If you’re shopping around for a new or used vehicle, there are several prominent finance brokers offering some of the cheapest car loans in Australia.
Credit Concierge, Credit One, 360 Finance and Stratton Finance have car finance available with advertised rates starting from 4.79 per cent.
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The big four banks, by comparison, have significantly higher car loan interest rates.
That includes car loan interest rates of 8.49 per cent (comparison rate 9.54 per cent) for Commonwealth Bank, 8.49 per cent (9.67 per cent) for Westpac, 12.45 per cent (13.32 per cent) for ANZ and 12.69 per cent (13.56 per cent) for NAB.
Low interest rates aren’t everything
Car loan interest rates can sometimes be misleading, because some Australians will be unable to qualify for a provider’s lowest advertised rate. Some borrowers, who are regarded as riskier, may be forced to accept higher interest rates. This can occur when the borrower chooses an unsecured car loan, where the vehicle is not used as security against the loan in case the borrower defaults.
Borrowers should also remember that the car loan with the lowest interest rate won’t necessarily be the best car loan for your situation. Factors such as fees, loan features and customer service are important to consider when you compare car loans.
How do car loan brokers work?
Finance brokers work with a panel of lenders, which might include anywhere from five to 20 different financial institutions.
Unlike the banks, or smaller lenders that only offer their own financial products, brokers will recommend one or several different options from their panel, based on your financial position and your goals. This provides you with greater choice as to which is the best lender for your exact situation.
Finance brokers will then manage the car loan application process on your behalf, and work with you to get your car loan application approved.