The new loan package helping to cut car costs
It can cost as much as $310 a week to run an average sized car (this includes interest on a car loan), according to the latest findings from RACQ. Now that's not cheap!
It's for this reason that Beyond Bank Australia has launched a new product to help combat the price of buying and running a car.
Especially beneficial to young and first time car purchasers, Beyond Bank has combined a car loan with a "car budget" account and thrown in an offset account to help cut down the interest costs.
This is how it works: the car loan is linked to a transactional account, the Car Budget Account, which has an offset facility attached to it. Access to the transaction account is through a Visa debit card.
Customers are encouraged to utilise the free budget calculator on the Beyond Bank website to help them manage the cost of their car. The idea is that they save the running costs of their new car in the transaction account; these savings offset the interest on the car loan.
Consumers can choose between a low fee car loan or a low rate car loan. An interest differential of 1 per cent applies. Further rate reductions of 0.25 per cent can apply if you purchase a "green" vehicle. Even without the green discount, the car loan is competitive as it sits pretty close to what our cheapest car loans have to offer. The vehicle being purchased with a Beyond Bank car loan can be up to six years old.
MONEY VERDICT
The idea of linking an offset account to a personal loan is a fresh one. According to researcher Canstar, there is only one other institution currently offering this. Offset accounts are traditionally associated with home loans. This is the good news. The bad news is that the offset account only allows a maximum offset of $2500. Nevertheless, there are tax free savings to be made. There's no point earning interest on that $2500 only for it to be taken by the tax office. You may as well knock off some non tax deductible debt.
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