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Finding the best car loan
There's no single loan that's best for everyone as all our needs are different - and what's best for you might not be best for someone else.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
You won't be charged for clicking through to one of our car finance partners. We get paid out of their pocket – not yours.
We're here to help
We've helped thousands of Australians find a car loan by keeping things simple and free of complicated jargon.
It's quick and easy to use
Our side-by-side car loan comparison makes it easy to find a car loan that is a good fit.
Finder Awards: Best Car Loans Australia
Best car loan award winner: Beyond Bank Low Rate Car Loan - Special Offer
Why we like this loan:
The Beyond Bank Low Rate Car Loan - Special Offer is the most cost-effective loan solution for car buyers. When taking the interest rate, monthly fees and application fees into consideration, Beyond Bank came out on top. The interest rate for this loan is incredibly competitive, at almost half the 'below 10%' methodology criteria.
Know how much you can spend before you go shopping. You can get pre-approved for a loan before you've found the car you want to buy. The car can be new or up to 2 years old and you can borrow between $5,000 and $125,000.
You can make additional repayments towards your loan without fees. Not only does this reduce your loan balance faster and the amount you pay in interest each month, but you can then redraw from those repayments without any fees if you need the cash.
2022 Best Car Loan - Finder Awards winner
Borrow between $5,000 and $125,000
Make additional repayments and redraw without fees
Best car loan award finalist: IMB New Car Loan
Why we like this loan:
You have flexible choice on the car you want to buy. The IMB New Car loan allows you to finance a new car or one that's up to 2 years old, giving you plenty of options when it comes to making a car purchase.
You can make additional repayments without penalty. This means you can pay back your IMB loan faster and save money on interest. But you can also take out Optional Loan Repayment Insurance so that you're covered if you aren't able to make your repayments.
The loan has a low interest rate and no fees. The IMB car loan offers a really competitive interest rate and although there is an upfront fee to be mindful of, there are no monthly fees or late payment fees.
2022 Finder awards finalist - Best Car Loan
Borrow between $2,000 and $75,000
No service fee
Best car loan award finalist: Heritage Bank Car Loan
Why we like this loan:
Suit repayments to your situation. Not only is your interest rate fixed so that you know the exact amount you're paying each month, but this loan offers flexible repayment terms. You can tailor repayments to suit you and pay either weekly, fortnightly or monthly.
You can get 100% finance. If you're approved for it, you can take out a loan for the full amount of the car.
Buy a car up to 5 years old. You can use your Heritage Bank car loan to purchase a new or used vehicle. Used vehicles can be up to 5 years old.
Getting a better deal on your car loan also depends on the car you're buying and your credit history. With a newer car you can get a secured loan with a lower interest rate. Lenders tend to offer the best car loans to low risk borrowers with good credit scores.
How do I find the best car loan for me?
Find a better car loan in 5 simple steps.
1. Compare loans and find a low interest rate
Car loan interest rates vary quite a lot. You could get a loan with an 8.00% interest rate or one with a 4.00% rate. It depends on both the loan and your own circumstances. That lower rate makes a huge difference in your repayments, saving you hundreds of dollars a month and thousands over the life of the loan.
Example: Breaking down car loan costs
Loan
A
B
Loan amount
$25,000
$25,000
Interest rate
4.23%
6.50%
Application fee
$300
$600
Monthly fees
$0
$8
Loan term
4 years
4 years
Monthly repayments (including fees)
$567.05
$600.87
Total loan costs (including fees)
$27,519
$29,442
Savings
$1,923 cheaper
N/A
Over 4 years, Loan A would save you almost $2,000 in interest charges and fees.
2. Find the best car loan for your vehicle type
The lowest rate won't help you if you can't use the loan to buy the car you want. Secured car loans use your car as the loan's security. This means you can get a lower interest rate.
These are ideal for new cars. Lenders won't take an older car as security because it won't hold its value.
If you are buying an older car the best car loan for you is probably an unsecured car loan. You'll have a higher rate, but the loan will be more flexible and let you buy a used car more easily.
3. Look for a loan that allows flexible repayments
The longer it takes to pay off a car loan the more interest you pay. A flexible loan that lets you make extra repayments means you can get out of debt faster. If you can afford it, you could even pay off the loan in one go.
But not every car loan lets you do this. And some charge fees for making extra repayments.
4. Avoid getting hit with lots of ongoing fees
The fees that come with your loan can make a big difference to how much you end up paying. Car loans can have several fees, including monthly service fees and one-off application fees.
Fees don't have to be a deal-breaker, but be sure to factor them in when comparing costs.
5. Choose the right loan term
Car loan terms are often flexible and can last for 1 to 7 years. A shorter loan term means larger monthly repayments. But you pay less interest because you get out of debt faster.
A longer loan term means lower monthly repayments but more interest in the long term. So finding the best car loan term is about striking a balance between affordable monthly repayments and a reasonable repayment term that doesn't cost you too much in interest.
Example: Picking the best car loan term for you
Amount borrowed
Loan Term
Interest paid
Difference
$30,000
3 years
$2,369
$30,000
5 years
$3,968
+$1,599
$30,000
7 years
$5,617
+$3,248
Expert tip: Check your credit score before you apply
Lenders set car loan interest rates based on something called risk-based pricing. The lender assesses your individual credit score and financial circumstances and sets an interest rate based on your profile.
This means the best car loans go to borrowers with high credit scores and minimal debts. Before applying for a car loan it's a good idea to check your credit score.
This way you can identify any outstanding debts or other credit issues. You may even find there's a mistake in your record, which you can correct before applying.
Who offers the best car loans in Australia?
There are several different types of companies offering car loans in Australia. These include:
Banks. Most banks, big and small, offer car loans.
Online lenders. Some lenders are 100% online (no physical branches) and offer competitive rates on car finance.
Car finance brokers. Car finance brokers can help you compare multiple car finance options so you can find a suitable product.
Member-owned mutual associations (motoring clubs). You can get a car loan through some car membership organisations, such as RACV in Victoria or RACQ in Queensland.
Dealerships. If you're buying a new car you can often arrange finance via the car dealer, either in-house or via a finance partner.
Here are the general pros and cons for each type of car loan provider (but keep in mind these are general tips, and each lender is different).
Lender type
Benefits
Downsides
Bank/financial institutions
Possibility to settle loan early with no penalties
Keep your financial dealings in one place (if using your current bank)
Deal directly with the loan provider
Flexible terms
Pre-approval possible
You can often make extra repayments and settle the loan early
Rigid lending criteria, with a detailed application process
Harder to negotiate lower rates
Car finance brokers
Competitive rates (may get wholesale rates from banks)
Expert guidance with the whole car buying process
Specialist lenders for classic cars, imports or bad credit history
Compare loan options from multiple sources
Broker charges may apply, and brokers charge fees in different ways
Some brokers are better than others and have access to more dealers
Online lenders
Often have lower rates than banks
Fast online application process
Easy to compare your options
Lack of face-to-face, personalised service
Less specialised help for car buyers (compared to brokers)
Member-owned mutual associations (motoring clubs)
You can often get a very competitive rate
Get roadside assistance and car insurance too
You need to be a member to get a loan
Not every organisation offers car loans
Dealership finance
Convenient (the dealer arranges finance for you when you purchase the car)
Promotional interest rates
Fast approval (so the salesperson can move cars quickly)
A dealer might have other products to cross-sell and sales targets to hit, prompting them to use high-pressure techniques
There may be substantial residual and balloon payments
Which bank has the best car loan rate?
Here are the current rates from the big 4 banks in Australia.
Bank
Interest rate from
Comparison rate from
ANZ Fixed Rate Personal Loan
6.99% p.a.
7.69% p.a.
CommBank Secured Car Loan
5.99% p.a.
7.05% p.a.
NAB Fixed Rate Personal Loan for a Car
6.99% p.a.
7.91% p.a.
Westpac Car Loan
5.99% p.a.
7.2% p.a.
More tips for finding the best car loans Australia
There are many steps you can take to strengthen your position as a borrower and get a better car loan.
Shop around for your car (and haggle). A better deal often starts with the car itself, especially when buying new. Shop around during the EOFY sales, when manufacturers slash considerable sums from the driveaway prices of new cars. If you can bag a runout model, again, you could net yourself substantial savings.
Avoid applying for too many loans. Lenders look at your credit score. And just applying for a loan is a negative mark on your credit file. This is why you should avoid submitting multiple applications for different car loans.
Choose the right loan term. As we covered above, selecting a shorter loan term means paying less interest.
Be flexible with your purchase. If you're willing to compromise by buying a slightly cheaper model, or missing out on some upgrades, you could save a lot of money with a smaller loan.
Improve your credit score. If you can pay off any urgent outstanding debts or unpaid bills that are hurting your credit score, fix these before you apply. This could unlock a lower rate based on your risk profile.
Disclose your assets. If a lender sees you have some serious assets, be it savings, investments or real estate, they may offer you a lower interest rate. So list your assets, even on secured car loans, to unlock those cheaper rates.
Rebecca Pike is Finder's senior writer for money. She joined Finder after almost four years writing for business publications in the mortgage and finance industry, including three years as editor of Mortgage Professional Australia. She regularly appears as a money expert on programs like Sunrise and Today, as well as across radio and newspapers. She also holds an ASIC-recognised Tier 1 Generic Knowledge certification.
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Expert tip: Check your credit score before you apply