From humble beginnings in a Japanese garage in the 1940s, Honda has come a long way. The company has firmly committed to a line of strong, sleek and safe vehicles associated with the Honda name. Whether it's the Honda Civic that's caught your eye or the CR-V SUV that has you longing, it's understandable considering Honda's standard of excellence.
Vehicles start from a cool $$35,900 if you want to zip around in a Honda CR-V or rise as high as $51,781 if you want the people mover Honda Odyssey. Read on to figure out how to turn your Honda dreams into a reality.
How can you finance a Honda?
There are a range of finance options to choose from in order to fund your Honda dreams. Some of the options include:
- A secured car loan. A secured car loan offers lower interest rates as the vehicle you want to buy is secured against the loan. Minimum amounts for secured loans start from $3,000 and go as high as $100,000. Considering the Honda CR-V starts at $$35,900, keep this in mind while looking for loan amounts.
- An unsecured personal loan. An unsecured loan, while having higher rates, offers simple approval criteria and allows you to purchase a used Honda or a Honda that isn't covered by secured finance. Interest rates for unsecured personal loans generally range between 8% p.a. and 18% p.a.
- Dealership finance. Honda offers a range of personal finance options that can cater to whatever vehicle you wish to purchase. Business finance is also available, which covers a chattel mortgage on the entire range of vehicles as well as the option to choose a novated lease.
- Novated lease. A novated lease is where you, your employer and a financial institution bundle together the costs of your vehicle and allows you to pay for them using pre-tax dollars.
- Chattel mortgage. A chattel mortgage is tailored towards business vehicles. Vans are usually your first thought, but other Honda cars can fill in the void of a business car. A chattel mortgage is where the customer takes ownership of the vehicle when they've purchased it, but the loan company takes out a mortgage over the vehicle as security.
How much will a Honda loan cost?
As the prices range from $$35,900 to $450,000 throughout the Honda range, the loan you take out in order to purchase a Honda will also vary. It's important to keep in mind the loan terms you've applied for and the interest rate, as this will impact how much interest you owe over time.
It's also ideal to consider the costs of running a vehicle, which include the cost of fuel, insurance and registration. Another cost to consider is the fees that are associated with your loan. This includes monthly fees, transaction fees and late repayment fees.
How do you decide how to finance your Honda?
Making a decision on what finance option to go with can be tough. Some of the features to look out for include:
- The interest rate. The interest rate you need to keep an eye on is the comparison rate as this is the total cost of the loan per year. For example, if a car loan is offering a 6.2%% p.a. interest rate but the comparison rate is 6.71% p.a., focus on the second rate as that is what the loan will cost you in interest as well as fees.
- Fees (upfront and ongoing). Many loans require an application fee in order for your application to be considered. The application fee varies across lenders, and some will waive the monthly fee if they have a particularly steep application fee. Other fees to look out for include monthly fees, late repayment fees and transaction fees.
- Repayment flexibility. Whether or not a loan allows you to tailor your repayments to your pay schedule is another feature to look out for. Some lenders offer weekly, fortnightly or monthly flexibility whereas others might only offer monthly. Keep an eye out!
- Balloon payments. When your loan term ends, you are required to pay the remaining balance on the loan. This is a balloon payment.
Compare the Honda finance options below
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Frequently asked questions about financing a Honda
Should I get a new or a used Honda?
Ultimately, that is up to you. There are benefits to buying used and buying new. If you buy used, it's cheaper and you can get a history of the car. If you buy new, you're the only person to have owned that car.
What loan provider should I go with?
Again, this is up to you. Make sure to compare your car loan options using the features outlined above and also check the eligibility criteria to find the right lender for you.
Can I get a used Honda on a secured car loan?
Some secured car loans will allow you to get a used car, but this comes with car age restrictions. For example, with some providers, you are able to get a vehicle that is up to two years old whereas others have a higher car age limit of five years. It varies from lender to lender.
Picture: Shutterstock
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