Compare new car loans
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.
A flexible car loan from $5,000 - $50,000 with personalised rates and rewards for strong credit customers.
Find and compare new car loans
Go to site
$5k to $50k
Discounted Personal Loan (Car Loan)
$20k to $100k
Car Loan (New)
$5k to $100k
$10k to $150k
Personal Loan Fixed
$5k to $50k
$10k to $100k
Unsecured Personal Loan
$4k to $50k
Unsecured Personal Loan
$5k to $55k
Unsecured Personal Loan Fixed
$5k to $55k
$5k to $50k
Today's top car loans products
Find popular car loans lenders from a wide range of Australian. View All >
The latest in car loans news
Lenders getting increasingly personal with their car loans
A growing number of car loan lenders are offering personalised interest rates.
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 repayments, this 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 costs. However, 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.
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.
There’s no set number. That’s because borrowing capacity differs from person to person, as well as lender to lender.
Lenders don’t give out car loans unless they’re confident they’ll be repaid. Each person is different, so the amount of money one person can successfully borrow will differ from another person’s number. Also, each lender uses its own formulas to calculate borrowing capacity – so Mr & Mrs Smith might find that while Lender X will give them a car loan for $20,000, Lender Y will offer only $18,000.
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.
A car loan calculator is an online tool that helps consumers understand how much they would have to repay under different scenarios. Consumers can create these different scenarios by entering different borrowing amounts, interest rates, loan terms and repayment schedules into the car loan calculator.
Mark Bristow is a senior financial writer for RateCity and an experienced analyst, researcher, and producer. Working for over ten years, Mark previously wrote and researched commercial real estate at CoreLogic, and has seen articles published at Lifehacker and Business Insider, among others. Most recently, Mark has joined RateCity working across finance as a whole. Whatever the topic, Mark’s goal is always to provide simple solutions to complex problems.