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Are bank interest rates your best choice?

Looking for a car loan, and you think you've found the best deal with the best finance rate? You have possibly spoken to the bank, and you are sure you have been offered a great deal, after all, it is your bank that you have been with forever.

But before you go ahead, you should always explore the options available to you from another lender, you may just be surprised at the dollars you can save. When it comes to borrowing money to buy a car, there is more to consider than just the interest rate. You should also consider the options available to you considering your possible changing circumstances and needs. For example, what suits your needs today, may not quite be suitable in a few years' time. Future situations are unpredictable and ever changing. You will want to ensure your new loan is able to suit should you need to make changes in the future.

Other things to consider when looking for the best finance deal are early settlement fees, loan establishment fees, lump sum payment options, balloon payments options and re-financing options. Simply being focused on the finance rate, could potentially cost you thousands more than necessary.

Here are some examples:

Colin, 55 – Managing Director

Colin has a relationship with his bank spanning over 20 years, he also using his personal bank for business purposes. Colin has been offered a deal with his bank to borrow for his new personal use vehicle by obtaining an unsecured personal loan. The vehicle is worth $45,000.

Bank Offer: NZVF Offer:
17.95% Finance Rate 10.95% Finance Rate
$450 Establishment Fee $390 Establishment Fee
$300 Early Settlement Fee $50 Early Settlement Fee
3 Year Term 4 Year Term

By taking the offer from NZVF Colin has reduced his monthly instalments, and saved over $3,000 in interest and fees. Colin also has the option to waive the early settlement fee with NZVF if he chooses to upgrade his vehicle before the term of the loan ends.

Sharon, 42 – Mother of 2

Sharon is a full time working single mother with 2 young children. She is keen to upgrade her current small vehicle to one that is bigger and suitable for her growing children and their many activities and school trips. She also needs something practical and affordable. Sharon is looking to purchase a vehicle around $10,000.

Bank Offer: NZVF Offer:
17.95% Finance Rate 10.95% Finance Rate
$450 Establishment Fee $390 Establishment Fee
$300 Early Settlement Fee $50 Early Settlement Fee
3 Year Term 4 Year Term

By taking the offer from NZVF Sharon has reduced his monthly installments, and saved over $3,000 in interest and fees. Sharon also has the option to waive the early settlement fee with NZVF if he chooses to upgrade his vehicle before the term of the loan ends. If Sharon takes the Credit Union offer, she will not only pay more in Establishment Fees, there is also the monthly maintenance fee to add. By taking the offer with NZVF Sharon is saving nearly $600 in fees and her monthly repayments are less that the Credit Union offer, with approx the same amount of interest due to the longer term. The makes the loan far more manageable for Sharon over the long term.

Terry, 23 part time working and Studying

Terry is working most nights and attends University during the day. He needs a reliable car that he can get to work and Uni in. Terry has limited income, but can afford to spend around $40 per week.

Bank Offer: NZVF Offer:
18.95% Unsecured Loan 14.95% Secured Loan
Maximum loan amount $3000 Maximum Loan amount $8000
2 Year Loan term 3 Year Loan term
No Allowance for a Warranty Added allowance for a Warranty
(Must be included in above lending amount)

By taking the bank offer, Terry may be able to buy a cheap run around car that is likely to require maintenance for which he will have to allow funds for. His finance rate will be high as there is not security for the loan so he will pay more interest. With the NZVF offer, Terry can purchase a better vehicle that will be more reliable and he can also have the option to purchase a warranty with the vehicle so he does not need to find extra cash if he does have a problem with it. By having a longer term option and using his new car as security for the loan, his repayments will be lower and the interest less.

NZVF can offer approvals with great deals in under 60 minutes. Most major banks and lending institutions can take hours and more likely days to give an answer. NZVF gives you ALL the options available and depending on your individual needs can tailor a package to suit. NZVF will consider options for Insurances required and available when purchasing a new vehicle, not just the cost of the vehicle itself. NZVF will help you make sensible choices when it comes to borrowing money.
Call us on 0800 227 to speak to one of the team today.