If you live in South Australia and you're planning to buy a new or used car, you may be wondering what car finance options are available to you. While there are a number of South Australian financial institutions such as Adelaide Bank and BankSA, there is also a wide range of online lenders and nationwide banks that offer car loans to residents of Adelaide, Gawler, Mount Gambier and beyond.

When it comes to securing finance for your vehicle purchase, there are three main avenues South Australians can choose to take:

1. Accept dealership finance - This might be your most convenient option, but it's unlikely to be the most competitive.
2. Go direct-to-lender - If you are a long-standing customer of a bank that offers car loans, you may be tempted to stick with what you know. But keep in mind, you may be missing out on products that offer better value or more closely suit your needs.
3. Use a comparison website, such as RateCity, to research options - Weighing up your options allows you to make an educated decision, which is important when you're taking on a big financial commitment like a car loan.

If you decide to take your car loan search into your own hands and make a comprehensive comparison, RateCity's comparison tools can help you on your way. But first, you'll need to decide what type of car loan will suit your needs - starting with the credit provider.

For those looking for a bank branch where you can go in person to discuss your finance options, Adelaide offers branches of the big four banks (Commonwealth Bank, Westpac, ANZ and NAB), Bendigo Bank, Bank Australia, BankSA, Adelaide Bank and plenty more.

But if you're happy to manage your finances online, you'll have a much greater variety to choose from. RateCity has a database of over 90 car loan lenders, many of which provide personal finance Australia wide.

And if you're looking for some local guidance, you might like to consider reaching out to an Adelaide-based finance broker who can offer you financial expertise paired with valuable localised knowledge.

Whenever you make a significant financial decision, like taking out a new car loan, it's important to weigh up the benefits with any potential risks in order to make an informed choice. Here are some of the key pros and cons associated with car loans in Adelaide:

Searching and comparing car loan options is a key part of the borrowing process, and RateCity's comparison tools can considerably reduce the time it takes for you to do your research. Here are some of the tools available and what they can offer you:

Comparison tables

Our car loan comparison tables can be a great place to start when comparing car loan options as they can help you compare apples with apples. Simply enter the amount you want to borrow along with your preferred loan term, and then filter down your loan options based on the features that fit your needs. Then you can compare your options side by side to see how they stack up on several factors, including interest rate, monthly repayments, and Real Time Ratings™ score.

Repayment Calculator

Once you have a short list of car loan options, you may want to see how they might work with your budget. One way to do so is to use RateCity’s car loan calculator, which allows you to enter in a car loan’s details and repayment frequency to see how much loan repayments may cost you. It's as simple as entering your preferred loan amount, interest rate, loan term and credit rating for an estimate of your repayments and total interest charges.

Real Time Ratings™

Real Time Ratings™ is RateCity’s rating system that ranks personal loans. As the name suggests, Real Time Ratings™ results are calculated in real time, so they are as up to date as possible. Each car loan product is given a score out of five, based on loan costs and flexibility, which can assist you in narrowing down your shortlist of car loan options.

It makes sense to look for loan products with the most competitive interest rates, but it's important to understand why different types of car loans may offer different rates. There are a number of factors that influence a loan's interest rate, including the following:

Secured vs unsecured loans

Most lenders typically offer two types of car loans - secured car loans, in which the vehicle itself is used as collateral on the loan, and unsecured car loans, where no collateral is provided. 

Loan providers will typically charge higher interest rates for unsecured car loans because they regard them as riskier than secured car loans. Secured car loans, however, usually have restrictions on the type of car you can buy, including its age and condition.

Fixed vs variable interest rates

There are two interest rate types - fixed rates or variable rates. With a fixed rate loan, your repayments will be the same throughout the life of the loan, which could make budgeting more manageable. If you choose a variable rate, however, the rate can fluctuate based on the market during the loan’s term, meaning your repayments could potentially increase or decrease at certain points in time.

Credit score

Your credit history plays an important part in determining the interest rate a lender may be willing to offer you. The most competitive interest rates are typically reserved for borrowers with good to excellent credit scores, as their credit history demonstrates positive borrowing behaviours. On the other hand, borrowers with sub-par credit ratings will generally be offered higher interest rates as they can be seen as higher risk.

If your credit score has room for improvement, you might like to consider working towards boosting it before applying for a car loan. You can check your credit scores for free by visiting RateCity's credit score hub.

There's more to a South Australia car loan than its interest rate, so be sure to weigh up all of the following factors before you start narrowing down your shortlist:

Interest rates - An obvious place to start, the car loan's interest rate will determine how much you pay in total interest charges. But be mindful that lenders often charge fees in addition to interest charges, so it's important to factor both into your calculations.

Fees - The kinds of upfront and ongoing fees you may be charged can vary from one lender to the next, but may include any number of the following: 

• Loan application fees
• Establishment fees
• Monthly fees
• Late payment fees
• Early repayment fees
• Exit fees

Comparison rates - To get a better idea of the total cost of the loan, consider the different comparison rates on offer. A loan's comparison rate includes the interest rate plus any standard fees that may be payable.

Extra features - Some lenders offer extra features that may be beneficial to your needs, such as the option to make extra repayments in order to pay down your loan faster, and a redraw facility that will allow you to redraw any additional repayments you've made - if or when you need to.

Loan term - The loan term is the length of time you have to pay off the total borrow amount plus interest charges. Car loans tend to have loan terms of three to five years, but some lenders may offer longer or shorter terms. Generally speaking, the longer the loan term, the cheaper the repayments, but the more you'll likely pay in total interest charges.

If you're looking for a little extra help on your car loan comparison journey, you might like to consider a car finance broker. Car finance brokers are experts in the field who help connect South Australians buying cars with banks and lenders offering a wide range car loan products. 

Similar to mortgage brokers, car loan brokers can help you find a vehicle finance option that suits your individual financial needs, and can help guide you through the car loan application process with personalised information and advice.