Car Finance Options: Loans, Leases and More

Every way to finance a car

Car finance is the umbrella term for borrowing to buy a car. Most people end up with a secured car loan, but it isn't the only way, and the right one depends on the car, how you'll use it and whether it goes through a business.

If you already know a standard car loan is what you're after, compare car loans here. Otherwise, here's how the main options work.

Secured car loan

The car is the security for the loan, which usually means a lower rate than borrowing without security. It's the most common way to finance a car, new or used, from a dealer or a private seller.

Compare car loans

Unsecured personal loan

Nothing is held as security. It can suit older cars some lenders won't secure against, or buyers who want the car free and clear. Rates are usually higher.

Personal loans

Chattel mortgage, through your ABN

For a car used mostly for business. The business owns the car from day one and the lender holds a mortgage over it. GST-registered businesses can often claim the GST on the price, so check with your accountant.

Business vehicle finance

Novated lease

A three-way arrangement between you, your employer and a financier, with repayments taken from your pay. It can work well for electric cars, but only if your employer offers it.

Electric vehicle loans

Dealer finance

Arranged at the dealership when you buy. It's convenient, but you only see the lenders that dealer works with, and the rate can carry a markup. Compare before you sign.

Dealer finance vs a broker

A balloon payment

Not a loan type, but an option on most of them: a lump sum left owing at the end. It lowers your regular repayments, but you pay more interest over the term.

Balloon payments explained

Which car, which lender

New or used, dealer or private sale. Most lenders fund all four. On a private sale your broker checks the PPSR, the national register that shows whether money is still owing on the car, before you hand over the money. Private sale car finance
Electric and hybrid. Some lenders offer a lower green car rate on EVs, and some are still cautious about the battery on older ones. Electric vehicle loans
Classic and vintage. Many mainstream lenders stop at a vehicle age limit. Specialist lenders lend on an agreed value instead, so age isn't a deal breaker. Classic car loans
4WDs and touring rigs. Bull bars, canopies, suspension and other accessories can usually go in the same loan. 4WD finance

What lenders look at

Your income and job. How long you've been there, and whether you're full time, casual or self-employed.
What you already owe and spend. This decides how much of a repayment you can comfortably carry.
Your credit history. Including any defaults and how many credit enquiries you've had lately. How your credit score affects your rate
The car itself. Its age and value, and whether it's a dealer or private sale.
Any deposit or trade-in. It lowers the amount you borrow. Do you need a deposit?

Questions people ask

Is car finance the same as a car loan?

A car loan is the most common type of car finance, but car finance also covers personal loans, chattel mortgages, novated leases and dealer finance. If a standard car loan is what you want, compare car loans here.

Will comparing hurt my credit score?

No. Comparing here doesn't touch your credit file. A hard credit check only happens once your deal has been vetted with a lender and you're going ahead.

Do I need a deposit?

Not always. Plenty of lenders will fund the full price for the right applicant, but a deposit or trade-in lowers what you borrow and your repayments.

How long can a car loan run?

Usually one to seven years. A longer term means smaller repayments but more interest overall. Choosing a loan term

How fast can I get approved?

Approvals can come through in as little as 10 minutes, and most land within 24 hours once your broker has everything they need.

General information only, not financial advice. Your broker will talk you through what suits your situation.