Car finance is a type of loan that is used to purchase a vehicle. The loan is typically repaid over a period of time, and the interest rate will vary depending on the lender. There are many different types of car finance available, so it's important to compare options before choosing a loan.
Car finance can be used to purchase both new and second-hand vehicles. It's important to note that the interest rates on car loans for second-hand vehicles may be higher than for new cars.
When taking out car finance in NZ, it's important to consider the total cost of the loan, including any fees and charges. It's also important to make sure you can afford the repayments, as missed payments can damage your credit rating.
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What are the benefits of car finance?
There are a few benefits to this arrangement:
1. You can get a lower interest rate. If you have good credit, you may be able to get a lower interest rate on your loan than you would if you were paying for the car in cash. This can save you money over the life of the loan.
2. You can spread out the cost of the car. If you're worried about affording a new car all at once, financing can help by breaking up the cost into manageable monthly payments.
3. You may be able to get extra features or accessories financed along with the car. Many dealerships offer this option, which can be helpful if you want to add something like an extended warranty or GPS system to your new car.