Under this finance option the vehicle is used as security over the loan. Generally with this type of loan there is no balloon payment at the end of the term.
Benefits:
Fixed payments and interest rates provides certainty in a rising interest rate market
As there is no balloon payment you are paying off a greater principle component of the loan each month. This reduces the amount of interest paid (although repayments may be higher due to the additional principle repayments)
You do not pay GST on the loan or the repayments
Considerations:
The full cost of maintaining the vehicle is your responsibility
Disclaimer: The above is a generic representation only. It does not constitute financial advice or mortgage structuring advice. It is only to be used as a guide only. Please discuss your financial needs with a financial planner, accountant or your banking representative.
No reliance should be placed on the above information.
