Car loans

Discussion in 'Loans & Mortgage Brokers' started by Angel, 2nd Dec, 2019.

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  1. Angel

    Angel Well-Known Member

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    HI, can we expect our Mortgage Broker to find us a good deal car loan, or do they just stick to housing loans. Any recommendations for cooperative banks? We are looking at RACQ which is, so far, offering better rates than our own bank, Suncorp.
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Depends on the brokers. Many can help but this is not something I am interested in so don't offer it at the moment.

    It is also hard to compete with car yards who often offer discounted rates as they make it up on the sale of the car
     
  3. Lindsay_W

    Lindsay_W Well-Known Member

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    Ask them?
    Some brokers do them, others don't
     
  4. vudu

    vudu Well-Known Member

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    Hi Angel, my broker does vehicle loans with solid savings over mainstream lenders. They should be in the know and have some leverage given their lender relationships. I sort of consider my broker as a loans expert because I am not. Certainly worth asking. And if the car yard can compete on loan rates you're not negotiating hard enough on the purchase. Not being a smarty but its a skill that I have improved over the years with practise, education and of course the associated past costs.
     
  5. craigc

    craigc Well-Known Member

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    Car yards often get a discount on their floor plan holding costs for writing retail paper ( customer loans). So they can often offset & receive discounts on their own costs even if writing discounted loans to the buyer.
    This may not necessarily mean there is more $ to negotiate in the car itself though if not using the finance option.
     
  6. kierank

    kierank Well-Known Member

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    @Angel, I am not a big fan of using OPM for buying cars as one loses money paying interest and the asset is depreciating in value. If the car is for private purposes, these losses are not tax deductible.

    Also, if you do borrow money for a car, double check the interest rate quoted. That is, enter the amount borrowed, the repayment amount and the term in a calculator to determine the real interest rate
     
  7. Angel

    Angel Well-Known Member

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    Our broker looked at the finance available at RACQ Bank and suggested it is better than any of the companies he uses (5.89%) We put the documentation in yesterday and will hear back next week. According to the lending officer, he said they are very strict at cross checking the application against our bank statements, but not as difficult as I had imagined. Once we get a loan pre approval, then we will know what budget we can spend up to.

    In response to Craig's post, we have been watching many UTube shows comparing and reviewing various cars. There are a few car brokers who also give tips about negotiating price at a dealership. They all suggest you never discuss finance until after you have negotiated and agreed on price. Once we know the maximum $ amount we are prepared to spend, we will give the car buyers at RACQ our shopping list. This is the first time in our lives that we get to select the vehicle that we actually want rather than be dictated to by outside forces like family pressure. Last time we bought a car, it was a cash sale. I am certain the dealership still managed to rip us off with all their contract BS. I would prefer to buy privately TBH.
     
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  8. Angel

    Angel Well-Known Member

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    Thanks @kierank. We could pay cash if I redraw on the mortgages and sell our shares. Um, no, that's not happening.
     
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  9. wylie

    wylie Moderator Staff Member

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    Wouldn't drawing up a (non-deductible) mortgage give you a much better interest rate?
     
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  10. Angel

    Angel Well-Known Member

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    The mortgages have a better interest rate but the loans themselves are stuck in bad - debt - type - consumer-land. The only loan we could get back in 2016 was not particularly favourable to the user. They have no offset and the redraw is only for a tiny amount. If you dont use it, you lose it. Besides, I will probably want to access it next year when we go to sell the townhouse (new carpet, etc)
     
  11. The Y-man

    The Y-man Moderator Staff Member

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    craigc likes this.
  12. kierank

    kierank Well-Known Member

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    After returning 25%+ this calendar year, I feel the ASX will probably “tank it” next year.

    I am not selling as we don’t need the cash but, if I did, I would give it serious consideration.

    I can’t see the ASX having another stellar year in 2020.