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Car Finance Myths Debunked: What You Really Need to Know
Uncover the truth behind common car finance myths. From rates to credit impact, we break down what matters.
Quick Picks
Lowest APR: Harmoney Car Loan.
Best for Bad Credit: Instant Finance Car Loan.
Best for Large Amounts: MTF Finance Car Loan NZ.
Myth 1: All Car Loan Rates Are the Same
Many assume car loan rates are uniform, but they vary significantly based on credit profile and lender choice. Some lenders like MTF Finance offer rates from 8.95% p.a., significantly lower than major banks. Consider lenders with competitive rates if you have good credit.
MTF Finance Car Loan
The draw here is MTF Finance's competitive rates starting at 8.95% p.a., which are notably lower than those offered by many banks. It's a solid pick for those with a good credit score looking to save on interest.
Myth 2: Only Banks Offer Car Loans
Contrary to popular belief, non-bank lenders can be a better option. AA Money offers competitive rates from 9.40% to 12.15% p.a. for both new and used vehicles. These lenders often provide more flexible terms and quicker online applications.
AA Money Car Loan
AA Money stands out with its trusted brand and competitive rates for both new and used vehicles, making it a viable alternative to traditional banks.
Myth 3: Bad Credit Means No Car Loan
Having bad credit doesn't mean you're out of options. Instant Finance caters to borrowers with imperfect credit, offering loans with fixed rates from 9.95% to 29.95%. This makes it possible for those who might not qualify at traditional banks to still secure a loan.
Instant Finance Car Loan
You'd pick Instant Finance if you have a lower credit score and need an understanding lender. While the rates can be high, they provide an opportunity for those who might otherwise be turned away.
Myth 4: Longer Loan Terms Are Always Better
While longer terms mean lower monthly payments, they can lead to higher overall interest. Westpac offers terms up to 5 years, balancing manageable payments with interest savings.
Westpac Car Loan
The trade-off here is between lower monthly payments and higher total interest. Westpac's shorter terms can save you money in the long run.
Myth 5: Checking Your Rate Hurts Your Credit Score
A common misconception is that checking your rate impacts your credit score. Harmoney offers a soft credit check that doesn't affect your score, allowing you to see your rate risk-free.
Harmoney Car Loan
What sets Harmoney apart is its soft credit check, which lets you explore rates without damaging your score, a great feature for cautious borrowers.
Having debunked these myths, it's essential to focus on what truly matters: understanding your credit profile, comparing rates, and choosing terms that align with your financial goals. Each lender offers unique benefits, so assess what fits your situation best.
