Factory finance

Car manufacturers also offer finance and lease deals. Audi has just launched a finance deal for its new A1 hatchback that packages the price of the car, servicing and insurance into a weekly payment starting from $169.

The negative is you don’t own the car at the end of the agreement, so you have to make a one-off balloon payment or hand the car back.

There are also more traditional loans on offer. Toyota Australia, for instance, has a special rate of just 2.9 per cent for “approved private buyers and certain ABN [Australian Business Number] holders” on its Yaris and Corolla models. It is, in effect, a discount wrapped up as finance.

The four-year loans are on offer until January 31 and buyers can lower their repayments even further by making a final “balloon” payment of up to 40 per cent at the end of the four years.

Fornasaro advises analysing such deals carefully. “Sometimes they’re really good and sometimes they have all sorts of conditions attached,” he says. “You could even go to someone else and say, ‘How much could you do this car for me per month?’

“I’d rather pay $5000 less and get my own finance than pay $5000 more to get 2.9 per cent. You should negotiate the price of the car first, then worry about the finance.”

Good for People not wedded to a particular model.

Pros You get a new car with low monthly repayments; the manufacturer moves surplus stock.

Cons You may have a lump sum to pay at the end and models are restricted.

Tip Shop around for a discount on price that could outweigh the interest-rate saving.

However, if you have your eye on a certain make and model that isn’t covered under factory finance, give us a call on 1300 547 226 or fill out our online application form to find out just how low your repayments could be!