With The Delay In New Car Shipments, Consider Switching Out Your Balloon Payments

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With The Delay In New Car Shipments, Consider Switching Out Your Balloon Payments

Posted on , updated on by carbroker

For the past couple years, we’ve been going through a dry patch. Nope, not in terms of rain – we’ve been good on that front. The dry patch we’re referring to is all about new cars.

It’s been tough getting the car you want in Australia, thanks to a global shortage in semiconductor chips which all cars use. And it can also be tough getting the right finance for it. But don’t stress on that front because, today, the team at Carbroker.com.au provide some top tips on navigating finance during the chip shortage.

Oh, and if you came here to learn about Doritos, you’re in the wrong place.

Switching out your balloon payments

There are plenty of reasons to switch out balloon payments for alternative options when navigating the delay in new car shipments. Here’s why:

  • Riskier option
    In a time of uncertainty, the last thing you want is more uncertainty. That’s what comes with balloon payments if you’re not 100% sure that you’ll be able to afford it when the time comes. And if you’re not buying the car of your dreams (because of the delay in new car shipments), then why increase the risk for a car you may only have for a year, two years or three years?
  • Defaulting on your balloon payment isn’t great
    If you default on your balloon payment, there are a couple of negative implications. For one, you may have to refinance it, leading you into a cycle of debt. For another, you may be forced to sell the car, leaving you without a car and still in debt. The loan provider may not approve of refinancing if you default the first time.
  • What if an ever better car becomes available?
    Let’s say you’re thinking of upgrading, but your dream car isn’t available due to the new car shipment shortage. If you go all out on a loan with a balloon payment for a car that your heart isn’t totally set on, you could be risking a lot for something that doesn’t matter that much to you.

Alternatives

There are a few alternatives to agreeing to a balloon payment in order to secure your next car. A novated lease is probably one of the most practical options.

A novated lease is when your employer agrees to lease a car on behalf of you, with the repayments coming out of your pocket. The beautiful thing about a novated lease is that the repayments come from your pre-tax salary, allowing you to see a big benefit in the reduction of your payable tax at the end of the financial year. And if you want to switch cars when a better one becomes available, you simply transfer your lease.

Still not sure of which option of finance is best for you? Get in touch with the team at Carbroker.com.au. They’re Australia’s expert team in car brokerage, finance, insurance and more

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C.K., Melbourne

This is by far the best money I have EVER spent. An outlay of just a few dollars saved me thousands - even on a limited edition vehicle! In fact, I saved so much I added a few optional accessories and still bought the vehicle at less than the retail price for the car alone (not to mention dealer delivery fees and charges). The savings didn't end there. I saved another bundle with the insurance you recommended (approx 33% less than another quote I already had). The savings here will continue for years to come! Not only will I be recommending your services to everyone I know, I will be using your services again myself. This is the ultimate car purchasing experience! Thank you again for your excellent service and attention to detail.

M.K., Brisbane

I am very pleased with the outcome, and I will certainly recommend it to my friends in the future.

D.F., Sydney

All I wanted was to buy a car with no hassle and at a decent price. I was very happy with your service and I will use you again in the future. I guess that says it all, doesn't it?

A.M., Brisbane

A short note to say thanks for the professional and profitable service that you've just delivered to me. Getting the best price from the city and then translating to a country dealer in a small town made it a lot easier. You'd be surprised how many times we bump into each other, and taking the local personality out of the negotiation was much appreciated by both the dealer and myself.

K.P., Armidale

...In any event, and irrespective of which car she decides on, we will certainly be using you and Kim (your finance broker).

F.W., Melbourne

Thanks for your help. Must admit I was very sceptical in dealing 'on line' with an unknown person/company. As a single woman I don't want the hassle of going backwards and forwards, playing one dealer off the other. I used the internet to get a measure of what's reasonable and then it's 'give me your best price' no second chance. Some people can't get their head around that but life's too short. I only want to deal with ethical people. I'm happy that a salesperson makes a profit but it has to be fair for both parties. Thanks and I'll be recommending your site to friends.

M.F., Brisbane

I've been with the RACV for over 10 years. I just didn't realise what a premium I was paying for the service. Going with your car insurance recommendation and the roadside assist is saving me several hundred dollars every year!

C.A., Ballarat

We saved around $1500 which was absolutely fantastic given that it resulted from only one web enquiry and five minutes of our time! Thankyou so much. And, yes, we will tell others of your service.

J.T., Canberra

I took delivery of the new car today. Until it actually happened I had a concern at the back of my mind that it was too good to be true to get the car at the price you obtained for me, with no catches. The dealer rep has been great and I have had no sense of getting cut price service to go with the low price. So, thank you. I am sold and based on my experience I am sure your business will continue to grow simply by word of mouth....mine will be among the loudest.

P.B., Sydney

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