Car dealers and lease brokers are anxious as a result of GE Money's withdrawal from the Australian car finance market. Only in September GE Money was reassuring business partners that it was here for the long term was funded for 2008
and had liquidity at competitive rates. This all went out the window recently when GE Money announced that it was withdrawing from the car finance markets in Australia and New Zealand. GE Money claims that the cost of funding car finance has become too expensive due to the world wide global credit crisis so it can no longer fund car finance Downunder.
This is going to have a huge impact on car finance and car purchases as it is likely that henceforth new vehicle buyers may well have to contribute a deposit towards the car rather than relying on 100% car finance as has been the norm over the past decade or so in Australia. Already consumers are seeing the benefit of this crisis in the reduced cost of cars. Because car finance has been harder to come by, dealerships are well below their targets and as a result have gone into sale mode.
So what is one to expect when looking for car finance today? The reality is that with GE Money out of the car finance market there is going to be demand on other car finance players to fund the purchase of new vehicles. In Australia there are a number of car finance lenders but probably your best option is to contact you mortgage broker (mortgage brokers invariable also offer car finance for customers as well so make sure you give a mortgage broker a call) or a lease broker either way you will then have experts working for you to secure competitive car finance for you. A mortgage broker will have access to a wide range of car finance lenders and will be able to recommend the best options in car finance for you. Dealerships usually have a car finance representative on the yard but in my experience while it is worthwhile discussing your car finance needs with the car finance rep at the dealership, more often than not you will get better car finance terms if you arrange your car finance through a mortgage broker or lease broker. They are on the ball with any car finance specials that might be available and invariably you will save money by using a car finance broker. As a general rule your car finance will cost no more than if you were dealing direct the car finance lender pays a commission to the mortgage broker for the work he does in sourcing the business and putting the car finance application together.
Another advantage of dealer with a mortgage broker when sourcing car finance is that they are often able to negotiate a better price than you for the car you want to purchase. Car dealerships receive bonuses from the manufacturers when they reach a certain sales volumes. The mortgage broker not only knows who is in the market with the best car finance but also is often aware of those dealerships who are close to achieving their sales volume and for whom the sale of just one of two more cars is critical. When these circumstances arise the dealership is often prepared to discount the price of the new car because by making that sale the dealership qualifies for a significant monetary bonus. There is no way that you as a consumer will be aware of these factors but who ever you are seeking your car finance through may well be in the know.
Not only do you get a good car finance package but you just might save 00 on your new car purchase price.