Quite simply, new cars are less risk to a financier. They are less likely to breakdown and are more often than not, sold with manufacturer warranties.
As a first time borrower with no credit history, you’re seen as high risk to the financiers, than someone who has a demonstrated credit history. Therefore, buy a small new car to ensure a lower rate and increase your likeliness of approval.
This demonstrates your ability to live within your means as at the end of each pay cycle, you have money left over.
If you don’t work out how much you can afford you may end up committing to a car which you cannot afford, use an online calculator such as: www.carloans.com.au to work out the maximum you can spend.
When people purchase a car privately, dealerships aren’t there to offer you finance so you’re left with your bank. Most banks will sell you an unsecured personal loan as opposed to a secured car loan. As the loan is unsecured, the interest rate will most likely be higher.
Unsecured loans will allow you to continuously redraw on the loan once you have paid some back as well as make lump sum payments, whereas a secured car loan has fixed repayments for the term. Secured car loans will often occur penalties for paying out early where as an unsecured personal loan will not.