Arrange your finance before you buy a car.

June 26, 2019

This so you know exactly how much you have to spend and what your payments will be.

It’s important to choose the finance option that best fits for your circumstances.

If you do this before you go car shopping you will avoid being pressured into accepting a loan that may not be appropriate for your circumstances.

A finance preapproval is a great option.

You may have credit issues that mean you need to pay a higher interest rate, you may have great credit that entitles you to a very low rate that the dealer seller the car can’t match or you may not be approved for a loan at all.

It is much better to find these things out before you arrive at a car dealership.

Things to note when considering finance

  • Do not sign a contract to buy a new or used car with just: “subject to finance”.
  • This entitles the dealer to try and get you finance, and it does not specify an interest rate or an amount.
  • If the sale is subject to finance: write this clause clearly on the contract to buy “Subject to finance to suit the purchaser.” Another version of this is “subject to the purchaser obtaining finance from (name financial institution of choice) by (insert date to obtain finance by) and at an interest rate of no more than (insert rate you are prepared to pay).
  • If the dealer offers to arrange finance for you, do your homework to see how it compares with other options.
  • Check if the dealer has any special finance rates. Usually applicable to new cars.
  • These are often subsidised by the manufacturer. Please note that you may be unable to negotiate on the purchase price of the vehicle.
  • You should always read your loan documents before signing the.


  • Dealers often request a deposit to show that you are serious about purchasing the car.
  • Depending on your finance the financier may request that you pay a deposit to reduce the amount financed and to reduce their risk.
  • Do not pay a deposit or complete any paperwork if you are unsure about completing the purchase.

In some states there is a cooling off period.

If you decide not to purchase the vehicle within the cooling-off period, the car dealer may retain up to $100 of the deposit and must refund the balance to you.

This does not apply in Western Australia. There is no cooling off period in Western Australia.

  • If buying privately do not pay a deposit until your finance has been approved and you have completed your checks to ensure that there is no money owing on the vehicle.
  • Make sure you get a receipt if you do pay a deposit.