Goulburn Post

Debunking 4 common misconceptions about car finance

Driva allows car shoppers to compare interest rates from 30 different lenders, and gain pre-approval in a matter of minutes. Photo: Shutterstock.

This is branded content for Driva

There are a lot of common misconceptions when it comes to getting car finance, and if you've never taken out a loan before it can be easy to get tripped up by these. Today we're debunking four of the most common misconceptions when it comes to car finance, so you can be as informed as possible before taking out a loan.

You need to spend hours shopping around

The first misconception is that you need to spend hours shopping around in order to get a great rate. But the reality is, you don't. This might seem a bit counterintuitive if you're after the best deal, so allow us to explain. Instead of spending hours searching the internet or driving around to dealerships to get dealer finance quotes, you can save yourself plenty of time (and stress!) by using a comparison website.

When you use a service like Driva, you're able to compare your best-personalised loan options from a panel of more than 30 lenders, so you can be confident that you're getting the best rate. Best of all, getting pre-approved takes less than a minute, and won't impact your credit score in any way - win!

Car loans can only be used for brand new cars

Many people think that you can only get a loan for a brand new car, but this isn't true. Whether you're buying your car brand new from the dealership, used from a private seller or even at an auction, you can get finance for it.

If your car is relatively new (ie: 2014 or later), you'll likely be eligible for a secured loan, while if it's a bit older you might end up with an unsecured loan.

You can only receive a car loan from a dealership

Another common misconception is that you can only get car finance through a dealership. While dealer finance can be a great option for some drivers, it's normally only available for brand-new cars. Also, you won't have the ability to shop around for your best loan options, meaning you might miss out on a better deal elsewhere.

There are so many different types of lenders on the market, from neo-lenders to traditional lenders like major banks, so no matter your personal circumstances, there's likely a lender that works for you!

Whichever finance option you choose, the important thing is to make sure you take the time to fully understand all of the fees and conditions associated with the loan. Take your time and definitely don't feel pressured to rush into a finance agreement!

You cannot get an auto loan with bad credit

While you might find it a bit harder to get a loan with bad credit, it's definitely not impossible. Every lender will have different eligibility requirements and lending criteria, so even if you don't have the best credit score, there may be loan options available for you. When you get your personalised rates with Driva, they'll let you know which lenders you're eligible for a loan with given your current credit score.

Keep in mind that the lower your credit score, the higher the interest rate you'll likely end up paying.

If you haven't already checked your credit score, you can contact a credit agency like Equifax to see your full credit history and understand why your score is the way it is.

So there you have it, four of the most common misconceptions about car finance debunked! If you're ready to get your personalised car finance quotes, simply head to driva.com.au to compare your best loan options in less than a minute.

This is branded content for Driva