If you’re looking to borrow money to buy your Honda, there are a variety of loan options available for both new and used cars, so you don’t have to always settle for dealer finance. Making a comparison on RateCity will allow you to look at different types of Honda car finance and decide which interest rates, fees, charges, features and benefits may best suit your needs.
If you factor the following details into your car loan comparison, you’ll likely be better equipped to work out which car loan best suits your needs.
1. Interest rates
Comparing interest rates tends to be an important first step in comparing loans. Be sure to take note of both the advertised rate and the comparison rate.
2. Fees
Car loan fees can often significantly impact how much money you have to pay out over the life of your loan. Some examples of the types of fees you could be charged include application fees, monthly fees, other ongoing fees early exit fees and redraw fees. Different lenders will generally charge different fees to boost their bottom line, so it can be a good idea to ask about all of them.
3. Features
Car loans can vary quite a bit in terms of what they offer. It’s a good idea to consider asking about all of a loan’s features, as they can affect how much you will need to pay over the life of your loan. Some of these features include:
- Fixed or variable interest rates
- Additional payments
- Redraw facilities
- Pre-approval
4. Loan term
Some lenders are very flexible in how much time they’ll give you to pay off the loan, while others will limit your options.
5. Loan type
Some lenders will allow you to choose between a secured car loan and an unsecured car loan. Lenders will typically charge higher interest rates for unsecured car loans because they regard them as riskier than secured car loans. Securing your loan with your new Honda could allow you to access more competitive interest rates.
6. The lender
Consider the lender’s reputation and customer services offerings before applying for your Honda car finance.
What types of Honda car finance are available?
There are a number of different options on the market when it comes to Honda car finance, each of which meet specific requirements. Generally speaking, there are seven different ways to finance your Honda:
- Unsecured Car Loans: car finance where you don’t provide collateral
- Secured Car Loans: car finance where you do provide collateral, usually the car you are purchasing
- Chattel Mortgage: a specialist car finance option specifically for business finance use
- Operating Lease: more like a long-term car rental arrangement, involving a company leasing a car for an extended period
- Commercial Hire Purchase: closer to a rent-to-buy arrangement, generally involving a finance company buying a car on your behalf and letting you use it in return for regular rental payments. After a number of payments, you may own the car
- Car Finance Lease: similar to a commercial hire purchase, but with more options. You rent the vehicle for a set period and at the end of the lease, you either return the car or buy it
- Novated Lease: like a car lease, but with a more complicated ownership structure, as you acquire the car from a second party (usually an employer) which in turn leases it from a third party (a finance company)
How much can I borrow to finance my Honda?
In order to determine your borrowing power – or how much money you can borrow – lenders will typically assess your income, spending habits and credit score. Before you apply for a loan, it’s a good idea to work out the amount that fits comfortably into your personal budget.
To make this simple, you might like to consider using RateCity’s Car Loan Calculator to get an estimate of what your Honda car finance repayments might look like depending on your loan amount, preferred loan term and potential interest rate.
Having a clear understanding of what car you want to buy can make this even easier, as you can enter the cost of the car straight into the ‘I’d like to borrow’ field. The calculator can also give you an idea of how much total interest you might pay over the life of the loan.
For information and advice specific to your personal financial situation, consider talking to a financial advisor.
