There’s nothing quite like a brand-new car. The look, the feel, the unmistakable new car smell… even if buying a new car costs a little more, it’s often money well spent.  

To help you impress your friends by showing off your brand-new car, RateCity compares a variety of car loans on feature and fees, which can help you choose a new car loan that perfectly suits your finances. 

Find and compare new car loans

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3.97%

Fixed

4.51%

loans.com.au

$552

$5k to $100k

4.85

/ 5
More details

4.05%

Fixed

5.63%

Stratton

$553

$10k to $250k

3.76

/ 5
More details

4.65%

Fixed

4.99%

People's Choice Credit Union

$561

$20k to $100k

4.41

/ 5
More details

3.85%

Variable

5.43%

Credit One

$550

$10k to $250k

3.96

/ 5
More details

8.14%

Variable

9.44%

Macquarie Bank

$610

$10k to $250k

2.23

/ 5
More details

From

3.60%

Variable

4.51%

Australian Military Bank

$547

$4k to $80k

4.98

/ 5
More details

From

4.40%

Variable

4.88%

ebroker.com.au

$558

$5k to $150k

4.49

/ 5
More details

From

3.85%

Variable

4.94%

Finance Ezi

$550

$10k to $250k

4.34

/ 5
More details

4.80%

Variable

4.94%

First Choice Credit Union

$563

From $30k

4.40

/ 5
More details

Learn more about car loans

What counts as a ‘new’ or ‘used’ car?

Different lenders use different definitions of ‘new’ and ‘used’ cars. For example, a lender may count any car less than two years old as “new”, whether it’s come straight from the factory, or if it’s had previous owners.  

Lenders consider new cars to be less financially risky than used cars, because they’re less likely to break down and be written off. This means many lenders will offer lower interest rates and more flexible features on new car loans than on used car loans. 

Are there drawbacks to new car loans? 

New cars are generally more expensive than used cars, so you may need to borrow more money to buy one. A bigger car loan may take longer to pay back, and cost you more in interest.  However, new car loans tend to have lower interest rates than loans for used cars.  

Fees and other charges will vary between new car loans. To get a better idea of a car loan’s overall cost, including the interest rate and fees, look at its ‘comparison’ rate, which combines the advertised rate and the main fees, including upfront and ongoing fees. 

Fixed rate vs variable rate car loans

Fixed rate car loans lock the borrower into the same interest rate and repayments over the life of the loan term. Fixed rate loans can 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.  

While the benefit of a fixed rate car loan lies in unchanging repaymentsthis is also a disadvantage. If your lender cuts interest rates, this will not be passed on if your loan is fixed, only to borrowers on variable loans. Fixed rate loan 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. 

A variable car loan has an interest rate that may rise or fall over the life of the loan. If it falls, your interest cost will drop and you may be able to save some money or get ahead on your repayments. But if interest rates rise, your costs will go up. However, variable rate loans are more likely to offer flexible features and benefits such as the ability to repay your loan early without penalty 

What to look for when comparing new car loans

Extra repayments and redraw facilities 

If you can afford to pay extra money on your car loan, you will pay off your loan more quickly and pay less in interest costsHowever, not all lenders let you make extra repayments or exit a car loan early. Some will charge you fees for the privilege. Some car loans also include a redraw facility, which lets you withdraw any extra repayments from your car loan. 

Encumbrance/PPSR Check Fee 

Unless you’re buying a new car straight off the showroom floor, it could have money owing on it from a previous owner, also known as a financial encumbrance. To avoid surprises when buying a used car, even if it’s relatively new, get a report from the Personal Property Security Register (PPSR), which used to be called a REVS check. You can handle this yourself, or your lender may handle it for you, though they may charge a fee.  

100% car loans 

Because new cars can cost more than used cars, saving up a deposit for a new car loan may be harder. Some lenders offer high Loan to Value Ratio (LVR) car loans, where you make a smaller deposit and borrow a greater percentage of the car’s value. There are also 100% loans available, where you pay no deposit and borrow your new car’s full value. Because no-deposit car loans are riskier to lenders, these loans tend to charge higher interest rates than other new car loans.