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Can you get a car loan in Brisbane?

Queenslanders love their cars – and the numbers prove it. According to the Federal Chamber of Automotive Industries (FCAI), sales of new cars in Queensland had grown by more than 30 per cent year on year in August 2021. If you’re also in the market for a car in Brisbane, whether to make the run between home, work and school, or to trek off on road trips to the Gold Coast, Sunshine Coast or regional Queensland, you may need a car loan.

Car loans are specialised personal loans that allow you to afford the vehicle of your choice, with repayment options to suit different budgets and financial situations. It’s important to compare car loans before making a car loan application, to make sure you’re getting a deal that offers value and can help you reach your goals. Being approved for a car loan before you walk into a Brisbane dealership can also help you shop with confidence.  

Where do you find Brisbane car loans?

There are a range of options available to find a car loan in Brisbane. These may include Queensland-based banks such as Bank of Queensland and QBANK, as well as Queensland’s non-bank lenders such as RACQ or loans.com.au. These lenders may offer competitive rates on car loans, personal loans, and a range of other credit products. 

Car loans are also available in Brisbane from banks and lenders that operate Australia-wide. These Australian lenders include the big four banks – ANZ, Commonwealth Bank, NAB and Westpac – as well as a variety of non-bank lenders and specialist car finance providers. There are even online-only lenders who may be able to offer you a car loan, provided you’re comfortable with an online application process and with managing your car loan from your computer or smartphone.

Each lender’s car loans may have different interest rates, fees, features, terms and conditions, as well as different eligibility criteria, making it essential to compare car loans before signing on the dotted line.

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What are the benefits and risks of Brisbane car loans?

A car loan can often allow you to get on the road sooner than saving up the money to buy a car outright. Borrowing money for a car can help to establish your credit history, and responsibly managing your car loan repayments can help to improve your credit score, which could in turn help improve your future borrowing prospects. And if you use your car for work purposes, you may be able to claim some tax deductions from your car loan expenses.

On the other hand, you’ll need to consider whether driving your car sooner will be worth the costs of your car loan’s interest charges and fees. There’s also depreciation of your car’s value to consider, and the risk that you could lose your car and hurt your credit score if you’re unable to keep up with your monthly repayments.

In Brisbane, you may also need to consider the risk of floods and other natural disasters, especially if you regularly take your car out to explore Queensland’s wide open spaces. While you may be covered by car insurance, you could still end up out of pocket if your car is damaged or destroyed and still has money owing on it.

How do you compare Brisbane car loans?

Every car loan is different, whether you’re in Brisbane or elsewhere in Australia. This means there’s no single ‘best’ car loan that suits everybody’s needs, and makes it important to compare car loans before choosing one.

Many Australians compare car loans by looking at their interest rates - the lower the rate, the potentially cheaper the repayments. However, there’s much more to consider before selecting a car loan. Fees, your loan amount and the loan term can affect the overall cost of your car loan, and the features and benefits can affect the value it offers you.

What car loan rates can you get in Brisbane?

A low interest rate on your car loan can mean more affordable repayments, though the car loans with the lowest rates tend to have the toughest eligibility criteria.

Many car loans have fixed interest rates, where your repayments will stay the same for the duration of the loan term, though some offer variable interest rates, which may increase or decrease, affecting the cost of your loan, but potentially offering improved flexibility.

Many car loans are secured by the value of the vehicle, giving them lower interest rates, but limiting your choice of vehicles to new cars, which are often more expensive. Unsecured car loans have no restrictions on the type of vehicle you can buy, such as used cars, but may have higher rates to pay.

Your credit score can also affect your car loan's interest rate. If you have a good credit history of borrowing and repaying money on time, you're more likely to have a good credit score, and may be offered a low rate car loan. But if you've had money troubles in the past, such as defaults on bills or loan repayments, you may have bad credit. Lenders may see you as a risky borrower, and charge higher interest rates on bad credit car loans. 

What are the other features of Brisbane car loans?

Car finance providers in Brisbane and around Australia often charge fees as well as interest on their car loans. There may be an upfront establishment fee when you first take out a loan, as well as an ongoing fee. There may also be fees to pay for accessing special loan features, or for exiting the loan early.

Sometimes a car loan with a low interest rate and high fees may actually cost you more than one with a higher interest rate but no or low fees. To quickly get an idea of a car loan’s total cost, check out its Comparison Rate, which combines the cost of interest and standard fees into a single percentage.

Another factor that could influence the cost of your car loan is the loan term – how long you take to pay off your car. A shorter loan term could be more expensive from month to month, but cost you less overall as you’ll be charged less interest in total. A longer loan term could make your repayments cheaper each month, but you could end up paying more interest on your car in total.

If your car loan offers the option to make extra repayments, this may help you to pay off your car faster and be charged less interest. Just keep in mind that you could also be charged fees for making additional repayments, or for exiting a car loan early.

Can you get help with car financing in Brisbane?

If you could use some assistance comparing car loans, a Brisbane-based car finance broker could be what you need. These financial experts can look at your personal finances and recommend car loans that may suit your financial needs. You may also be able to benefit from the local knowledge of a Brisbane-based broker, as their relationships with local lenders could help them to negotiate on your behalf, or grant you access to special car loan deals that are exclusive to brokers. Plus, they can take care of much of the car loan application process for you, minimising hassle on your part.

A broker may also be able to help you work out alternative means of financing a car purchase. For example, if you already own a home or have a home loan, you may be able to use your equity to get a line of credit to buy a vehicle. There are also specialised car financing options to consider, such as leasing a vehicle or using a chattel mortgage, which could have some tax benefits if you use your car for work in Brisbane.

How do you get a car loan?

There are four different ways you can get a car loan. You can go straight to a lender. You can get a finance broker to organise a car loan for you. You can get ‘dealer finance’ – which is when the car dealer organises a car loan for you. Or you can organise your own car loan through a comparison website, like RateCity.

Whichever method you choose, you will need to provide proof of identification, proof of income and proof of savings. So you may be asked for any combination of passport, driver’s licence, bank statements, payslips, tax returns and utility bills. You might also be asked to provide proof of insurance.

What is a car loan?

A car loan, also known as vehicle finance, is money that a consumer borrows with the express purpose of buying a vehicle, such as a car, motorbike, van, truck or campervan. Car loans can be used for both new and used vehicles.

What is a dealership?

A dealership is a car yard or a place where cars are sold.

What is a loan-to-value ratio?

The loan-to-value ratio, or LVR, is a percentage that expresses the amount of money owed on the car compared to the value of the car. For example, if you take out a $15,000 loan to buy a $20,000 car, you have a loan-to-value ratio of 75 per cent. Loan-to-value ratios change over time as you pay off your loan and your car depreciates in value. For example, two years later you might now owe $10,000 on your car, which might now be worth $15,000. In that case, although there would still be a $5,000 difference between the size of the outstanding loan and the value of the car, the loan-to-value ratio would now be 67 per cent.

What is a loan term?

The loan term is the amount of time the lender gives you to repay the car loan. For example, if you take out a $20,000 car loan with a five-year loan term, you would be expected to pay off the entire $20,000 (plus interest) within five years.

This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.