How to Finance a Car the Smart Way

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When buying a new car via financing options, most people tend to make the mistake of not adding the auto financing cost into the final price. For instance, if you buy the new Land Cruiser Prado, the difference between the invoice price of the dealer and the “sticker price” can be around $1,600. If you’re good at negotiating, you can save $1,100 or more on the SUVs total price. 

If you’re financing your car with no down payment at 6% for four years, your interest payments will be more than $2,000. However, by financing your car with a $1,600 down payment for three years at 4%, you will be saving more than $1,000. When you’re negotiating your car’s price, you can’t ignore the financing terms and rates you’re getting. 

When you’re shopping for a new car, you should do your research, and if you want to buy a new SUV, you should conduct a comprehensive overview of the Land Cruiser Prado. It’s Australia’s favourite large SUV, offering seating for seven, has a single 2.8-litre turbo-diesel four-cylinder engine and genuine off-road ability. It’s not the most powerful and doesn’t offer the most tech features, but it remains the most popular SUV in Australia, even if it’s not the cheapest option in the market. 

When planning to finance for the Land Cruiser Prado, it’s best to plan and compare rates from multiple lenders to ensure you’re getting the best deal possible. Here’s how you can finance a car the smart way:

Understand Your Credit Score 

Before getting a car loan, you must know your credit score. You can qualify for a car loan with bad credit. However, you will be paying more, and the banks can repossess the car if you’re unable to pay. However, most people are so excited to get a loan with bad credit; they don’t even think about getting a lower rate. 

Dealerships tend to advertise great interest rates for newer cars like 1.9% or 2.9% and even 0%, but they don’t reveal that only buyers with excellent credit scores of more than 750 will get these rates. Buyers with credit scores of less than 700 may still get good interest rates, but they won’t get the best terms. If you have a low credit score, you should shop and compare to ensure you get the best rates offered by banks. 

Keep the Term Short So You Can Easily Pay Back 

You will have higher monthly payments but lower interest rates if you get a short loan term, which you should look for when financing a car. Smart car salespeople will try negotiating based on monthly payments and not the car’s price if you walk into a dealership and ask for car financing terms. However, the salesperson is showing you lower payments because they aren’t reducing the car’s overall price but are extending your loan term. 

You will be paying more interest on the loan with time. As banks tend to charge high interest rates for lengthy loans, it increases your credit. It’s tempting to extend your loan to five or six years, so you get monthly payments that are easy to make, but you will be paying more interest on your auto loan. 


Unless you are getting 0% interest or another low APR, the best way to buy a car is by paying with cash. If you have to get a car loan for the new Land Cruiser Prado, you should be as pragmatic as possible. 

Krystal Morrison

I create this blog to share my daily tips about home improvement, children, pets, food, health, and ways to be frugal while maintaining a natural lifestyle. Interested to be a Guest Blogger on my website? Please email me at: [email protected]

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