Types of Car Loans...
Standard bank loan
This is the simplest amongst car loans wherein a bank lends you the money to buy a new or used automobile. Typically, the car loans that banks grant are secured loans, meaning that the vehicle serves as the security for your borrowing. The lender will repossess the car if you default on loan payments. The bank will also require that the car is fully insured.
This involves a fixed loan wherein a financier advances you the money for the car purchase. The financier holds a mortgage over the vehicle as loan security. You can finance the car’s total purchase price or pay an upfront deposit or use the vehicle for a trade-in. At the end of the term, you can also make a residual payment.
In this type of lease, the financier buys the car and then leases it to you. This setup is suited for businesses and individuals who will use for business purposes the vehicle they leased. They can acquire a car with little or no capital spending and just pay fixed monthly rentals. After the lease expires they have the option to return the vehicle, buy, or refinance it.
Commercial hire purchase
Here, a financier purchases a car for a consumer to hire over a set period. This car financing can be tailor-fit for individuals and businesses. Generally, the monthly payments repay in full the loan in the set period. The vehicle is then transferred to those who hired it with all payments completed.
Take note also when seeking a car loan that some preferential options are available to Business owners with an ABN (Australian Business Number) — See ABN Car Loans.