The number of Australians failing to keep up with their car loans will continue to rise, with those living in regional centres most likely to fall behind on their payments. A November report by Moody’s Investor Services found the average 30-day or more delinquency rate increased 1.18% in the year to September 30. “We expect delinquencies and defaults to increase moderately through the remainder of 2016 and in 2017, in particular in regions exposed to the slowdown in the mining sector,” says Alena Chen, Moody’s vice-president and senior analyst.
New-car sales in Western Australia have declined by more than 10% in the past two years. Roy Morgan research released last week showed the number of Australians intending to buy a new car within the next 12 months has fallen since the start of the year.
Amanda Varidel, Managing Director, says that while a car purchase is exciting (I should know as I recent purchased a new car myself), buyers should take steps to protect their finances and not end up as a statistic. Amanda said that “There is plenty of jargon around when it comes to the finance options with cars. It is important that you understand the terms of the contract you are getting yourself into. Is it a personal loan, hire purchase, or lease agreement?”
Amanda suggests that “you should shop around for the best loan, negotiate on prices and consider the tax implications of the purchase.”
Amanda Top Tips:
· Understand your cash flow to ensure you can afford the repayments over time. Consider the option of salary packaging which could provide tax benefits and balance out the running costs if you are a high income earner.
· Download the ‘Money Smart Cars App’ put together by ASIC, with tips and traps when buying a car.
· Take your time with the process. Don’t get caught up in the excitement of the sales experience.
· Shop around for the right loan and get the best deal on interest rates by using our services. We will get you a better deal!
· Understand the type of loan you are getting into, including fees and balloon payments at the end of the term.
· Delay the purchase to pay cash or a larger deposit to borrow less and make the long term cost more affordable.
· Seek out advice we are more than happy to assist in your journey.
Disclaimer
This information is current as at 09/03/17. This article has been prepared by Heart1Stop, a social media brand owned by Heart Mortgage Services and Heart Financial Advisers. The information contained in this article is an overview or summary only and it should not be considered a comprehensive statement on any matter nor relied upon as such. The views expressed here are not those of Heart1stop, Heart Mortgage Services, Heart Financial Advisers, shareholders, directors or staff and associated contractors and business associates. This article has been prepared without taking into account any person’s objectives, financial situation or needs. Because of this, you should, before acting on any information contained in this article, consider its appropriateness, having regard to your objectives, financial situation or needs. Any taxation information contained in this article is a general statement and should only be used as a guide. It does not constitute taxation advice and is based on current laws and their interpretation. Each individual’s situation may differ, and you should seek independent professional taxation advice on any taxation matters. While the information contained in this article may contain or be based on information obtained from sources believed to be reliable, it may not have been independently verified. Where information contained in this publication contains material provided directly by third parties it is given in good faith and has been derived from sources believed to be accurate at its issue date. It is not the intention of Heart1Stop or Heart Mortgage Services and Heart Financial Advisers that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. To the maximum extent permitted by law: no guarantee, representation or warranty is given that any information or advice in this publication is complete, accurate, up to date or fit for any purpose; and no party of Heart1Stop or associated entities as mentioned is in any way liable to you (including for negligence) in respect of any reliance upon such information. This article may also contain links to websites operated by third parties ("Third Parties") who are not related to Heart1Stop. These links are provided for convenience only and do not represent any endorsement or approval by us.
