How to get the cheapest loan for your car in Hong Kong!

Many people take out loans when buying a car in HK as the rates are attractive and approval generally easy. While taking a car loan can get quite confusing sometimes, it is not rocket science. Fortunately for you, we have put together 5 simple tips to ensure you get the BEST loan everytime!


  1. Never let a car salesman arrange your car loan!

You will never get the best rate when a salesman arranges a car loan for you. Salesmen will offer you ‘discounts’ on the car price if you finance your car through them. This is because the bank/finance company pays them a rebate on the high interest rate that YOU have signed on to. It is always cheaper in the long run to take a cheaper loan and pass on the discount.


  1. Hire purchase (HP), Leasing or Personal Loans?

This can be very confusing for anyone. Car loans are usually done via HP or Leasing. Sometimes you are offered a better rate if you borrow via ‘Leasing’ and ‘prepay’ a few instalments. This is actually a mathematical trick used by financiers as they are charging you interest on money that they didn’t really lend you. We always recommend for HP with zero prepayment to keep things simple.

Alternatively, more people are taking on the simpler Personal Loan (P Loan) as the rates nowadays are equally competitive plus you get the added benefit of having no restriction on the type and age of car that you buy (Car loans are usually extended to cars of age 10 years or less only, plus you will be required to buy full coverage insurance which can get VERY expensive).


  1. Any extra or hidden fees?

Some financiers will throw in all kinds of ‘handling’ or ‘processing’ fees to the loan. Always ask if any additional fees are required. If you want to be more precise, you can also ask if there are any additional fees for early redemption as well.


  1. Whats the best interest rate?

Always ask for the True Rate or APR (annualised percentage rate). There can be no gimmicks with the APR so you can compare freely between any type of loan.


  1. Compare!

As with all things, you will only get the best deal if you compare! There are a ton of banks and finance companies offering car loans and P loans and pricing can differ quite significantly if you don’t do your homework properly. Fortunately for us, there are many financial comparison sites nowadays that conveniently checks the best rates for you. Check out our MoneyHero widget below and see if you are getting the best rate in the market today!