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As a bank manager ...
Don't get to worried about the rate (the lower the better)
The following tips could help
- Pick a term and balloon (get all your quotes the same ie term , amount and balloon , comparing apples to apples helps )
- Ask how many loan repayments and are the payments in advance or Arrears)- This shows how much the car will cost in full over the term of the loan.
- Work the quote out in full ie $200pm * 48 months plus the balloon (if you have one)
- Ask for a discount on the est fee
- Ask if it has a month service fee
- Ask if you pay the loan out earlier how much you'll be charged. (ie break cost )
- Talk to your Accountant , who should advised lease , chattel mortgage or hire purchase . Each has different tax benifits.
Other Tips
- stay away from brokers and car yards (sorry to any brokers in the forum) , but the bank pays a commission to these guys ... and guess where that payment comes from ... the margin on the interest rate .
- Deal direct and don't be scare to bargin with the banks
- Get more then one quote , try a couple of different banks
The traps I have seen
1. Customer quote 48 payments with a balloon , with one rental payment up front . (I couldn't match the repayments ) ... Customer faxed the quote to the office ... wait a minute .... 49 repayments with a balloon . He called Toyota , ' Yes Sir 48 repayment , plus one up front and then the balloon)
2. Most loan docs , don't state a rate (ask for this in writing) . Example - a broker quoted 7.95% .... but my rates where 8.5%. Customer wasn't happy that my rates where so high (the customer was to wrap up in the lower interest rate and hadn't looked at the repayments)... Customer faxed the quote from the broker . When we work the quote backwards ... the broker had add a broker margin of 2% making the final rate 9.75 % . But this rate wasn't shown to the customer , only the base rate was displayed (with no margin)
3. Customers selecting a too higher balloon . Okay this will make the repayments lower but ... when you trade in the old prado & you have a 50% balloon and the trade in less then the balloon . This comes out of your pocket . I've seen a dealer give the customer (with a high balloon) the pay out for the balloon and then tack the different onto the price of the prado .
Hope this helps
Don't get to worried about the rate (the lower the better)
The following tips could help
- Pick a term and balloon (get all your quotes the same ie term , amount and balloon , comparing apples to apples helps )
- Ask how many loan repayments and are the payments in advance or Arrears)- This shows how much the car will cost in full over the term of the loan.
- Work the quote out in full ie $200pm * 48 months plus the balloon (if you have one)
- Ask for a discount on the est fee
- Ask if it has a month service fee
- Ask if you pay the loan out earlier how much you'll be charged. (ie break cost )
- Talk to your Accountant , who should advised lease , chattel mortgage or hire purchase . Each has different tax benifits.
Other Tips
- stay away from brokers and car yards (sorry to any brokers in the forum) , but the bank pays a commission to these guys ... and guess where that payment comes from ... the margin on the interest rate .
- Deal direct and don't be scare to bargin with the banks
- Get more then one quote , try a couple of different banks
The traps I have seen
1. Customer quote 48 payments with a balloon , with one rental payment up front . (I couldn't match the repayments ) ... Customer faxed the quote to the office ... wait a minute .... 49 repayments with a balloon . He called Toyota , ' Yes Sir 48 repayment , plus one up front and then the balloon)
2. Most loan docs , don't state a rate (ask for this in writing) . Example - a broker quoted 7.95% .... but my rates where 8.5%. Customer wasn't happy that my rates where so high (the customer was to wrap up in the lower interest rate and hadn't looked at the repayments)... Customer faxed the quote from the broker . When we work the quote backwards ... the broker had add a broker margin of 2% making the final rate 9.75 % . But this rate wasn't shown to the customer , only the base rate was displayed (with no margin)
3. Customers selecting a too higher balloon . Okay this will make the repayments lower but ... when you trade in the old prado & you have a 50% balloon and the trade in less then the balloon . This comes out of your pocket . I've seen a dealer give the customer (with a high balloon) the pay out for the balloon and then tack the different onto the price of the prado .
Hope this helps
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