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Pros And Cons of Car Finance

10 February 2022

If you have struggled to save up the thousands of dollars you would need to buy a vehicle outright, car finance could be an excellent option for you. Find out if the benefits of financing a car outweigh the drawbacks for your situation. 

Pros of Car Finance

Improve Your Credit Score

Many kiwis who have struggled with making repayments in the past can find it challenging to attain finance. However, if you find a company that's willing to lend to you, this is a great chance to give your credit score the boost it needs. As long as you reliably make your repayments on time, your credit score should go up as you pay off the loan.

Alternatively, if you don't have much credit history, one of the benefits of financing a car is that it can help you to build up that positive history. This can turn an average credit score into an excellent one. 

Get The Money Quickly

If you've got your eye on a specific car already, you may be anxious to make the purchase so that no one else can snap it up before you do! If you apply for a loan with a bank, it can take a long time to get the loan processed. Stadium Finance makes loan decisions within 24 hours and gets the money through to you as soon as possible - so you could potentially be driving away in your dream car by tomorrow! 

Competitive Interest Rates

The interest rate you are offered will be highly dependent on your loan company. Stadium Finance can offer car loans from as low as 7.95% per annum. Meanwhile, most major banks offer credit cards and loans at somewhere closer to 12.95% - over time, the difference in the amount of interest you will pay can be significant.

No Deposit Needed

If you don't have a deposit for your car saved up, don't worry. We don't require a deposit for you to secure a car loan with us. Instead, we can lend you 100% of the cost of the vehicle. 

Get A More Reliable Car 

By getting a loan, you can likely spend more on a car than if you scrimped and saved over a few months to buy one. This will enable you to buy a nicer, newer car that will be more reliable, saving you money in the long run. If you can buy a higher quality vehicle, the less likely it will be to break down and have issues.

Get A Car On A Tight Budget

For many people who are on a tight budget, it would take them years to save up to buy a car with cash. However, in the meantime, you need a way to drop the kids at school and get to work, as well as all the other things you do in a week. One of the benefits of financing a car is that you'll get a vehicle right away without waiting years.

Regular Payments

With a car loan, you will know in advance exactly how much you're expected to repay each month so that you can plan for this. Put the amount into your budget and slowly work towards paying off your vehicle.

No Mileage Limits

If you were considering leasing a vehicle, this can impose mileage limits on you so that you can only drive a certain distance each year. However, when you purchase a car on finance, you'll be able to drive as far and as often as you like. This is a much better option for avid travelers or those who love taking road trips with the family.

Tax Deductions

Are you thinking of buying a car for business use? In this case, the interest you pay in addition to the cost of running the vehicle might be tax-deductible. The percentage of costs you will be eligible to claim depends on how much you use the car for business vs personal use. 

Cons of Car Finance 


Yes, you will pay more overall by getting a car loan instead of saving up for the car. However, sometimes you need a car right away and just can't wait until you've saved up the money, in which case paying extra is worth it.

Car Value

Cars are an asset that depreciates over time. So, the long your loan term is, the less your car will be worth by the time you own it outright. That's why Stadium Finance recommends option for a shorter loan term if you can afford to.

Secured Car Loans

With most car loans, the car is put up as security against the loan so that if you don't make your payments, the vehicle can be taken back by the lender. You don't own your car outright until you've made all of your repayments. However, as long as you follow the payment schedule, you will have no issues with this.


Lenders will usually require you to get comprehensive car insurance when you borrow money to purchase a vehicle. This is an additional regular expense that you'll have to factor into your budget. However, it is in your best interest to get comprehensive insurance whether you're borrowing money for a car or paying cash. Insurance offers you protection from having to pay for the total cost of repairs if your vehicle or another vehicle is damaged and you are at fault. Insurance can actually save you thousands of dollars in the long run. 

Where To Get Car Finance

Stadium Finance takes the hassle out of getting a car loan. We offer competitive interest rates as well as the funds within 24 hours of approval and receiving your signed documents. After that, you'll be able to buy your car and could be driving away in no time! 

Apply online today by entering just a few details and find out quickly if your loan has been approved. 

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