A car loan is a fixed term, fixed interest rate, secured loan used to purchase a new car or upgrade an old car with fixed loan repayments.
A car loan is used to fund the purchase of a new car or upgrade and old car. Once you have found the car you like or have an idea on the amount you want to spend you can apply for a pre-approval to purchase a car.
Once you have found the car you like the finance company will pay the seller using the proceeds of the loan you have been approved. You then make you weekly, fortnightly or monthly repayments until the vehicle loan is finished.
Using car finance to buy your new car instead of using cash means you can use the money you have for other things like:
Most car loans can be paid off at any time with minimal early settlement fees. Our early settlement fee is $75.
Usually the car you are purchasing will be used as security for the car loan. In some cases additional security may be asked for such as:
The main insurances offered when doing a car loan are Payment Protection Insurance (PPI), Guaranteed Asset Protection (GAP) and Mechanical Breakdown Insurance (MBI). We use Autosure to provide our customers the protection they need.
Payment Protection Insurance protects you for your repayment obligations should you suffer an insured event. What this means is the Insurance company will maintain your loan repayments or in some instances settle your loan. We offer three types of policies based on your employment as per the below table.
Death, Terminal Illness, Accident, Illness, Disability, Hospitalisation, Carer, Redundancy, Suspension, Employer Ceases Trading
Death, Terminal Illness, Accident, Illness, Disability, Hospitalisation, Carer, Business Interruption
Death, Terminal Illness, Hospitalisation, Permanent Disability
The benefits of having PPI relieving any stress you may be under should you be impacted by one of the insured events. This enables you get on with recovery or seeking new employment without having to worry about making your loan repayments.
Guaranteed Asset Protection protects you against losses that may occur when your vehicle has been written off by your insurer. How GAP works is if there is a shortfall in what the Insurance company pays and what is owing to the Finance company you GAP policy may cover the difference.
GAP does come with many other benefit’s so it is important to check your policy.
Mechanical Breakdown Insurance covers the reasonable cost to have your car repaired. Cars these days have many mechanical and electrical components and some of these can be very expensive to replace. The last thing you want when buying a car is to have it break down.
MBI helps cover some of these cost’s and has some additional benefit’s like:
Again it is important to check your policy document to see all of the cost’s and benefit’s of having a MBI policy.
Both options have pro’s and con’s and below is a list of things to look out for:
|Covered by the consumer guarantee’s act||Car dealers are often more expensive|
|Compare models and brands in one location|
|Trade in’s will be available|
|Finance can be arranged on site|
|Clear title to vehicle|
|Often cheaper than a car dealer||Not covered by the consumer Guarantee act|
|Always a large range available||How do I know the seller owns the car?|
|Is there any finance owing on the car?|
|No trade in’s|
|Have to arrange own finance|
You do get more protection when buying from a car dealer and gain access to Finance and insurance products in one location, In saying that buying privately can be a good option you just have to do a bit more work like:
Still a great option just a few more things to think about!
You can apply for a car loan with Pioneer Finance if you are:
You do need to show that you have the affordability for the loan and that you are who you say you are. You can do this by providing the following:
Depending on the security offered for the loan we may require further information such as rates notice, mortgage statement’s or proof of purchase.
Depending on the security offered we will do checks with the following registers:
Don’t worry if your credit check has a couple of bumps and bruises we may still be able to help you.
Car loans will have various fees attached, which may include:
Some of these fees will be charged to the loan upfront or are calculated in your weekly, fortnightly or monthly installments. Other fees can be charged at the end of the loan term such as early settlement fees or if you used your property as security a caveat removal fee can be charged.
For more details on our fees and charges go to our Interest rates and fees page in the important information section.
Amount Borrowed $10,000.00
Establishment Fee $395.00
Payment Protection Insurance $824.48
PPSR Fee $8.05
Total including fees and insurances $11,227.53
Interest Rate 16.95%pa
Monthly Account Fee $12.00
Loan Term 36 Months
35 Monthly repayments of $411.85 plus 1 final repayment of $411.41
The above is an example of a common loan request and gives you an indication of what the monthly loan repayments will be. Your establishment fee may be different depending on the security used and the time taken to process your application. We would also like to point out that the Payment Protection Insurance used in this quote is not compulsory.
In summary, car loans with Pioneer Finance:
If you are over the age of 18 (up to the age of 21 you may require a guarantor), a permanent resident of New Zealand, earn a regular income, and can demonstrate the ability to repay the loan, you may qualify for a vehicle loan.
We offer loans from $1,000 to $50,000 for a vehicle loan in New Zealand. The amount we lend does depend on the security offered for the loan. The more security offered the better chance we will be able to lend the amount you require. We will also need to check your affordability and credit profile.
Yes. Your credit history may not be as bad as you think. Let us do the background work and we’ll take it from there. You do need to show us that you can afford to pay the debt consolidation loan, and you will need security, and may need a guarantor.
Approval time depends on some variables:
In saying that we do endeavour to give a same day answer on all applications received.
Yes, you can make extra repayments; or you can increase your minimum repayment to help pay your loan off earlier. We do charge a small early settlement fee of $75.
Applying at multiple finance companies will no longer affect your credit rating in New Zealand. Since October 1st 2019 every credit check done by a finance company is listed as a quote with Equifax, Centrix or Illion and will only affect your credit rating should you accept the loan offer.