While it may have started out as a social club for motoring enthusiasts back in the early 1900s, RACV is so much more than that today.
Over the years, RACV has campaigned for road safety, while working within the community, developing to provide a number of essential services for drivers. Perhaps one of the best known of which is emergency roadside assistance.
Today, RACV has more than 2.1 million members, offering them services that range from insurance and financing, to investments and roadside assistance, while even giving them somewhere to holiday, at its RACV resorts across Australia.
Working as a mutual, RACV is run to benefit its members. Unlike an organisation that’s run to benefit shareholders, RACV can focus on its members first and foremost, providing them with excellent value and excellent products.
Why choose a mutual?
There are several reasons why you may want to choose a mutual. Without having to think of shareholders’ profits, a mutual can invest those profits back into the organisation. This can mean lower costs for members, with a closer emphasis on value and service.
If you’re thinking of applying for a car loan, you may find that a mutual can offer lower interest rates and lower fees. This could help you to save a significant amount of money over the life of the loan.
Many members of mutuals also point to the service they receive as a reason for choosing a mutual. Mutuals can also play a strong role in the community, giving back where other organisations perhaps do not.
Interested? Let’s take a look to see whether RACV is the mutual for you.
When applying for a car loan, one of the first things many applicants think of is the cost. That means thinking about how much the car loan will cost in repayments, as well as how much it will cost overall.
One of the most influential factors on the cost of the loan is the interest that’s applied to it. Like many mutuals, RACV offers a relatively low rate of interest on its fixed rate car loan. That allows car buyers to borrow from $15,000 at a fixed rate, over a period of one to seven years.
Is a fixed rate car loan a better option than a variable rate car loan? The type of car loan you apply for will depend on what you want to get out of the loan.
With a fixed rate car loan, you may find that the rate of interest applied to the loan is lower than that of a variable rate car loan. You can also benefit from the peace of mind that the interest rate on your car loan will remain the same through the life of the loan.
This can make budgeting much easier, as you will always know how much your repayments will be. It can also protect you from interest rate rises that can affect variable rate loans, but you also won’t benefit from lower repayments if interest rates happen to fall.
You may also find that variable rate loans offer slightly more flexibility than fixed rate loans – although this flexibility does depend on the lender. Some variable rate loans allow borrowers to make extra repayments, with a redraw facility available.
If that kind of flexibility is important, be sure to choose a loan that offers those features. However, keep an eye out for fees, thinking about how much money it will actually save you over the life of the loan.
Secured or Unsecured?
RACV offers a secured car loan, which means the vehicle you buy will be used as security against the loan. The can often be a more affordable option than an unsecured loan, as lenders tend to offer lower rates of interest on their secured loans.
Looking at Fees
While the rate of interest on your loan will greatly affect its overall cost, you should also take into account fees when comparing the loan’s affordability. Most lenders charge some kind of establishment fee, as a one-off fee that car buyers must pay when the loan is taken out.
RACV is no different, it has an application fee that you must pay on the loan. However, unlike many other lenders that charge a monthly service fee on their loans, RACV has no ongoing fees for car buyers to worry about.
Still, it’s always worth checking out the fine print to find out whether any other fees might apply, before signing on that dotted line.
Features and Benefits
If you are approved for an RACV car loan, you automatically become an RACV member. This can provide you with a range of member benefits, including savings on other RACV products, such as car insurance and roadside assistance.
If you are eligible for RACV’s Years of Membership Benefits, you may also benefit from lower interest repayments.
On top of that, RACV offers a best deal guarantee on its car loans. That means, if you are not completely satisfied with your car loan within 21 days of approval, you can repay the borrowed amount and RACV will cancel your loan without penalty.