About Advice > Auto loans

Before you sign up for a car loan.

Before you sign up for a car loan, make sure you understand:

• The type of loan on offer;
• All fees and interest rates, including insurance requirements;
• Monthly repayments and interest dates; and;
• The total amount you'll have to pay by the end of the loan period.

Find the best deal to suit your budget and requirements. Most car traders offer finance, but you can often do better by approaching credit unions, banks and finance companies directly. Only commit yourself to what you can comfortably repay.

What If I Can't Make The Repayments?
If you lose your job or become too sick to work, Optional Consumer Credit or Loan Protection Insurance can cover repayments, but it is expensive. Consider whether it is worthwhile in your case.

If you fail to repay the loan, your security deposit will most likely become the property of the lender. If the car itself is the security, it can be repossessed and sold for less than what you owe on it. You can end up owing money on a car you no longer own.

What Are My Rights And Responsibilities?
Credit providers must tell you what your rights and responsibilities are under the Consumer Credit Code . They must include all relevant information including interest rates, fees and commissions in a written contract. Read this thoroughly then ask questions to establish exactly what you are liable for.