ASSET OR LIABILITY? STRUCTURING CAR LOANS/CHEAP RATES

Is your car an asset or a liability?

Unlike houses, property, precious metal, antiques and collectibles such as artworks, very few cars actually increase in value over their lifespan. Yes there are perhaps a few exceptions in the highly rare and collectible categories. Earlier this year, car media outlets reported a restored 1972 Chevy Blazer that sold for $300,000, a 20 year old Honda Civic in Japan sold for over $100,000 and on a US auction site, a Nissan Datsun 240Z dating back to 1970 sold for over $US120,000.

Restorations can of course make money depending on how owners price the amount of time and effort they put into the work. But these are the exceptions. Your everyday drive is unlikely to increase in value over the time you own it. People don’t buy new cars as assets as such. Your car may be an asset to your life and lifestyle, but in money terms, it’s unlikely to increase in value.

So why are we talking about cars being an asset or liability? Well, we’re talking about how you purchase your car, specifically say new cars. Is the entire car and car finance package an asset to your business? Is it working with your cash flow? Is it cost-effective? Are the loan terms amenable to you achieving your financial goals? Or do you view your car finance package as a liability that is putting pressure on your cash flow?

At Jade Car Loans we are focussed on achieving our customers the most cost-effective motor vehicle finance that works for their business. Here are a few tips and industry hints on achieving a workable motor vehicle loan.

Using a Finance Broker

The first tip is a no-brainer for most savvy business operators and individual car buyers – don’t source your car loan yourself, use a finance broker. Jade Car Loans is a professional finance broker with extensive experience in the motor vehicle lending sector and we know how valuable our services can be to our customers. We consider our services an asset to both personal and business car buyers.

In handling your own finance deal you may be limited to the major banks and a handful of finance companies, most of whom are not open to negotiating on interest rates or loan terms. You meet their loan guidelines or it’s no deal. Even if you have your business transaction accounts with a bank and do other business banking, many are still not interested on budging on rates.

On the other hand, Jade Car Loans has a wider range of lenders in our network and with the large amount of motor vehicle business that we write, we have the leverage to negotiate on interest rates for our customers.

We save customers time and a lot of hassle. If you really do your due diligence and source several loan offers to compare, you could be spending a lot of time. Your Jade consultant does all that in the one process.

Source the Cheapest Interest Rates

Interest rates are at the core of a great car loan deal. Signing up to a deal at higher rates can mean you signing up to paying not only more on your monthly repayments but a significantly larger amount overall for your loan.

Comparing the value of the vehicle against the total amount of the car loan is important. Yes, initially the loan will be more than the purchase price that is value of the vehicle. But as the loan term plays out you want the amount of the loan to come more in line with the car value. So when you trade-in or sell the vehicle you don’t owe more than it’s worth. That’s the difference between an asset and a liability.

The Right Loan Type

Choosing the most appropriate commercial finance product for your business is key to your car loan working with your cash flow and towards your finance goals. Jade offers the full range of business car loan products: Chattel Mortgage, CHP, Leasing and Novated Leasing. Each offers varying benefits in regard to tax deductibility, GST treatment and accounting methods.

Speaking with your accountant to decide which is best for your business is an essential step in the process. Your Jade consultant can then proceed to get you a quote for that type of loan.

Loan Structure

The structure of your motor vehicle finance deal can be the difference between ‘asset or liability’. Establishing the loan term, balloon and repayment levels that work for you is key. Your Jade broker is highly skilled in loan structuring and negotiating with the lender to achieve the terms that you want, not just what the bank demands.

Avoid the Rush

You’re at the car dealership deciding on your car and they’re offering you a finance deal. Mmm, tempting to just sign up and get it all sorted on the spot. STOP. Not necessarily. Dealer finance can be more expensive than what we can achieve. It often includes commissions and higher fees.

Jade Car Loans acts quickly to provide quick quotes, fast approvals and prompt settlement so we won’t hold up your car buying. In fact we can expedite the process by providing you with pre-approved finance. Rushing into a loan may cost you in the long term.

Avoid ‘too good to be true’ Offers

The motor vehicle lending sector is massive, one of the largest markets in the financial services sector. There are a lot of operators including car sellers, keen to attract customers with special promotional loan offers. The ‘no deposit finance’ and ‘0% interest rate’ are two of the classics.

Very few lenders that Jade deals with, will request business car buyers pay a deposit on their finance. It does happen with ABN only and some no docs low docs and with some older vehicles, but it is the exception. So no deposit finance is quite a moot point.

When it comes to 0% interest rate deals – these are usually promotional gimmicks and either loans loaded with higher fees or the 0% is only for a short period after which a higher rate kicks in. We refer you to our web page where we explain the details.

Jade Car Loans – Your Asset in Motor Vehicle Finance

So when it comes to ensuring your car and car loan package can be considered an ‘asset’ not only to your lifestyle but to your financial situation, contact Jade Car Loans to arrange your finance.

To discuss a cost-effective motor finance deal, speak with a Jade Car Loans consultant 1300 000 003

DISCLAIMER: NO LIABILITY IS ACCEPTED BY JADE CAR LOANS IN THE PRESENTATION OF INFORMATION AS SOURCED FROM MANUFACTURER AND GOVERNMENT WEBSITES AND DOCUMENTS. THE INFORMATION IN THESE ARTICLES IS INTENDED FOR GENERAL CONSIDERATION ONLY. THE INFORMATION FROM THIRD PARTIES IS SOURCED VIA THE PUBLIC DOMAIN IN MANY INSTANCES AND NO LIABILITY IS ACCEPTED FOR MISREPRESNTATION OR ERRORS. READERS ARE ADVISED TO CHECK SPECIFICATIONS WHERE NECESSARY. FOR FINANCIAL ADVICE ON YOUR SPECIFIC FINANCIAL SITUATION AND TO MAKE DECISIONS AROUND FINANCE, ALL PERSONS ARE STRONGLY RECOMMENDED TO CONSULT WITH THEIR ACCOUNTANT OR THEIR FINANCIAL ADVISOR.

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