Car Finance - The Pros & Cons

Introduction to Car Finance:

Purchasing a car is a significant financial decision, and many individuals in New Zealand turn to car finance options to make it more affordable. Car finance provides an opportunity to spread the cost of the vehicle over a period, making it accessible to a broader range of people. In this article, we will explore the pros and cons of car finance in New Zealand and provide a detailed profile of Simplify Car Finance, a leading car finance provider. We will also highlight the benefits of using Simplify Car Finance compared to traditional loans.


Pros of Car Finance:


Car finance allows you to spread the cost of the vehicle over a period, making it more affordable compared to paying a lump sum upfront. This can help individuals manage their finances more effectively and avoid financial strain.


Car finance options come in various forms, such as hire purchase (HP) and personal contract purchase (PCP). These options offer flexibility in terms of repayment terms, deposit amount, and balloon payments, allowing borrowers to tailor the loan to their specific financial situation.


Car finance is often more accessible than traditional loans, as it is designed specifically for vehicle purchases. Lenders offering car finance may be more willing to approve applications from individuals with a limited credit history or those who have had credit issues in the past.

Potential for better cars:

Car finance provides an opportunity to choose a better car than what you might be able to afford upfront. By spreading the cost over time, you can opt for a higher-spec model or a newer vehicle that might otherwise be out of your budget.

Warranty and maintenance coverage:

Some car finance agreements include warranties or maintenance packages, providing added peace of mind and potentially saving money on repairs and servicing costs.


Cons of Car Finance:

Interest charges:

Car finance agreements typically involve interest charges, increasing the overall cost of the vehicle. Borrowers need to consider the total amount repaid, including interest, over the term of the loan.


Cars generally depreciate in value over time. If the finance term is longer than the car's expected useful life, borrowers may end up owing more than the car is worth at the end of the agreement.

Limited ownership rights:

Until the finance agreement is fully repaid, the lender retains ownership rights over the vehicle. This means borrowers may face restrictions on modifications, selling, or transferring ownership of the car.

Early repayment penalties:

Some car finance agreements may include penalties for early repayment or settlement, limiting flexibility if you wish to pay off the loan before the agreed term.

Potential negative equity:

If the value of the car depreciates faster than the loan is being paid off, borrowers may find themselves in a negative equity situation. This means owing more on the loan than the car is worth, which can pose challenges if you decide to sell or trade in the vehicle.


Our preferred car finance partner - Simplify Car Finance

Profile and Benefits:

Simplify Car Finance is a reputable car finance provider in New Zealand that offers a simplified and streamlined application process. With Simplify, borrowers can benefit from several advantages compared to traditional loans:

Quick and easy process:

Simplify Car Finance understands the importance of a seamless experience. Their online application process is straightforward, and approvals can be obtained within hours, ensuring a hassle-free car finance journey.

Competitive interest rates:

Simplify offers competitive interest rates, helping borrowers save on overall interest costs over the term of the loan.

Customized solutions:

Simplify understands that every borrower's financial situation is unique. They provide personalized solutions, including flexible repayment terms, deposit options, and balloon payments.


Here at Money Compare we recommend Simplify Car Finance as a great starting point for anyone looking at purchasing a new car or considering refinancing a current vehicle.  Simplify offer faster, easier access to finance and their technology compares rates from major lenders which they then use to negotiate directly to get you the best rate.  You can easily check your eligibility without affecting your credit score to get instant approval and they make the application process hassle free, you can do everything online, sign and hit the road.

Click through below, view the amount you are able to borrow and check you're eligible without it effecting your credit score. The Simplify smart technology can then provide you a super fast approval online.