Lending People Car Loan

8 March 2022 | By Lending People

Know your options when buying your next vehicle

Purchasing a vehicle is a big commitment, which is why it’s important to know all your options, so you can make the decision that’s best for you

The freedom you feel when you get behind the wheel of your first car is such a fantastic thing. It changes your life. Suddenly, you are no longer bound to other people, relying on lifts or public transport to get places.

You have the ability to get yourself there, when you want, and the way you want. But, as always, when circumstances change, you may need to replace your vehicle with one better suited to your new needs. Whether that’s for work, because you have a new family to think of, or need something to get the dogs around in.

Know your options

If you’re in the market for a new vehicle, it’s important to know your options, and the pros and cons that go with them:

1. Buying new Some people’s ideal is to get a new car, straight from the manufacturer. While this may seem like the best way to ensure you get a pristine car with everything you need, there’s no two ways about it – a new car is expensive. And annoyingly, on average, it’s worth less as soon as you buy it. This can be offset by the manufacturer’s warranty period, meaning any issues or initial maintenance may be covered. But those warranties often come with prerequisite requirements and obligations to be applicable.


  • Brand new
  • Warranty cover
  • Latest in technology and safety systems


  • Very expensive
  • Depreciation, lowering your car’s value quickly
  • Warranty can be void if obligations aren’t met

2. Buying Used Unless you were quite lucky, most people’s first car is a family hand-me-down or a used car. The immediate draw of a used car is price – you’re usually getting a car at a fraction of what it once cost. But the reason it costs less is because it’s been out and about for a while, experiencing wear and tear. Older cars may also lack some of the latest life-saving features, like ABS brakes and air bags. There are ways to find safer cars, though. The Australian New Car Assessment Programme (ANCAP) ranks a model’s safety based on a 1 to 5 star rating, with 5 being the safest. The AA recommends you try to get the highest-rating car you can afford.


  • Lower cost
  • Proven vehicle
  • Lots of options to choose from


  • May not be as safe as newer cars
  • Potentially unknown faults, damage or service/maintenance records
  • May need replacement parts that are hard to source

3. Financing a vehicle An option that’s becoming more and more popular is vehicle financing. This allows people to buy newer and safer vehicles without having to pay the high prices a new car costs straight off the bat. Instead, they get a loan they use to buy the vehicle, then pay that loan off over a period of time that suits them. This way, you’re able to get a new car, with all the advantages it comes with like warranties and safety, without the cons of having to pay a large upfront cost. However, you are agreeing to make consistent repayments on this loan, and missing a repayment can have consequences.


  • You can get a new car without having to pay a large upfront cost
  • You’re likely covered by similar warranties that new cars get
  • Better safety ratings than a used car
  • For new cars, you’ll likely have lower maintenance and servicing costs


  • Missed repayments could lower your credit score, or even see the car get repossessed
  • You may not ‘own’ the car until the final repayment is made

Picking the right choice for you

It’s important you examine your own circumstances and decide what will best suit your needs. As you can see, there are pros and cons to new, used and financed vehicles.

If you’re considering a financed vehicle, make sure you reach out to our Advisers – we’ll be able to deliver unbiased, impartial advice that puts your needs first.

This blog is provided for general information purposes and is not a recommendation you enter into or exit any particular loans or insurance policy. Information on the website does not consider your particular circumstances, including your objectives, financial situation or needs. We recommend you seek advice from a financial adviser before taking any action as appropriate. The Lending People Limited (FSP240365) is a licensed financial advice provider and can provide advice on some types of personal loans. Find out more about The Lending People and how we may be able to help you.

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¹Fees: We do not charge a fee to use our service (commonly referred to as a platform fee, broker fee, or referral fee) if you do not enter into a personal loan arranged by us. A fee to use our services is applicable in all other cases. See our Terms & Conditions for the applicable fees.

²Annual Interest Rate (AIR): The AIR offered by our Personal Loan providers ranges from 8.95% p.a. to a maximum of 28.95% p.a.

³Annual Percentage Rate (APR): Also known as the 'comparison rate', the APR is calculated by adding together the AIR plus any additional fees that may apply (like establishment fees charged by providers). New Zealand law does not require APR disclosure, but doing so can better highlight borrowing costs. The APR offered by our Personal Loan providers ranges from 9.80% p.a. to a maximum of 29.91% p.a. The APR is accurate only for the representative example given below and may not include all fees like early repayment fees (if any). Different terms, fees or other loan amounts might result in a different APR.

⁴Minimum and Maximum Repayment Terms: Repayment terms offered by our Personal Loan providers range from 12 months to a maximum of 84 months.

Representative Example of the Total Cost of a Loan: If you borrow $20,000 over a repayment term of 36 months at an AIR of 8.95% p.a., your total repayments will be $22,493 (made up of $20,000 principal, interest charges of $2,243, and an establishment fee of $250). This example assumes monthly repayments and does not include premiums for any optional insurances, fees for using our services (if any) or default fees.

⁵Terms and Conditions: Our services are provided in accordance with our Application Terms & Conditions. All approvals are subject to provider credit criteria and responsible lending requirements. The loan amount and interest rate offered will depend on your circumstances, the type of lending required, and the security (if any) provided will reflect the loan amount and interest rate offered by the provider. Provider establishment fees, terms, and conditions apply.