Low interest deals: do they really save you money?

Paul is looking to buy a new car and is taken aback by some of the incredible low interest deals available, but he’s wondering if there’s a catch.

Q. Paul

I’m in the market for a new car and some of the deals which are around seem quite amazing. How can car dealers offer rates as low as two per cent when banks charge so much more? Are these deals worth it or should I be wary?

A. There are some great looking deals around at the moment, but as with everything, you need to read the small print before you sign on the dotted line.

If car dealers are offering a low interest rate, it may be because they are making money somewhere else. You’re less likely to be able to negotiate a deal with such an offer and may end up paying full dealer delivery fees and manufacturer’s recommended retail price. Also, these low interest rates are usually only available on shorter repayment terms, so the monthly repayments may be quite steep.

While banks may be charging higher interest rates, if you have the money in your pocket so to speak, you can usually grab yourself a good deal. A reduction in price, included servicing and optional extras are all up for offer if you’re in a strong bargaining position. 

The best way to decide if a low interest rate deal is right for you is to use an online comparison tool. This way the bottom line will be clear and you won’t be caught out.

Try the following comparison tools at Drive.com.au

Written by Debbie McTaggart



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