Car Finance Calculator NZ
Car Finance Calculator NZ
- Car finance calculator
- How to get the lowest car loan interest rate
- Do I need a deposit for car finance?
- How does the length of the loan affect my car finance agreement?
Use our free car finance calculator to see what your monthly repayments will be. Try different interest rates to see what you can afford.
Please be aware this car finance calculator is an estimate only. Lenders may have additional fees and add-ons that would need to be added to your repayment amounts you calculate below to provide a more accurate repayment estimate.
How to get the lowest car loan interest rate
Securing a low car loan interest rate mainly depends on your affordability which is your income minus your expenses. Your credit history will also be a key factor in determining your interest rate.
To give yourself the best chance of securing a low interest rate make sure you’ve got your debts in order prior to applying for car finance. Have credit cards paid off, have 3 months of bank statements that show you are financially responsible and have enough disposable income to cover your car repayments. Check your credit history and make sure your record is as good as it can be, there’s no outstanding debt or errors on your record. If there are errors you can dispute them.
If you have a deposit, this will help show your money management as well and lower the risk to the car finance lender. If you don’ have a deposit, start saving and apply in 3-6 months time when you are in a better financial position.
Do I need a deposit for car finance?
There are lenders that offer no deposit car finance in New Zealand. There are some important things to note however if you choose to purchase a new car on finance in NZ with no deposit.
The total amount of your loan will be larger with no deposit so you will end up paying your loan off over a longer period unless you choose a higher repayment option when setting up your car finance agreement.
Also, with a larger loan amount your interest paid over time will increase so you will pay more interest while repaying your loan amount.
Having no deposit does not give the lender a positive view of your personal money management. You want the lender to see you as a low risk however if you don’t have a deposit how can the lender tell if you are someone who can save money?
Compare Car Finance recommend applying for car finance with a deposit as this can help you secure a better car finance interest rate as well as save you paying off a larger loan over a longer period.
How does the length of the loan affect my car finance agreement?
The longer your car finance repayment period, the greater amount of interest you will repay over that time. It is important to consider the car finance agreement period that is going to make the repayments affordable for your situation and keep the total amount paid to a minimum as well.
For example a $15,000 loan at 7.95% for 12 months will mean your total loan repayment comes to $15,653 for the year. So you are only paying $653 in interest which is great, however your monthly repayments would be $1,304 – which for some people, isn’t so great!
A $15,000 loan at 7.95% for 24 months will mean your total loan repayment comes to $16,273 which is a little more than the above example. However, your monthly payments come down to $678 which is a bit easier on the wallet monthly.
Lets look at a $15,000 loan for 36 months at 7.95% which comes to a total of $16,909, with monthly repayments of $469.
Which repayment plan suits you better? Most lenders will loan up to 5 years so consider your options and figure out a plan that works best for your financial situation.
A longer loan repayment period that gives you a bit more room on the monthly repayments in case you have unexpected bills, but not too long that you’re paying off a huge amount of interest is the best way to go.
Everyone’s financial situation is different so it is important to make the right decision here, even if that decision is to not proceed with car finance.
Read More: 10 tips when buying a car on finance
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New Zealand Car Finance Providers
Get car finance quotes from multiple lenders and compare your interest rates. Your quotes from these lenders won’t affect your credit score so shop around and find the best rate for your financial situation