They say every cloud has a silver lining, and if 2020 is the year you’re looking to pick up a new car, you may find that the odds are in your favour.
According to the Federal Chamber of Automotive Industries (FCAI), car sales decreased by 7.8% between the 2018 and 2019 financial year. A total of 1,062,867 new vehicles were sold in 2019, making it the lowest number of sales on record since 2011.
“2019 reflects a tough year for the Australian economy, with challenges including tightening of lending, movements in exchange rates, slow wages growth and, of course, the extreme environmental factors our country is experiencing,” said Chief Executive of the FCAI, Tony Weber.
While the slump in sales isn’t good for car manufacturers and dealers, it is good news for Australians who are in the market for a new car. According to car sales site, Which Car, car manufacturers may discount vehicle prices as they’re faced with the burden of having to meet sale targets and goals for the year.
In addition to lower car prices, the other good news for buyers is that car loan interest rates are also at historical low levels. At the time of writing, the lowest secured car loan rate in the Mozo database belongs to MOVE Bank at 4.89% (5.16% comparison rate*), while the average secured car loan rate is 7.10%.
“Just as you shop around for the right make and model of car, it’s important to also shop around for the right car financing option,” said Kirsty Lamont, Mozo’s money expert.
“Say you borrowed $30,000 to be repaid over 5 years. According to Mozo’s car loan repayments calculator, you’d save $2,014 by going with the MOVE bank car loan over a loan with the average rate of 7.10% - that’s a big saving.”
But of course, there’s more to a loan than just the rate, so if you’re about to start your hunt for your perfect car loan, you’ll need to factor in a few other features, like:
Fees - The last thing you want to have to fork out on is fees and some car loans can come with a whole heap of them. Watch out for things like application fees, service fees and even early repayment fees and try to choose a car loan with minimal or zero fees!
Repayment flexibility - No person’s lifestyle is the same, so it makes sense to opt for a car loan that allows you to make your repayments on a schedule tailored to your lifestyle, whether that’s weekly, fortnightly or monthly.
Repayment features - Many loans also come with a few other loan features that can help you pay off your loan faster and save on interest. Having the option to make extra repayments to your loan without penalty can save you a bundle on interest repayments. And it might even be worth choosing a loan that offers a redraw facility. This will allow you to redraw your additional repayments if you ever come into an unforeseen bill or expense.
Ready to start your search for the right car loan? Compare deals below or head on over to our car loan comparison tool to search our full database!
*The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may inﬂuence the cost of the loan.