… 

Car loan dos: 

• Compare car loan interest rates: By weighing up your options across a number of lenders you give yourself a good chance of snagging a deal. Also remember, some lenders offer tiered rates that reward customers for having a good credit rating. 
  

• Look beyond the big banks: Right now, the lowest car loan rate from the big four on the Mozo database starts with the number 6, meanwhile the lowest car loan rate from a smaller lender starts with the number 3. However, it’s still important to weigh up all your options to ensure the product you choose is suitable for you. 
  

• Make sure you can make extra repayments at no extra cost: It’s always a good idea to take out a loan that allows you to make free extra repayments whenever you can, should you have some extra cash. Just be mindful, some loans come with early repayment penalties if you pay your entire loan off ahead of time. 
  

Car loan don’ts: 

• Beware of introductory car loan rates: Some car loans advertise a low intro rate, but keep in mind that after a period of time this rate will be hiked up, meaning so will your interest repayments. 
  

• Watch out for multiple fees: While an application fee, a monthly charge and early repayment penalty may seem like small costs separately, when added up they could end up costing you thousands. For example, a $10 monthly fee might not sound like much but over a 5-year loan you’d end up $600 out of pocket on top of the interest you pay and any other fees. 
  

• Remember, the longer the loan the more interest you pay: If you can and if it's feasible for you, opt for a shorter loan term. While your regular repayments may be higher it’ll save you in the long run as it means you’ll fork out less in interest. Just remember, only opt for this if you can afford a shorter term without compromising your everyday finances.