The Fine Print
Friday, 24 February 2012 07:00
Everywhere you turn, you get offers either for cars or for loans or for both. They’re in the newspaper, in magazines, on the radio, on TV and on billboards – and even on the community noticeboards at the local supermarket. If you’re on the hunt for a new car and need a bit of finance, then it can all be a bit overwhelming. Every single ad sounds like such a good deal. However, every single ad has fine print hiding underneath the large banner that sounds so attractive. What do you choose?
Let’s have a little look at random at some of these car loan deals and unpack them a bit, both the big hits-your-eye bit and the small print underneath. These have been taken more or less at random from an old newspaper but with the names of the dealers and companies removed to protect the innocent and the guilty!
1 0% 50 50. The “no interest” bit looks great to many people, but the fine print explains what the 50 50 bit means. It means you have to pay half of the new car price (and the ad featured brand new prestige European models) straight away and the other half 12 months later. Great if you have been good about saving up for that first 50% and if you are in a position to scrape the other half together in just 365 days.
2 Just $XXX per week. Looks manageable but when you look down the bottom of the page, you see that you need a 20% deposit and the term of the loan is for 48 months. And the amount includes loan protection insurance/cover. If you can get that 20% deposit, well and good. At least the ad is up-front about what you’re going to be forking over each week. This is a very common type of ad for car finance and the actual details in the small print vary from company to company, so read it carefully.
3 Purchase today with 3% interest rate. A lovely low interest rate, sure, but the fine print says that you need a 30% deposit and the longest you can have the loan for is 36 months. You’ve also got a loan establishment fee. And you don’t know what your monthly repayment amount will be.
4 8.9% finance on any new or used XXXXX. This ad didn’t have any small print apart from the usual “XXXX lending criteria apply”. There’s no mention of deposit amounts or loan terms, so it would pay to ask a few questions here.
5 Free insurance for 12 months with finance. The small print didn’t say much apart from the fact that the offer was only for private buyers and small business operators and you couldn’t get this if you were buying a company fleet. And you had to be over 21. However, this was just a small part of the full-page ad, and individual vehicles in the ad had the “just $XXX a week” banner (see above).
And if you find it all too confusing, just ask us to do the hard work for you sorting through all the myriads of loan companies!
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