New car loans hitting the market just in time for EOFYS
Savvy shoppers have been waiting all year for this. Yes, that’s right, with June rapidly approaching so too are the end of financial year sales (EOFYS) that could see Australians snag a bargain on products as diverse as televisions to overseas holidays.
But EOFYS is also the best time of year to grab a great deal on a new car with dealerships across the country slashing prices on a range of makes and models, successfully luring customers through their gates.
In fact according to the latest ABS data, new car sales for June last year spiked by 23% to total 134,000 vehicles sold, with that number dropping to just shy of 93,000 the following month.
But it isn’t just your local car dealership that’s making it more affordable to buy a new set of wheels next month. Mozo’s database has seen a host of recent changes to car loan products designed to incentivise customers, whether that be a car loan rate cut or a complimentary fuel discount voucher.
Here is a quick wrap up of the major changes that have taken place over the past month:
- Illawarra Credit Union - New market-leading car loan rate of 6.45% p.a. (6.66% p.a. comparison rate*)
- NRMA - Cut its Used Car Loan rate to 6.99% p.a. (7.70% p.a. comparison rate*)
- RACV - Cut its fixed New Car Loan to 5.69% p.a.(6.39% comparison rate*)
How much you could save on your new car loan
Knowing what kind of interest rate you’ll be able to get to finance your new set of wheels is one of the first steps in establishing your car-buying budget before heading to the car yards.
And the good news is that, earlier in the month, Mozo reported that a staggering 16 lenders were offering interest rates at the competitive 6.00% mark (or lower) on their car loan products. Members of the newly-dubbed “6.00% club” include Queenslanders Credit Union and Unity Bank, as well as aforementioned provider, RACV.
In saying that - across the 170 loans in Mozo’s database - the average new car loan rate still sits at a lofty 7.74% - proving it definitely pays to shop around, not only for your car, but your car loan as well.
Using Mozo’s Car Loan Repayments Calculator, we’re able to see just how much a competitively priced car loan could save a car buying couple.
MONEY SAVING SCENARIO
Sally and Steve found a perfectly-sized SUV, a Mazda CX-5, for all of their young families needs and best of all it’s on sale at their local dealership during EOFYS, costing them $32,000. While they have a $12,000 deposit saved up to go towards their new car, they need to take out a $20,000 car loan to get the deal over the line.
If they were to settle for an average new car loan (according to the figures in Mozo’s database) at 7.74%, the couple would pay $403 each month for five years and $4,183 in interest over the life of the loan.
However, by shopping around and securing a car loan at 6.00% instead, their monthly repayments on the same loan would be just $387. While this might not seem like much, it would save them close to $1,000 in interest over the life of the loan. That’s a lot of petrol!
More than a rate: what to look for in your next car loan
Here at Mozo, we know that there is more to a car loan than a cheap, low interest rate. So here are a few of the other top features to look out for in the hunt for your new car loan.
- Low or no fees. No one wants to pay for things they don’t have to, so look for a car loan with low or no monthly or application and sign up fees. Just bear in mind that if you’re tardy with your repayments, no matter how low your ongoing fees are, you’ll have to stump up a late payment fee.
- Minimal early loan repayment. Some people really value the flexibility of paying their repayments early and if you plan on doing that opt for a car loan that won’t penalise you harshly, or at all, for doing so.
- Fee free extra repayments. Want the option to shorten the life of your loan and make additional repayments during the life of your loan, this feature will let you do that without charging a fee.
- Redraw facility. If you’ve gotten into the habit of making extra repayments but also want to be able to withdraw these if you find yourself in a spot of money bother, a redraw facility is the car loan feature you’ll need to get you out of trouble.
Now that you know what you’re looking for why not kick off your car loan shopping spree using Mozo’s shortlist of top-value car loans. Just navigate via the Mozo Experts Choice Personal Loan hub and scroll down to the Car Loans section of award winners to get started.
*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.