Driving A Better Deal On Car Loans
Sun Herald
Saturday August 26, 1995
INTEREST charged on personal loans to buy a car is now within striking distance of home rates, thanks to undercutting by a large NSW credit union.
And the offer isn't open just to new borrowers.
Depending on how large your personal loan is, it could be worthwhile refinancing with Community First Credit Union.
It is offering a fixed four-year rate of 10.9 per cent, daily reducible with no fees penalties.
This is up to 8pc lower than some financier charges and compares with bank rates of 13.5 to 14.5pc and the NRMA's 14.5 pc.
On a $20,000 loan for four years, the monthly savings compared with the cheapest bank loan (available from National Australia) would be $25.
Over the life of the loan, the interest savings would be $1204.
Despite the depressed state of the car market, the manufacturers' credit companies charge at least 13.5pc, with the exception of Toyota's 12.5pc. By contrast, US manufacturers offer generous financing terms to induce sales.
Although manufacturers' rates vary between dealers, depending on how much commission they take, information supplied by independent research group Cannex suggests you would do better to get a loan elsewhere and then haggle over the car price and trade-in.
Unlike finance companies, the Community First rate applies to all car loans, irrespective of risk or type of car.
It does not require a bill of sale, so the annual insurance cost is reduced by up to 20pc.
WHAT YOU PAY ON A 4-YEAR $20,000 LOAN
Interest Monthly
rate repayments Penalties Security
AGC 13% $536.55 NO YES
Community First
Credit Union 10.9% $515.94 NO YES
National Australia
Bank 13.45% $541.03 early payout NO
NRMA 14.5% $551.56 NO NO
Toyota 12.5% $531.60 NO YES
Source: CANNEX
© 1995 Sun Herald
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