Compare top Canberra car loans

Car loans in Canberra

Car loans are available in the nation’s capital from a wide variety of banks, lenders and other car finance specialists. For an in-branch experience you may want to consider community-focused banks and financial institutions located in the Australian Capital Territory (ACT), such as Bendigo Bank & Adelaide Bank, Beyond Bank and IMB Bank.

You can also apply for a car loan with Australian car finance providers operating nationwide.

Special considerations for car loans in Canberra

Although the loans offered won’t differ wildly from those available in other parts of the country, there are a few specific concerns you may wish to contemplate when buying a new or used vehicle in Canberra.

Canberra is located in the ACT between Sydney and Melbourne. Once outside the city limits the townships are generally much smaller and there may be lengthy distances between communities.

There are large stretches of highway and open road between Canberra and other major cities, so if you need to commute long distances for work or for recreation, you may want to place particular consideration on the type of vehicle and fuel system it operates. One of the barriers for electric vehicle ownership in Australia is range anxiety. 

However, earlier this year the ACT government revealed that from 2035 it will ban the sale of new petrol cars.

How do car loans in Canberra work?

Car loans in Canberra are no different to those offered in any city or town across Australia. The same rules apply. 

A car loan is a specific type of personal loan that you can use to buy a new or used vehicle when your savings won’t cover the total upfront costs. When taking out a car loan, you’ll need to make regular repayments over a fixed term towards the lump sum you borrowed (the principal), as well as interest accrued. 

When seeking vehicle finance you’ll be subject to standard credit check compliance. For those with a less than ideal credit score, securing a car loan from a popular or big name lender might be difficult. The finance options available may be limited, less flexible and more costly than those offered to individuals with a good-to-excellent score.

Ideally, you’ll work on improving your credit score and re-apply for a loan down the track. However, if you’re in need of an immediate car loan there may be local lenders that can offer competitive rates, despite your modest credit rating.

How to take out a car loan in Canberra?

The process for securing a car loan in Canberra is the same as it is for any city across the country.

There are some basic steps to follow when you’re attempting to obtain finance to purchase a vehicle: 

• Search and compare car loans to find one that best suits your needs
• Submit an application for the loan with your ideal lender
• If your application is approved, the lender will agree to loan you an agreed amount to buy a vehicle
• Sign a purchase agreement with the vendor
• The lender pays the vendor on your behalf
• You repay the lender - typically over a period of several years, plus interest

The amount you’ll need to borrow generally ranges from $5,000 to $100,000 and loan terms can stretch from one to 10 years, depending on the amount and other factors. Interest rates will vary depending on market conditions and your credit score. 

Car loans often come with fixed rates so that your repayments remain the same for the life of the loan. Variable rate loans are also available, with features like extra repayments or redraw facilities available for these kinds of loans. 

The interest rate on a car loan may be lower than that of an unsecured personal loan because car loans are typically secured by the vehicle you are purchasing. This means that if you default on your repayments, the lender can seize your car and sell it to recoup their finance.

Everyone's financial situation is unique, so there's no one "best car loan" to cover every possible need. To help you find the best car funding arrangement that suits your needs, it’s helpful to compare your options and do as much research as possible.

You may want to consult a financial advisor for further assistance in determining your borrowing capacity.

Curious as to how much you may be able to borrow? RateCity’s car loan borrowing power calculator can provide an estimate. Simply enter how much you want to repay, the repayment frequency (weekly, fortnightly or monthly) and the loan interest rate. The calculator will show you a projection of your potential loan affordability.