Compare Your Best Car Loan Interest Rates from 35 Lenders (2024)

This guide has focussed on secured car loans, but it’s not the only way to finance a car.

Depending on the situation and what the vehicle is used for, there are some other options available:

And if you're financing a business vehicle...

What about adding the car purchase to your mortgage? This is known as home loan refinancing. It can be appealing because your home loan usually has a lower rate than you can get with a car loan. But long home loan terms (up to 30 years) can make this an expensive option over time.

A car loan is a type of secured personal loan. The car you're buying is the security, meaning the finance provider can reclaim the car to recoup its costs if you can’t repay the loan.

This reduces risk for the lender and means car loan interest rates are usually lower than unsecured personal loans.

Car loans can be used for new or used cars, and for dealer or private sales.

With a secured car loan you should get:

Most lenders offer car loans between $5,000 and $100,000. On average, borrowers request $44,547 for a new car loan and $30,005 for a used car loan, according to Money data.

How much you're able to borrow will come down to your credit score and financial situation: income, expenses, assets (e.g. a home) and other debts (like credit cards – the card limit, not your current balance).

Car finance terms are usually between 2 and 7 years (the most common loan term is five years).

Use our car loan calculator to estimate your repayments based on different loan terms (hint: the shorter the term, the more you'll save in interest).

The most common car finance fees are:

The comparison rate gives a closer estimate of the overall cost of your car loan based on interest AND fees. Lenders are legally obliged to show this when advertising car loans.

This depends on the lender. It also depends on which company they check your credit score with as the score ranges vary. As an example, Equifax (one of the major credit reporting companies operating in Australia) classifies anything above 669 as being a ‘good’ credit score.

Having a good credit score means you would be eligible for a loan with most lenders (depending on your other circ*mstances).

But having a bad credit score isn’t the end of the world. It can simply mean you need to apply with more specialist lenders.

If you have a bad credit score and your application is accepted, you may be offered higher rates and/or more restrictive loan terms.

Avoid making multiple car loan applications in a short space of time as this can damage your credit score.

Find out what your credit score is for FREE before you apply for a loan.

A lot of car finance providers can pre-approve your car loan on the same day you apply.

For a fast turnaround, you’ll need to be able to prove your identity and supply documents to prove your income and expenses.

This usually includes your most recent pay slips, bank statements and home loan statements.

Typically, you can expect to be driving your car in 2-3 business days.

You can apply for a car loan with banks, car dealerships, car finance brokers or online lenders.

They all have different products and rates so it can be hard to find the right one for you.

We recommend using Money's matching engine to do the leg work for you. It's like applying for quotes direct with a range of lenders all at once.

This really depends on what you want from a car loan deal.

Online car loan lenders often have the lowest rates. They can also approve loans quickly in many cases, if your application is straightforward.

The reality is shopping around is the best way to find the most suitable lender for you.

Generally your car finance options are the same regardless of what car you're buying. The exception is the finance offered through the manufacturer itself or a particular dealer.

We've written guides on the financing options and deals available for some of the most popular car manufacturers in Australia:

It's important to make an informed decision about whether a car loan is right for you. To help you do that, here's a summary:

Pros of car loans

Cons of car loans

The lowest secured car loan interest rate currently available is 5.66% p.a. (comparison rate 6.45% p.a.).

At the other end of the scale, our analysis, shows some lenders in Australia charge rates as high as 29.99% p.a. (comparison rate 31.83%).

The average car loan interest in Australia is 12.26% p.a. For green car loans, the average interest rate is lower at 6.99% p.a.

These averages are based on Money's database of lenders.

To be eligible for a lower rate car loan, here are some steps to consider:

The comparison rate on a car loan is designed to represent the true cost of the loan. It factors in the loan's interest rate as well as most fees charged.

As the name suggests, the comparison rate is designed to make it easier to compare loans based on their actual cost. It will highlight if a car loan has a deceptively low interest rate, but high fees inflating the overall cost.

Legally, car loans must be advertised with a comparison rate.

Dealer finance is not generally known for offering fabulous value for money. In many cases, you'll pay a higher interest rate for the convenience of getting your car and the finance taken care of under one roof.

The government's Moneysmart website suggests you should "compare loans before visiting a car dealer".