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Used Car Loan - Dealer Only

Real Time Rating™

3.84

/ 5
Interest Rate

3.99

% p.a

Fixed

Comparison Rate*

4.53

% p.a

Company
Monthly repayment

$552

Loan amount

$5k to $100k

Total repayments
Real Time Rating™

3.84

/ 5
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Car loan lenders we compare at RateCity

Learn more about car loans

What is a fixed rate car loan?

A car loan is a type of personal loan that is taken out by a borrower specifically to buy a new car, used car or other eligible vehicle. Fixed rate car loans specifically lock the borrower into the same interest rate and repayments over the life of the loan term.

Fixed rate loans may help you avoid any financial stress should interest rates rise. As you’re locked into a set rate, the lender can’t make any unexpected changes to your repayments. You may also benefit from simplified budgeting, as a fixed rate car loan means you're making the same repayments for the loan term. 

Is it better to have a variable or fixed rate car loan?

Whether you need a used car loan or a new car loan, the best car loan for you will not be the best for someone else, as it depends on your financial situation. If you’re looking for security, then you may prefer the certainty of a fixed rate car loan. To find the lender with the best car finance, whether variable or fixed, you need to compare the loan type, account fees and interest rates.

Benefits and risks of a fixed rate car loan
The main advantage of a fixed rate car loan is the certainty it offers in terms of repayments, and the protection offered against future rate rises. Borrowers know exactly what their repayments will be, and that amount is locked in for the life of the loan. Set repayments provide a level of assurance that variable rate loans just can't.

While the benefit of a fixed rate car loan lies in its pre-agreed repayment structure, this is also a disadvantage. If your lender cuts interest rates, this will not be passed on to you if you have a fixed rate loan, only to borrowers on variable loans. In addition, interest rates on fixed loans may also be higher than rates on variable loans given the certainty they offer. Much like insurance, you may need to pay a little extra to protect against rising interest rates. 

Fixed rate loans may also have more restrictive conditions than variable loans. For example, repaying your loan early may attract financial penalties, to ensure the lender recoups the loss of interest that an early exit brings.

Benefits and risks of a variable rate car loan 
As the interest rate is variable, the lender may adjust it at any time. The main advantage of this is that your repayments may fall if your lender cuts their interest rates, reducing your interest costs. Variable car loans may also offer more flexible features, such as the ability to make extra repayments or pay out the loan early, features that are typically not available on fixed loans.  

The main disadvantage of a variable rate loan is that the lender may raise the interest rate on your loan at any time. A sudden, unexpected increase in your repayments could exceed your budget, especially if you’re on a tight one.

How do interest rates work for car loans?

Interest rates are charged by lenders in return for the risk they take on when they lend money to individuals. For a fixed car loan, the interest rate you are charged will not fluctuate over your fixed period.

The example below shows how interest rates can be calculated on a car loan with a 7 per cent interest rate and a monthly repayment of $400. 

The interest cost on car loans is usually calculated daily and accrued monthly.  As this is a principal and interest rate calculation, it does not include other fees or charges such as ongoing management fees, early exit fees, or late payment fees. These may apply to your car loan, so be sure to check this before signing anything.

MonthStarting BalanceInterest RateDaily Calculated InterestMonthly InterestMonthly PaymentEnd of Month Balance
January$5000.007%7% ÷ 365 = 0.02% 
0.02% x 5000 = $0.96 
$0.96 x 31 = $29.76 $400$5000 + $29.76 - $400  
= $4629.76 
February$4629.76 7%7% ÷ 365 = 0.02% 
0.02% x 4629.76= $0.89 
$0.89 x 28 = $24.86 $400$4629.76 + $24.86 - $400 = $4254.62 
March$4254.62 7%7% ÷ 365 = 0.02% 
0.02% x 4254.62= $0.86 
$0.86 x 31 =$25.29 $400$4255.40 + $25.29 - $400 = $3880.69 

Note: Different banks will calculate interest rates over different times,so be sure to check with your preferred lender how they calculate them.

Types of fixed rate car loans in Australia

Fixed rate car loans come in two main forms, secured and unsecured.

Secured fixed rate car loans

Most car loans on the Australian market are secured by the vehicle purchased with the loan. This means that the car you buy is used as security against the loan, and your lender can repossess your vehicle if you do not make your repayments. Lenders usually see secured car loans as less risky compared to unsecured loans, as they can sell the car to recoup their losses if you default on your repayments. 

Some lenders will only offer secured loans for certain makes and models, or cars under a certain age, to further reduce their financial risk. This means some used vehicles may not qualify under a personal loan lender's eligibility criteria.

Unsecured fixed rate car loans

If the car you’re buying doesn’t qualify for a secured loan, or if you prefer not to risk losing your vehicle, some lenders offer unsecured car loans. Unsecured loans do not require collateral against the loan, such as the car. However, as they represent greater risk to lenders, unsecured loans typically have higher interest rates than those on secured loans. 

Unsecured fixed rate car loans usually have stricter eligibility criteria too, such as more stringent affordability tests, and may only be offered to high income earners with steady income streams.

What to look out for with fixed rate car loans

A fixed rate car loan with a low advertised rate may seem to be the best option. However, it’s important to look further than the interest rates to calculate the total cost of your fixed rate loan.

A fixed rate car loan with a low advertised rate may seem to be the best option. However, it’s important to look further than the interest rates to calculate the total cost of your fixed rate loan.

  • The lowest interest rate is not always the cheapest

Even if a fixed rate car loan has a lower interest rate than its competitors, you’ll most likely still pay fees and charges in addition to interest costs. This could potentially make a low rate car loan more expensive than a higher-interest rate car loan with lower fees and charges. 

Let’s look at an example. Claire wanted to borrow $11,500. Lender A offers an 8% interest rate, with only a monthly fee of $5 and Lender B offers a 6% interest rate, but has multiple fees and charges throughout the loan term. Lender A actually works out $99 cheaper than Lender B, despite the 2% lower advertised interest rate.

LENDER ALENDER B
Loan Amount$11,500$11,500
Loan Term5 years5 years
Advertised Interest Rate8%6%
Monthly Repayments$233$222
Ongoing Fees$5/month = $300/total $10/month = $600/total 
Other Fees$0$450 
Total Amount to Pay$14,291 $14,390 

Source: RateCity Car Loan Calculator

  • Check the comparison rate

From July 2003, the Australian government made it mandatory for lenders to display a comparison rate alongside an advertised interest rate. This comparison rate includes most fees and charges on a loan, and bundles this with the advertised rate to give an overall interest rate, called the comparison rate. Comparing different comparison rates is a helpful guide to borrowers as it gives a more accurate understanding of what the total cost of the loan might be.

However, it’s important to note that even a car loan with a low comparison rate may have additional non-standard fees that are not included in this rate. Using the comparison rate as a guideline to narrow down your choices is wise, but make sure to ask about all the fees and charges on a loan before signing on the dotted line.

  • Fees and flexibility

Fixed rate car loans may offer a stable, simple repayment system. However, extra fees such as break costs may apply if you try to repay your car loan earlier than agreed. If you find yourself with extra funds available, and want to clear your debt with your lender, make sure you look at the fees associated with additional car loan repayments on a fixed loan. Repaying early may attract financial penalties, to ensure the lender recoups the loss of interest that an early exit brings.

Variable rate car loans tend to have more flexible arrangements than fixed car loans. If you want to make extra repayments, you may often be able to without charge. Loans that include the option to make additional repayments may also offer a redraw facility, so you may access any additional money you have paid on the loan if need be. 

Types of ongoing fees and charges that may be applicable include:

  • Application fees
  • Establishment fees
  • Extra repayment fees
  • Redraw fees
  • Early payout/Early repayment fees
  • Other service fees or account keeping fees
  • Car insurances, if purchased with the loan provider

  • High LVR on your car loan

A Loan to Value Ratio (LVR) is the percentage of money you borrow for a car loan, in comparison to the vehicle’s value. Some lenders have 100% loans available, where you borrow the full value of the car and don’t need a deposit. This may seem appealing, but often, a higher interest rate may be charged by lenders on such a loan compared to one with a lower LVR to account for increased financial risk. 

Before you sign up to a fixed interest rate car loan, check the lender’s terms and conditions, their Product Disclosure Statement (PDS), lending criteria and loan fact sheets. Only with all the financial information can you make an informed decision on which loan will work best for you.

How long can a car loan last?

The length of time you have to pay off your car loan, known as the loan term, generally ranges from 1 - 5 years, with some providers offering loans up to 10 years. 

When you take out a fixed rate car loan the interest rate is fixed for the entire length of the loan term. This is different to a fixed rate home loan, which typically last for 25-30 years, but offer 1- to 5-year fixed periods which may then revert to a standard variable rate. 

A car loan term will generally be a much shorter loan term than a mortgage, meaning it is more feasible for a lender to fix the interest rate for the duration of the term. Put simply, if your fixed rate car loan is on a 3-year term, the interest rate will be fixed for the whole 3 years.

While you will typically have the option to choose the loan term that best fits your budget, it's important to keep in mind that the longer your loan term, the more you will likely pay in interest charges over the life of the loan. 

On the other hand, your ongoing repayments may be lower on a longer loan term, regardless of your repayment frequency. Taking out a car loan on a 5-year term, for example, means the total loan amount will be spread over 5 years and repaid in regular instalments (weekly, fortnightly or monthly repayments) until the end of this period. In contrast, taking out a 2-year loan means you have a much shorter period of time to pay back that same loan amount, making the regular repayments higher.

When it comes to choosing between a shorter or longer loan term, the best option is the one that works for your individual needs. Consider using RateCity's Car Loan Calculator to get an estimate of how much your repayments might be on different loan terms.

Frequently asked questions

What is a fixed-rate loan?

A fixed-rate loan is one where the interest rate remains constant for an agreed amount of time. For example, if you take out a five-year fixed-rate loan at 8.75 per cent, the lender is obliged to leave your interest rate at 8.75 per cent for at least five years. By contrast, if you take out a variable-rate loan at 8.75 per cent, the lender can change the interest rate whenever it wants.

How to find a great car loan

Historically, finding a great car loan would require excess research ranging from visiting an excess of websites or making phone calls, but technology has moved on. Using RateCity, Australia’s leading financial comparison service, you can check out great deals from a range of lenders on the one site.

To start, select the amount you want to borrow and the length of the loan, narrowing your search to show just fixed or variable interest rate results.

Once you’ve indicated your search criteria, you’ll see an immediate list of lenders, ranked by interest rate or application fees. You’ll also be able to view the monthly repayment amount for each result, helping you to know what you can afford.

Up to six products can be compared side-by-side, complete with more information about each car loan, giving you more information about your options.

When comparing your car loan options, it’s ideal to keep in mind some points find a great car loan for your needs. Consider the following:

  • Choosing a low interest car loan can reduce costs
  • Selecting an option with low fees and charges is ideal, because these can really add up
  • Be aware of penalties, such as early exit penalties if you pay off the loan sooner than expected
  • Consider the features that best suit your situation

There are many ways to ensure that you get a great car loan. Ultimately, you’ll end up with the best deal by doing your research and selecting the most suitable product for you.

What is a variable-rate loan?

A variable-rate loan is one where the lender can change the interest rate whenever it wants. For example, if you sign up for a variable-rate loan at 8.75 per cent, the lender might change the interest rate to 8.90 per cent the month after and then 8.65 per cent the month after that. By contrast, if you take out a five-year fixed-rate loan at 8.75 per cent, the lender is obliged to leave your interest rate at 8.75 per cent for at least five years.

Where can I get a student car loan?

Student car loans are not a necessarily a product in and of themselves, but what you may be looking for is a guarantor car loan.

A guarantor car loan has a third-party act as a form of guarantee for your loan application, telling the bank or lender that if you default on your loan, someone will pay the loan repayments.

Going guarantor on a car loan is no new thing, and before internet-based credit scores, guarantor car loan applicants would apply for loans with a guarantor or property owner who could vouch for the person borrowing the loan.

To get a guarantor car loan, you’ll need someone willing to act as a guarantor for your car loan.

What is an unsecured car loan?

An unsecured car loan is a loan that is not connected to a form of security, or collateral. Not all lenders provide unsecured car loans – and if they do, they generally charge higher interest rates for their unsecured car loans than their secured car loans.

What is a secured car loan?

A secured car loan is a loan that is connected to a form of security, or collateral. Generally, the security for a car loan is the car itself. If you fail to repay the loan, the lender might seize your car, sell it and then use the proceeds to recover their debt.

How to get a chattel mortgage?

Both businesses and individuals may use a chattel mortgage, provided that the car is being used predominantly for business purposes. 

To apply for a chattel mortgage, you need to first consider your options and choose a suitable lender that meets your requirements. Once you have selected a lender, you can apply for the loan online by filling out a form. If the lender doesn’t offer an online application process, you can either call them or visit their nearest branch. 

After you’ve applied, the lender will ask you to supply documents that confirm your identification, income, job profile, etc. If everything is in order, most lenders will arrange the loan’s settlement, so all you need to do is pick up your car!

Can you get a chattel mortgage with bad credit?

Getting approval for a chattel mortgage with bad credit may be possible, given ‘chattel’ (usually a piece of equipment or car) is put up as security for the loan. That means if you fail to repay the loan, the creditor can recover the loaned amount by repossessing and selling the car or piece of equipment. This differs from unsecured car loans, where the asset is not tied to the loan and cannot be taken if you don’t meet the repayments. 

How much can I get towards a new car as a single parent?

It really depends on your financial circumstances as to how much a lender will grant you towards a new car as a single parent. With most lenders, the smaller the loan you apply for, the higher your chances are of approval, so getting a cheaper car or adding some savings of your own, may be a valid option if you are struggling for approval on a car loan.

Can I get a car loan if I am on disability benefit?

Yes, there are some lenders who will consider your application if you are on a disability pension. As long as you have an income, usually of over $400 a week, there are lenders that are willing to supply you with a loan. There are also microfinancing charitable organisations that provide low interest loans for people on low incomes for certain necessary amenities, such as cars, if they match the specified criteria.

Can I get a loan if I am on aged pension?

Yes, there are certain lenders that provide loans for people on aged pensions. Your viability for a loan will be assessed by a lender by your credit report and your income. They will also take into account any assets you have that you may want to secure the loan with. The better your credit score, the more likely you are to be accepted for a loan, and the lower the interest you will have to pay on that loan.  

If you have a bad credit rating and are on an aged pension however, don’t despair, because there are specialised lenders who still may be willing to provide you with a loan.

What is credit history?

Your credit history is a record of the dealings you’ve had with credit providers such as banks, credit card companies, mobile phone companies and internet companies. Your credit history records how successfully you’ve managed your repayments. It also records how many credit applications you’ve made and how many of those were rejected.

Credit providers refer to your credit history when deciding whether or not to extend you credit. Missing repayments is a bad sign; making too many applications or having applications rejected can also be a bad sign.

Credit infringements can remain on your credit history for five years – or seven years for serious infringements.

Are bad credit car loans legit?

Bad credit car loans are legit, although not all lenders and products are created equal.

Some car loan lenders refuse to do business with borrowers who have bad credit histories, but there are others that are willing to provide bad credit. There is a catch, though: some bad credit lenders are disreputable, while some bad credit loans have extremely high interest rates and fees.

That’s why it’s important to do your research and compare bad credit car loans before you submit an application.

 

Can you put a deposit on a car to hold it?

It’s up to individual car dealers to decide whether to promise to hold on to cars in exchange for deposits.

Some car dealers will request a deposit and promise, in return, to hold on to the car for a certain period of time. Others will request a deposit but make no guarantees, other than to return the deposit if they end up selling the car to someone else.

Some car dealers ask for deposits; others don’t. If you get asked for a deposit and you decide to pay it, make sure the dealer gives you signed paperwork before you make the payment and a receipt after you’ve made the payment.

Where can I find lenders who offer no credit check car loans?

You can find lenders who offer no credit check car loans through comparison sites like RateCity or by doing an online search.

One thing to bear in mind is that lenders who offer no credit check car loans are likely to charge higher interest rates and higher fees than on car loans that include a credit check. Also, lenders who no credit check car loans might expect you to pay a higher deposit. You might also be expected to provide security.

Lenders regard no credit check car loans as riskier than other car loans, which is why it’s a niche product that often features special conditions.

How do I get car loan approval from Bankwest?

Bankwest offers loans for cars that are less than seven years old or have a minimum value of $10,000. Loan terms are between three and seven years  at a fixed interest rate, with the option to make extra payments without any extra charges.

To apply for Bankwest car loan pre-approval, you’ll need proof of your identity and income. You’ll also need other documentation, such as insurance certificates and registration papers. 

Once you receive conditional approval and have selected your car, you may have to provide supporting documents to proceed to the next stage.

How to get pre-approval for your ANZ car loan?

Getting pre-approval on your car loan can give you a good idea of how much you may be allowed to borrow. This will help you set your limits while selecting your car. You can apply for pre-approval for an ANZ car loan by filling out a simple online application form, where you’ll have to submit relevant identity, employment and income documentation. 

ANZ will then conduct a credit check based on your application and documentation. It’s important to note that this could have an impact on your credit history. Based on your credit and income documentation analysis, ANZ will provide an amount they are willing to give you as a loan. After this, you can find the right car that matches the proposed loan amount and send it through your final loan application. 

It’s important to remember that pre-approval gives you an indication of how much you can borrow from ANZ to purchase your car, but it doesn’t guarantee the final approval. 

What is a chattel mortgage used for?

A chattel mortgage is usually used to buy an asset - such as a car - for your company for business use. Relatively similar to regular mortgages, a chattel mortgage structure is based on a lender providing you with funds to purchase an asset while registering their security interest on the Personal Property Securities Register (PPSR) for the life of the loan. In this case, the asset is known as the chattel. After the loan has been repaid, you will have full ownership of the asset. 

A popular finance option, a chattel mortgage is usually preferred by self-employed or small business owners, due to flexible options available for repayment. In some cases, you may get 100 per cent of the cost of the asset, which means that no upfront deposit needs to be put down.

However, it’s important to note that a chattel mortgage is not regulated under the National Consumer Credit Protection Act. It’s therefore important to seek advice about the product and fully understand the agreement terms before signing.

Where can I get a guarantor car loan?

There are multiple lenders who are willing to provide loans secured by guarantors.

If someone is willing to go guarantor for you and they meet the requirements set out by lenders, you can apply for guarantor finance online, over the phone, or in person.

Some banks also provide guarantor car loans, though because they’re larger banks, they may have higher interest rates than smaller lenders.

You may want to compare guarantor car loans at RateCity, and find a guarantor car loan ideal for your purposes.

What is a bad credit car loan?

A bad credit car loan is a car loan for borrowers who have ‘bad credit’ or a bad credit history.

Some lenders refuse to offer bad credit car loans, because they believe there is an excessive risk that bad credit borrowers will not repay their loans. However, other lenders are willing to provide bad credit car loans.

Generally, these lenders charge higher interest rates for bad credit car loans than ‘prime’ car loans, reflecting the higher level of risk. Bad credit car loans may also have higher fees than prime car loans.

However, the big advantage of a bad credit car loan is that it allows borrowers with bad credit to access finance. Another advantage is that it could help bad credit borrowers improve their credit rating, assuming they make all their repayments on time.