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Five Points to Consider When Purchasing Your Next Towing Vehicle

Are you considering doing your “big lap” or “half lap” of Australia? If you’ve already got your caravan in mind and everything looks perfect, you hit one major snag: your current car or vehicle just can’t tow it. Not all is lost: your current car needs an upgrade and now is the perfect opportunity. So, what should you consider for towing vehicle car loans? What else do you need to know to get a good deal?

Requirements for the towing vehicle

Before rushing off and buying a “bigger” vehicle or a costly 4WD, you should get acquainted with the requirements for towing vehicles at your state road safety authority (here’s what the NSW site says – it’s similar, but not identical, to most other states.) It needs to have a sufficient braking system, have a maximum towing capacity that can comfortably tow the caravan or trailer taking luggage and other supplies on board, and whether the tyres can also cope with the load. Remember – you could face fines or demerit points for towing loads illegally.

Consider your budget

Now it’s time to do some back of the envelope calculations – how much can you afford each month or fortnight in repayments? Remember to factor in insurance, fuel, and maintenance. You can work out an approximate amount using a car loan calculator. You need the interest rate, loan term, and how much you want to borrow. Bill Tsouvalas, Managing Director at Savvy says that to make a more accurate estimate, you should look for comparison rates. “Comparison rates are interest rates that include most of the statutory fees and charges that come with a loan. It gives you a more complete picture of what you’ll be paying.”

Buying new vs used

Buying used is tempting as there’s a lower upfront cost. But this can cost you more in other ways: increased interest rates due to lower value, fewer safety features compared with newer models, and older cars might be in poor condition. This means more spent in maintenance, fuel, and repairs. New cars come with new car warranties and are more reliable. “Lenders will also reward you with lower interest rates compared with used cars, so keep that in mind,” Tsouvalas says.

Looking for car finance – how to save

Due to a semiconductor shortage choking supply chains, prices for new and used vehicles are higher than normal. The upside is, according to Tsouvalas, is that interest rates are at record lows. “Rates are at rock bottom, so don’t be too discouraged by high prices and wait times. Lock in a competitive rate now before they rise, and you’ll be saving on the back end instead of up front. See a broker and get as many quotes as you can before making a decision.”

Timing your buy

If you aren’t in a hurry to get out to the back of beyond, timing can affect the price. Buying at the end of financial or calendar years is your best bet, as dealers have run out deals. “Also buying at the end of the month is ideal, as dealers want to make their quotas and get their bonuses. If you have pre-approval, that is, having your car loan ready to go as soon as you buy, it gives you a price ceiling that dealers have to match if they want to sell. Use all the leverage you can – buying an in-stock car at the end of the month could net you a steal!”

Remember to consult a financial professional before taking out a finance product. Always look for a licenced dealer, broker, or lender.

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