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HOW DOES CAR FINANCE WORK?

When you want to buy a new or used vehicle, saving up from scratch and purchasing a car in cash can be out of the question. When we’re eager to buy a new car, it’s easy to overlook an important aspect – how can we pay for it? How does car financing work?

At Werribee Mitsubishi, we’ve put together this simple guide about how car financing works and why financing through a certified dealer can be easier than you think. Car financing lets you borrow money to afford your vehicle, and in return for the loan, you pay interest – just like a mortgage.

We’ve got a range of vehicle financing options to suit every budget - making it possible to drive away your new Mitsubishi sooner rather than later.

As proud partners with Ausloans, Australia’s leading finance provider, we work with you to find the perfect solution from a panel of over 40 lenders. Applications can be made easily online, and lending can be tailored to suit your needs. With interest rates starting under 5%, Ausloans is a great choice for car financing.

So, what do you really need to know about car financing?

What is dealer financing?

Dealership car financing refers to the loan options provided by a dealership. When you choose to finance your car through a certified dealer, one of our friendly expert finance representatives will manage all the paperwork for you – making the whole process completely stress-free. Dealerships often provide lower interest rates than other car loans, which makes them a popular choice.

Load rates and term

The first thing to consider when you’re contemplating a car loan is the interest rate. If you choose a fixed interest rate loan it means that you’ll pay one interest amount for the entire loan term. If you opt for a variable rate loan, it can go up and down with the market – which can make it harder to budget each month.

The loan term is the amount of time that you’ll spend paying off the vehicle – which is usually between three and five years. A longer loan term means you’ll be paying off your car for longer, but the payments will be smaller.

Figure out your budget

Considering every cost - including car servicing, future repairs and registration will help you form an accurate view of your car financing options. When you choose dealer financing at Werribee Mitsubishi, we’ll be here to answer your questions and help you make the best choice for you.

What is a balloon payment?

A balloon payment is a lump sum that customers can pay at the end of the loan term. Balloon payments, usually offered by dealerships, allow you to reduce the cost of monthly repayments – just like a larger deposit at the start of your loan agreement.

Balloon payments are typically a percentage of the total cost of your loan, for example, if your loan was $40,000 and your balloon payment was 30%, you’d pay a $12,000 lump sum at the end.

We’re here for you

Contact us today to find out more about car financing. For over two decades, the friendly staff here at Werribee Mitsubishi have been selling new and used vehicles to happy customers in Hoppers Crossing, Werribee and surrounds.