Car Finance

I had an interesting experience while helping someone finance a car last month and we came across a real shark of a car salesman. I thought it might be worthwhile highlighting a few tricks these sharks often play when it comes to finance.
1. Most importantly, never look at the interest rate quoted and assume that’s what you are really paying. When comparing two deals, you need to look at what your monthly repayments will be. Dealers can be manipulative. I’ve even seen a dealer quote the rate he is paying the bank, not what he is charging the customer.
2. Dealers will often get you to finance items that you really don’t need, like origination fees, establishment fees, and insurances. These will add up and will often result in  a rate well over 10%. A dealership in Perth was caught quoting a lady 6% but in reality she was paying over 40%!
3. Don’t feel rushed into getting finance from dealers, and don’t fall for the convenience factor. Yes, it’s handy to “speak to their guy just over there in the corner”, but generally that guy has has slicked back hair and dollar signs in his eyes. He will try to intimidate you by claiming that only he can get the finance you need approved quickly. In reality, he still needs to get approval from a bank like everyone else!
4. Keep an eye out to make sure that the price doesn’t change. The shark my client dealt with fiddled with the price on the invoice that was going to the finance company. The client would never have noticed the extra $6 a month in repayments, but thankfully apart from being a mortgage broker, I’m also a part time detective. We caught the shark out and celebrated with a huge platter of battered flake for dinner!
5. Not all car dealers are sharks. There are some good guys in the industry particularly my good mate Adam who is the dealer principal at Baycity Holden. If you’re in the market for a new Holden, give him a call and mention my name!