Finance Terms Explained

Hire Purchase - A hire purchase operates in a similar way to a chattel mortgage except that title in the goods does not pass to you untill the completion of the loan term. Like a Chattel Mortgage, this type of finance usually allows for interest and depreciation to be claimed as a tax deduction. A balloon type repayment can be used to reduct your repayments.

Deposit - A deposit is sometimes required when obtaining a loan. It is an upfront payment to the vendor or car dealership but can also be in the form of a trade-in of an older vehicle.

Novated Lease - A novated lease is used primarially for the purchase of motor vehicles. In order for a novated lease to be of use, your employer must have a functional novated lease program in place. A novated lease requires your employer to make the repayments on the car finance for you, but the ownership of the vehicle rests in yourself.  Ask us if you are interested in a Novated Lease.

Insurance - Car insurance provides a way to minimise your risk in your motor vehicle in the event of sickness, accident, damage or unemployment. What is becoming more popular recently is loan insurance. Consider a single person accident or a stolen vehicle that is not recovered. Most comprehensive insurance policies do not cover this type of loss, leaving you to make each and every repayment for the rest of the term of the loan. Or even if the insurance company did agree to pay, it is often alot less then what you owe on your car loan. A GAP insurance policy covers this gap, and provides your with money to go shopping for a new vehicle. This is the kind of support you will need in the unfortunate and stressfull occurance of losing your vehicle and having no means to get around  and to get to work. CCI insurance covers unforseen circumstances which affect your ability to pay a loan, including sickness death and unemployement. Ask a qualified insuance consultant about these insurance options to help better protect you for the future.

Baloon - A balloon repayment is a lump sum payment that falls due at the end of your car loan. The advantage of a balloon is that it reduces your weekly repayments, which provides the benefits of increased cash flow during the life of your loan or the ability to finance a more expensive vehicle for the same fortnightly repayments. Balloons are not available in all circumstances and it depends on the type of loan and the credit history of the applicant. You need to specify the amount of balloon repayment before you apply for your loan. Additionally, Balloons are not limited to car loans, in fact almost all types of loans are capable of featuring a balloon.