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LenderCar LoanInterest Rate Comparison Rate* Monthly Repayment Interest Type Vehicle Type Maximum Vehicle Age Ongoing Fee Upfront Fee Total Repayment Early Repayment Instant Approval Online Application TagsFeaturesLinkComparePromoted ProductDisclosure
5.99% p.a.
7.12% p.a.
$913
Variable
New
No Max
$8
$400
$32,851
 Rate drops by 0.25% on 4th March
  • Available for purchasing new and demo vehicles
  • $5,000 to $150,000 loan amount
  • Redraw facility available up to $5000/day
  • Required: Good credit history, stable employment history. Aus citizenship or PR.
 Disclosure
6.57% p.a.
7.19% p.a.
$920
Fixed
New
No Max
$0
$250
$33,135
  • No vehicle age limit
  • No ongoing or early exit fees
  • 1-7 years loan terms. Pay monthly, fortnightly, or weekly
 Disclosure
6.52% p.a.
6.95% p.a.
$920
Fixed
New, Used
No Max
$0
$350
$33,111
  • A leading Australian Finance Broker with proven experience you can trust
  • We've assisted more than 150,000 customers access over $8 billion in finance!
  • We are the experts at getting the keys in your hands
 Disclosure
6.24% p.a.
6.59% p.a.
$916
Fixed
New
No Max
$0
$250
$32,973
6.29% p.a.
6.75% p.a.
$917
Fixed
New, Used
No Max
$0
$225
$32,998
6.45% p.a.
6.72% p.a.
$919
Fixed
New
No Max
$0
$195
$33,076
6.48% p.a.
7.19% p.a.
$919
Fixed
New, Used
No Max
$5
$250
$33,091
6.29% p.a.
6.72% p.a.
$917
Fixed
New
No Max
$0
$0
$32,998
7.49% p.a.
7.90% p.a.
$933
Fixed
New, Used
No Max
$0
$295
$33,590
6.89% p.a.
8.02% p.a.
$925
Fixed
New
No Max
$8
$400
$33,293
  • Demo vehicles accepted up to 7,500km
  • 3-7 year loan terms available
  • Balloon option available for fixed rates
 Disclosure
More car loans
  • Available for purchasing new and demo vehicles
  • $5,000 to $150,000 loan amount
  • Redraw facility available up to $5000/day
  • Required: Good credit history, stable employment history. Aus citizenship or PR.

More details
Important Information and Comparison Rate Warning

All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here.

The comparison rates in this table are based on a loan of $30,000 and a term of 5 years unless indicated otherwise. The comparison rates for car loans and secured personal loans for the relevant amounts and terms are for secured loans unless indicated otherwise. The comparison rates for unsecured personal loans are applicable for unsecured loans only. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Comparison rates are not calculated for revolving credit products.

Monthly repayment figures are estimates only, exclude fees and are based on the advertised rate for the term and for the loan amount entered. Actual repayments will depend on your individual circumstances and interest rate changes. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

What is a secured car loan?

A secured car loan is one where the lender uses an asset (in most cases, the car you're buying) as security against the loan. This means that if you fail to meet your repayments, the lender has the right to sell or repossess the car in a bid to recuperate its funds.

Because of this back-up, secured car loans tend to come with lower interest rates, as lenders deem the loan to be less risky than if there was no security at all. A secured loan is the most common way to finance a car purchase in Australia because the loan will generally cost less compared to taking out an unsecured loan and lenders will generally allow you to borrow more.

As a borrower, you may also have the option of using another asset as security, such as term deposits, property, or other high-cost items (e.g. jewellery) - it doesn't always have to be your car.

How to compare secured car loan lenders and rates

Before you sign up to a car loan, it pays to compare what else is on the market. Here are the main considerations:

Interest rate and comparison rate

It goes without saying the interest rate is a primary consideration for any loan, but it's also important to check the comparison rate which reflects the interest rate as well as fees and charges. The comparison rate will give you a better idea of the overall cost of the loan.

While you're comparing rates, you'll also need to decide whether to go for a fixed or variable interest rate. A fixed rate means your interest rate will stay the same for the duration of your loan term. This can be useful if you're sticking to a budget or wanting to be sure exactly what payments you'll be making for the life of the loan. A variable rate can fluctuate at any time, so your repayments could go up or down.

Loan term

Typically, the longer the loan term, the smaller the monthly repayments although this usually means you'll end up paying more in interest charges. If you want to save as much as you can on interest and also want to pay off the car loan as soon as possible, a shorter loan term may be a better option.

However, if the higher monthly repayments are a stretch, a longer-term loan with more, but lower, payments might suit you better. Ultimately, choosing the right loan term for you all comes down to your personal circumstances.

Features

Some lenders offer handy features to help you pay off your car loan sooner and, thus, pay less interest such as the ability to make fee-free extra repayments. If you think you may have the capacity to put some more money towards your loan, it's wise to choose a lender that offers this option (without penalties incurred).

Another feature you may want to consider is a redraw facility. This allows you to redraw any extra repayments from your car loan in case of an emergency. Keep in mind though that some lenders may charge associated fees for this.

What are the pros and cons of a secured car loan?

Pros

  • Lower interest rates. Secured loans typically come with lower interest rates which can keep your repayments more manageable. This is because the lender has the ability to repossess the car (or other secured asset) in the case you default on your loan.

  • Easier to be approved. Because the lender has the ability to recoup their debt in the event of a default by repossessing the car, the loan application and approval process can generally be a relatively quick and easy process.

  • More lenders to choose from. Because secured car loans are seen as less risky, there are generally more lenders offering a wider variety of loans, features, and conditions.

Cons

  • Age of car. Some lenders only offer secured car loans for brand new cars or used cars under a certain age (generally between 5-12 years old, but this will depend on the lender). This can restrict the type of car you're able to purchase.

  • Car will depreciate faster than the loan balance. If you buy a new car with a secured car loan, bear in mind its value will go down markedly as soon as you own it. This potentially leaves you with a loan amount more than your car is worth.

  • Risk of losing your vehicle. Simply put, if you can't meet your loan repayments for any reason, you stand to lose your car.

  • Limited loan amount. You'll generally only be able to use the loan amount to purchase the car without any add-ons such as covering the cost of insurance, registration, or vehicle upgrades.

See also: Secured vs unsecured car loans

What happens if you default on your repayments?

Using your car as security for a loan can be a good strategy to secure a lower interest rate, but it also means you stand to lose your car if you fail to repay your loan.

So, what does it take for a lender to repossess your car? First up, a lender can't repossess your car, or other asset, if you owe less than $10,000 or 25% of the loan total (whichever is lower).

But if you owe more, the process can depend on what state or territory you live in. A lender must have sent a notice giving you 30 days to pay the overdue amount. If 30 days passes and you haven't paid - or made other arrangements to pay - the lender has the right to repossess your car.

From there, the rules surrounding repossession vary between jurisdictions. The key message is that if you have fallen behind on your loan payments, you need to act quickly to contact your lender and make alternative arrangements.

But if you think taking out an unsecured loan lets you sidestep the consequences of default, think again. You could still face legal action and be chased by a collections agency. Your credit history will have also have a black mark recorded against it, affecting your credit rating and making it more difficult for you to access credit products in the future.

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Frequently Asked Questions

In most circumstances, a secured loan will make more sense than an unsecured loan.

In some cases, an unsecured loan may be a better option, especially if the car you’re looking to purchase doesn’t meet a lender’s eligibility criteria, such as being too old or in poor condition. An unsecured loan might also be preferred if the car is a gift for someone and you don’t want the recipient to be at risk of losing the car should you fail to meet the repayments.

Secured loans are generally easier to access as a borrower because the lender has the reassurance that if you default on the loan, the asset (often the car) can be repossessed.

Secured car loans are a win-win for you and your lender - you usually can access the car faster, and with a cheaper rate, while your lender has the reassurance it can recover any losses should you default.

The most common form of a secured car loan is where the car is listed as the security (a.k.a. collateral) on the loan. This means if you can’t make the repayments, the lender has the right to repossess the car.

Having this security lowers the risk of loss to the lender, which is why lenders generally offer lower interest rates on secured loans compared to unsecured loans.

Note that any car that’s used as security for a loan is recorded on the Personal Properties Securities Register (PPSR) as having an encumbrance over it. For $2, you can conduct a search on the PPSR using a car’s VIN or chassis number to see if the car has a debt attached to it.

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Editorial Promise

Savings.com.au follows a strict editorial policy, so you can trust that we’re putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts who ensure everything we publish is objective, accurate and trustworthy.

Senior Finance Journalist

Denise Raward is a senior journalist with an interest in macroeconomics, property, and personal finances. She has worked extensively across mainstream media organisations and lectured at Queensland University of Technology, Griffith University, and Bond University. She holds a Bachelor of Business - Communication, a Master of Arts, and RG 146 financial certification in Generic Knowledge, Securities, and Regulation. Joining Savings.com.au in January 2024, Denise strives to deliver financial information in everyday language to help Australians to better understand how to manage their own – and their families' – ongoing financial health.

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