With so many different providers and finance options to consider, choosing a car loan is often as hard as choosing the actual car. While it might seem straightforward at first glance – find a car loan with the best interest rate and apply for it – the process of getting the best car finance often means asking a lot more questions.
First, you have to consider what type of car loan to get. Do you need a used car loan, a new car loan, or a car loan for bad credit? What about fixed and variable car finance options?
Then there are things like balloon payments, monthly fees, additional repayments and early exit costs to consider. With CommSec data showing the car market is at it’s most competitive in 38 years, lenders are becoming more and more competitive with one another.
The result is a range of car loans that often seem identical until you get down to the fine print. Even then, choosing between loans could just come down to the smallest of choices.
But some lenders have decided to entice us with features that go above and beyond the norm. Think frequent flyer points for signing up to a car loan, or free vehicle inspections before you buy your next car.
These kinds of extras could be the deciding factor for many people, particularly when interest rates and other fees are similar between loans. So to help you figure out what kind of car loan features you really want, here we take a look at the best car loan extras you can look for.
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- Qantas Frequent Flyer points
- Car sourcing service
- Free vehicle inspections
- Free window tinting
- GAP insurance
Before looking at these complementary extras, it is important to acknowledge that the features of loans change with the market. That also means that some of the features and products outlined here could be different to what’s offered in a year’s time (or even a few months from now).
But regardless of whether or not the specific extras outlined here are available, they can be used as a benchmark for the kind of features you want from your car loan.
Who knows? You may even be able to use them to negotiate a better deal with lenders, or find a car loan expert to help you get the best possible option for you. So without further ado, let’s look at what is out there in the way of car loan extras in 2014.
Qantas Frequent Flyer points
It’s a dream for frequent flyer members the world over: getting points for the biggest purchases you make. Cars definitely fall into that category, and Qantas has made it a possibility to earn points for its Frequent Flyer program when you buy a car.
The Qantas Credit Union has a Qantas Points Car Loan that gives you 1000 Qantas Frequent Flyer points for every $1000 put towards the loan each year. According to Qantas Credit Union, you would earn 132,997 points on a five-year loan of $38,000.
“Plus, you’ll receive your Qantas Points monthly, so you can save them up for your dream holiday overseas, or use them to travel to more local destinations,” the lender says.
Loan amounts actually start from a modest $15,000 and are available for cars, caravans, motorbikes and boats for up to five years, with interest rates starting from 8.99% p.a. and no upfront fees.
While this loan is exclusive to Qantas Credit Union customers, anyone can become a member. Plus, if you don’t already have a Qantas Frequent Flyer membership, the credit union can waive the fees of signing up – so you could start earning a lot more Frequent Flyer points if you choose this loan.
But it’s not just Qantas’s own credit union that offers Frequent Flyer points: Macquarie Bank also has car loan options linked to the airline’s rewards program.
“Earning Qantas Points with a Macquarie car loan is simple,” the bank says.
“Every dollar counts, and your points are available as soon as you settle your car loan.”
With a Macquarie Bank car loan, you earn one point per $1 spent up to a maximum of 100,000 points. So while the Qantas Credit Union option has a higher points limit for its car loans, it is good to know there is another lender out there already offering Frequent Flyer points with its car loans.
Plus, there is a chance that other lenders will have similar deals in the future. Qantas already partners with other financial institutions to offer points for credit cards and even an everyday bank account, so it could just be a matter of time before getting points for paying off your car loan is a more common thing.
Car sourcing service
If you want a used car there are all kinds of places you can find them. But it takes a lot of time to search through the rows of vehicles as a used car sales centre, and even longer to go through the cars listed in the paper or online.
That’s where this car loan extra could come in handy. Some used car loans providers, such as the ones offered by Northern Beaches Credit Union and Macquarie Bank also offer a car sourcing service. That means the lender pays for someone else to find the best used cars based on what you want, so that you can choose the right one in a short amount of time.
Just as some loan comparison services can negotiate the best rates for you, there are also car sourcing services that can get the prices down on your behalf. Taking advantage of this service through your car loan provider also streamlines the whole process.
As Northern Beaches Credit Union puts it: “It’s a complete service that will save you time and money, whilst at the same time help reduce the risk of buying a lemon.”
But before jumping on the car sourcing service bandwagon with a particular lender, make sure you check the fine print. While some car loan companies offer car sourcing as a complimentary extra, others charge money for the service. So just remember to check with any lenders promising you this option to make sure it is worth your while in the long run.
Free vehicle inspections
Another great complimentary extra if you’re looking for a used car, free vehicle inspections help you make sure you know more about the vehicle you want to buy. These kinds of inspections reduce the chances of nasty surprises down the road, with some of the key features covered including:
- Doors and locks
- Engine performance
- Steering and suspension
- Fluid levels
A thorough vehicle inspection means that you will know exactly what kind of condition the car is in when you buy it, which is why they are recommended whether you are getting a loan or financing it on your own.
But vehicle inspections can be incredibly expensive, especially if you have to pay for a number of different inspections before finding the right car.
The NRMA’s vehicle inspection service, for example, costs $319 for non-members and $299 for members when the car is brought into a service centre. The mobile inspection service, on the other hand, costs $289 and $269 for non-members and members respectively.
That’s what makes it such a great complimentary extra for used car loans. Getting the vehicle inspection free as part of your car loan means that both you and the lender will be on the same page with your car. It also means you will have a better idea of whether or not the price is right and can develop a more accurate budget for car maintenance.
Free window tinting
Paying for extras on a car – whether new or used – can add a lot of money to the total cost. Window tinting, specifically, costs hundreds of dollars when done professionally.
While not an essential element for cars, window tinting can help reduce glare, keep the interior cooler when parked or on the road, reduce the chance of sunburn for drivers and passengers and help the air conditioning system run more efficiently.
According to Windowtint.com.au, a high-quality, professionally installed car window film costs around $500 to $700 with a lifetime warranty. But paying that much for a non-essential element might not be something you want to do when you’re already spending thousands (or tens of thousands) on getting the car.
That’s when it could be handy to look for car loans that offer free window tinting. RACQ, for example, ran a promotion in 2014 where new car loan customers who signed up between August and September could get complimentary window tinting on the vehicle with which the loan was taken out.
Newtown Toyota, on the other hand, has window tinting listed as a service, but does not outline specific costs. So while some lenders will offer this kind of feature free of charge, others will add the cost onto your loan, which makes it even more important to check the conditions before signing up for car finance.
If your vehicle is written off and your insurance doesn’t cover the costs, you could end up paying off your car loan without a car to show for it. Guaranteed Asset Protection (GAP) insurance – or “finance gap insurance” – is a type of cover that protects you from this scenario.
“If your new vehicle becomes a total loss, there may be a ‘gap’ between the amount your comprehensive insurer pays you and the outstanding balance on your vehicle finance contract,” Toyota explains on its finance website.
“You may also incur extra costs associated with the purchase of your replacement vehicle. In these circumstances [GAP Insurance] helps to protect you from significant financial loss and personal inconvenience.”
This kind of insurance provides up to $30,000 for the difference between what your comprehensive insurer pays you and the amount owed to your car loan provider, so it is worth looking into when you are buying a new car.
While you can take out GAP insurance at any time, some car loans come with it as a complimentary extra. In fact, RAC says this is one of the most important things to ask lenders about when you are looking for a car loan.’’
“Be sure to ask if your loan repayment amount has extras included, such as credit protection and gap insurance, should you be unable to work or your vehicle is written off,” RAC says. “When comparing loans, you need to make sure you’re making a fair comparison.”
There are all kinds of features to consider when you are looking at cars and car loan options. While interest rates and fees are top priority, it is also important to realise that there are many other elements that can tip the value of a car loan in your favour.
By reading up on the best car loan extras out there, you should be able to figure out what loans appeal to you the most and what loans have the best value. That way you can make a more informed decision about the type of car loan you want and focus on options that tick most, or all, of those options.