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Showing car loans for
$
over
Advertised Rate

3.97

% p.a

Fixed

Comparison Rate*

4.51

% p.a

Company
Monthly repayment

$552

Loan amount

$5k to $100k

Total repayments
Real Time Rating™

3.97

/ 5
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Awards

Winner of Best Green Car Loans, RateCity Gold Awards 2021

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Advertised Rate

4.67

% p.a

Fixed

Comparison Rate*

5.22

% p.a

Company
Monthly repayment

$562

Loan amount

$5k to $100k

Total repayments
Real Time Rating™

3.62

/ 5
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Awards

Winner of Best Used Car Loans, RateCity Gold Awards 2021

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Product
Advertised Rate

From

4.47

% p.a

Fixed

Comparison Rate*

5.28

% p.a

Company
Monthly repayment

$559

Loan amount

$2k to $250k

Total repayments
Real Time Rating™

3.83

/ 5
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Advertised Rate

Headline rate From

6.99

% p.a

Fixed

Comparison Rate*

7.91

% p.a

Company
Monthly repayment

$594

Loan amount

$5k to $55k

Total repayments
Real Time Rating™

2.82

/ 5
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Car loan lenders we compare at RateCity

Learn more about car loans

There are many ways to obtain financing for a new car, and most people are familiar with the concept of personal loans to buy many types of transport, including cars, boats and motorbikes. One method of car finance that can be particularly useful for you as an employee, and for your employer too, is novated leasing. This type of car leasing is often thought to be solely for business owners or for fleet cars, but that isn't the case. Novated leasing is an alternative way of financing a car that many can take advantage of, and can give tax benefits that significantly reduce the net cost of purchasing and running a car.

How does novated leasing work?

Novated leasing works when a lender facilitates an arrangement between you and your employer so you can divert some of your pre-tax salary towards buying your car and the costs of running it, which could mean considerable savings for you. You can benefit even if you don't own a business, only want the car for private use and have a low annual mileage. You could also use a novated lease to buy a used car, and you can take advantage of one whatever your level of taxable income.

Why do people use novated leasing?

Saving money is the primary goal of most car buyers, and if you're saving tax at the same time, then it may well be worth exploring your options with lenders and your employer. When an agreement is set up between the three parties, your employer will make salary deductions (known as salary packaging or salary sacrifice) for your regular lease payments that will be a combination of your income pre-tax and post-tax.

What are the main features of a novated car lease?

Novated leasing means you can get the car you need while also paying less tax. You can get your car running costs bundled into the lease deal, so as well as the purchase price, your single salary deduction can include fuel, insurance, servicing, tyres and even roadside assistance. You can maximise your tax savings and cut out the hassle when you have to budget for your running costs. As with any form of car leasing, you should compare the options available and be comfortable about interest rates being charged, any fees or hidden expenses in the package, and that you can afford to have a part of your salary taken as a repayment every month.

What are the pros and cons of a novated car lease in Australia?

It's important to examine the small print of any lease agreement, and to discuss with your employer and the finance company what the implications are in terms of interest rates and lease term. You should also check on the eligibility of the vehicle, the kilometres you will travel and other factors to ensure you will be entitled to tax concessions.

Here are some of the potential benefits and disadvantages that are worth weighing up before deciding what's right for you:

  • Can be an ideal way to purchase the vehicle that best suits your work and personal circumstances, while enjoying income tax benefits.
  • You can salary package your car running costs into the lease deal, reducing your taxable income further.
  • Bundling the running costs into your car lease can also make budgeting more simple.
  • At the end of the lease, you won't own the car as you would with a car loan.
  • Depending on the terms of the lease, you may not have the option to choose your own insurance, meaning you could be stuck paying for an expensive car insurance policy.
  • If you lose your job, you would also likely lose the benefits of tax deductions.

Frequently asked questions

What is a novated lease?

A novated lease is a car lease that is ‘novated’, or transferred from one party to another. Novated leases are often used when companies provide a car as part of a salary package. The employer signs for the lease and makes the lease payments, but the employee assumes the responsibility of looking after the car. While most car leases involve two parties, novated leases involve three – employer, employee and financier.

What is a car lease?

A car lease, also known as an asset lease or finance lease, is an arrangement by which a finance company buys a car on your behalf. You get to borrow the car in return for making regular payments to the financier. At the end of the lease, you can either buy the car or hand it back. 

What is an asset lease?

An asset lease, also known as a finance lease or car lease, is an arrangement by which a finance company buys a car on your behalf. You get to borrow the car in return for making regular payments to the financier. At the end of the lease, you can either buy the car or hand it back.

What is a finance lease?

A finance lease, also known as an asset lease or car lease, is an arrangement by which a finance company buys a car on your behalf. You get to borrow the car in return for making regular payments to the financier. At the end of the lease, you can either buy the car or hand it back. 

What is an operating lease?

An operating lease is an arrangement by which a company leases a car from a vehicle fleet supplier for a set period. It’s a bit like a long-term car rental in that the company gains access to the car but the supplier retains ownership. Companies like operating leases because they are tax-deductible and because they save the company from having to make a large upfront payment to buy a car.

How much is your car worth?

If you already own a car, you could potentially bring down the cost by selling your car in the process. Before that happens, though, you’ll need to find out how much your car is worth.

One of the first places to find this value is to research the value of your current car, giving you an idea of roughly how much it’s worth in its peak condition.

There are plenty of websites that offer a free online valuation, allowing you to enter your car’s make, model, year, badge and description, with results listing a price guide based on both selling your car privately and through a dealership.

Of course, dealerships will try to profit on your trade-in by buying it for less than they can sell it, making it highly unlikely that you’ll get the same price selling a car to a dealer as you would selling a car privately.

However, private car sales can be costly and can take months to sell, making car trading more convenient with a guaranteed return, even if you may not be able to realise the total value of your car’s worth.

Remember that everything is negotiable. If the dealership is offering you less for your trade than you wanted, try to negotiate elsewhere to gain that money back. Start by negotiating on the price of the trade and then ask them if they can give you a further discount on your new car.

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 is my car worth?

If you own a car, it may be something that can help you bring down the cost of your next vehicle purchase through its sale. However, before you can do that you’ll want to find out how much your car is worth.

Your car’s worth can depend upon various aspects, including:

  • Age
  • Condition
  • Model and make

A great starting place for aspects of this includes websites that offer online valuations, allowing you to enter your car’s make, model, year, badge and description, with the listed results displaying a price guide based on both selling your car privately and through a dealership.

Both have pros and cons, as cars can be very profitable, something that will no doubt impact any chance you have to make the most of your car’s value upon sale. Dealerships will try to profit on your trade-in by buying it for less than they can sell it for, so you shouldn’t expect the same price selling a car to a dealer that you would necessarily get selling a car privately.

What is salary packaging?

Salary packaging is an arrangement you can make with your employer that can allow you to buy a car from your pre-tax salary. The advantage of salary packaging is that it will redue your taxable income.

Can I buy a car as a student?

Buying a car is a huge financial decision, and shy of marriage and purchasing a house (or perhaps around the world travels), it may be the biggest financial decision you make. But if you’re looking at your empty pockets, don’t despair! Your dream of owning your own car could become a reality, if you look for and compare the right car loans for your circumstances.

How do you get a car loan?

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.

Can I get a car loan with poor credit?

Poor credit doesn’t necessarily mean you won’t be able to get finance for your car purchase, though your options aren’t likely to be the same as someone with good credit.

In fact, a number of specialist lenders exist offering car finance for customers with poor credit, able to provide access to bad credit car loans.

However having a history of poor credit will likely mark you as a potential risk to lenders, so your car financing needs could see higher fees and interest rates. Alternatively, consider a secured car loan, which is a type of loan that uses the car you purchase as collateral, reducing the risk.

Other options include getting someone close to act as a guarantor for your car loan, or to talk to a broker about a personalised rate specific to your circumstances.

What is a car loan?

A car loan, also known as vehicle finance, is money that a consumer borrows with the express purpose of buying a vehicle, such as a car, motorbike, van, truck or campervan. Car loans can be used for both new and used vehicles.

What is the luxury car tax?

The federal government imposes a luxury car tax of 33 per cent on the value of a car above a threshold. As of the 2017-18 financial year, that threshold was $75,526 for fuel-efficient vehicles and $65,094 for other vehicles. So a fuel-efficient car worth $80,000 would be taxed only on the difference between the threshold and the value of the car ($4,474), rather than taxed on the entire $80,000. Similarly, an ordinary car worth $70,000 would be taxed on the $4,906 above the threshold, rather than the entire $70,000. The luxury car tax is paid by dealers that sell or import luxury cars, and also by individuals who import luxury cars.