Compare Car Loans

One size rarely ever fits all, so why should a car loan? Compare car finance deals from around Australia and save with us today.

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Last updated on July 6th, 2022 at 04:36 pm by Thomas Perrotta

Compare car loans

Compare over 25 lenders

One size rarely ever fits all, so why should your car loan? Car loans should fit your needs, not the other way around. At Savvy, we help Australians from around the country find the best car loan to purchase their ideal vehicle, with over 25 reputable lenders counted amongst our panel.

We use the latest technology and offer a high level of expertise so you can compare car loans from top Australian lenders faster and easier. Gain the Savvy advantage and compare your next car loan today. There’s no obligation to apply.

Compare and save

We help you compare car loans with flexible repayment options, from extra repayments across your loan term to the ability to choose between weekly, fortnightly or monthly repayments.

Buy just about any car you like, with private sellers, dealerships and wholesalers all available to finance a new or used vehicle purchase from. With a wide range of finance options to choose from, enjoy the freedom to choose with Savvy.

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Your estimated repayments

$98.62

Total interest paid: $1233.43
Total amount to pay: $5,143.99

Learn more about comparing car loans

How do I compare car loans?

It’s crucial to compare car loans, as doing so will give you the best chance of finding the right one for your needs and maximise the likelihood of securing an affordable deal. There are many ways you can go about comparing car loans, so it’s important to consider each of these areas when choosing your loan and lender:

Qualification criteria

Before all else, you should make sure you meet the eligibility criteria set in place by your lender. This will save you from taking the time to prepare and submit an application, only to be rejected immediately because you don’t meet one or more of the qualification points. When you apply through Savvy, your dedicated consultant will make sure you meet all your lender’s criteria before proceeding with your application. While points may differ between financiers, the main criteria to meet on car loans are:

  • You must be at least 18 years old at the time you apply
  • You must be an Australian citizen or resident when you apply (although some lenders may be able to approve applications for temporary residents)
  • You must be employed in a stable job, such as permanent full or part-time. If you’re a casual employee, you’ll typically need evidence of at least six months of stable hours and income, while self-employed workers will need to have been operating for at least one year (although some lenders may require two years of trading)
  • You must be earning at least $26,000 per year, although some lenders will set their requirements at a higher level
  • You must have a good credit history to qualify with most lenders, with no record of defaults, bankruptcies or debt agreements (there are lenders who we can connect you to if you have bad credit, however)

Interest rates

Your car loan interest rate will form the most substantial cost factor throughout your agreement. It’s crucial to secure as low a rate as you can, as even a small difference in rate can lead to a substantial saving overall. The table below demonstrates how much of a difference small rate decreases can make to your loan repayments:

Loan size Loan term Interest rate Monthly repayments Total interest Overall saving
$30,000
Five years
7.5% p.a.
$601.14
$6,068.31
N/A
$30,000
Five years
7% p.a.
$594.04
$5,642.16
$426.15
$30,000
Five years
6.5% p.a.
$586.98
$5,219.07
$849.24
$30,000
Five years
6% p.a.
$579.98
$4,799.04
$1,269.27

Your Savvy consultant, during the process of comparing the best options available to you, will search for the lowest available rate to help you save overall on your agreement.

Fees

It isn’t just interest which will add to the cost of your car loan, but also fees. There are several different fees which can apply, although not all lenders will charge all (or any of these). When you apply through Savvy, your consultant may be able to help you get certain fees waived as part of the agreement, as some lenders are more willing to negotiate on these costs. Some of the main costs to look out for include:

  • Ongoing fees: charged monthly up to $20
  • Establishment fee: one-off charge of up to $600
  • Early repayment fee: if you pay out your loan ahead of schedule, you may have to pay this fee of up to $600 to $900 (although this depends on the size of your loan, your interest rate and how long is left to run on the agreement)
  • Late payment fees: charged for late/missed instalments, costing up to $50 each

Loan terms

While most car loans range from one to seven years in length (with five being the most common term secured by borrowers), not all lenders will offer the same range of potential terms. You may come across some lenders who require borrowers to take out a loan over a minimum of two or three years instead, while other financiers will cap their available terms at five years. If you find yourself wanting to take out a particularly short or long-term loan, it’s crucial to consider this aspect of your lender. Your Savvy consultant will make sure to filter out any other offers which don’t align with your term preferences in the comparison process.

It’s important to appreciate how much a loan term can affect the amount you pay overall. Although your monthly repayments will be lower, longer terms will almost always result in a more expensive deal. The table below demonstrates how different term lengths can impact the cost of your car finance agreement:

Loan size Loan term Interest rate Monthly repayments Total interest Overall saving
$30,000
Five years
6% p.a.
$579.98
$4,799.04
N/A
$30,000
Four years
6% p.a.
$704.55
$3,818.44
$980.60
$30,000
Three years
6% p.a.
$912.66
$2,855.69
$1,943.35

Minimum required loan size

Similarly, not all lenders will offer the same size loans as one another. While there generally aren’t any maximum loan amounts put in place (as this can vary depending on the value of your car and your borrowing power), different minimum requirements may apply. For example, while there are lenders who can accept applications for as little as $2,000, others may impose a higher minimum of $5,000. Once again, your Savvy consultant will ensure that you’re matched with a lender who can accommodate your required loan size, particularly if it’s only very little.

Vehicle eligibility

Finally, you’ll have to ensure the vehicle you’re purchasing fits within your lender’s requirements. The most significant requirements relate to its age and condition, with many lenders being particular about how old the car is at the point of purchase. At Savvy, we can help you get approved for cars up to 20 years or older with some of our flexible lending partners. Not all lenders will give the green light to purchase a vehicle which has been written off in the past, but some of our finance partners can help you do just that. Your consultant will match your car with the best financier suited to your vehicle.

Which types of car loan can I compare?

There are several different types of car loans for you to consider when comparing your options. Depending on your borrowing profile, you may find that one or more of these are better suited to your needs and situation. The ways you can finance your vehicle include:

Secured car loan

The standard and most common type of car finance, a secured car loan uses the purchase of the car itself as collateral for the agreement. This means that in the unlikely event you become unable to keep up with your repayments, your lender can obtain and sell off your vehicle as a means of recouping lost funds. However, overall, secured agreements are much more beneficial to borrowers, as they tend to offer lower rates and higher borrowing ranges. These come with fixed interest rates to ensure your repayments remain the same and are easier to budget around.

Unsecured car loan

If your vehicle doesn’t meet standard qualification criteria, you also have the option to take out an unsecured car loan. This is essentially a personal loan, which allows you to use your funds just about however you like. These can either come with fixed or variable interest rates, the latter of which could help you save if rates fall during your agreement but will cost more if they rise. Because these are seen as less safe than secured loans, they come with higher rates and lower borrowing ranges (generally up to $75,000), although they’re often able to be processed more quickly.

Chattel mortgage

If you’re running a business and are looking to purchase a vehicle for commercial purposes, you might look to a chattel mortgage. This is, in many ways, the same as a car loan in terms of its repayment structure and ownership. However, there are several distinct differences between the two. Firstly, you can choose to attach a residual payment, which is essentially a lump sum at the end of the loan, on top of a potential deposit. Chattel mortgages also come with numerous tax benefits as a form of commercial finance, enabling you to claim interest, GST and depreciation on tax.

Low doc car loan

In the event your business doesn’t have the tax returns it needs to qualify for car financing, you can also look to low doc finance. This enables business operators to utilise alternative documentation when applying for the loan, which can include the following:

  • Your last two quarters’ worth of BAS
  • Business bank statements from the past six months
  • Signed declaration of your business’ revenue
  • Signed letter from your accountant to confirm projected revenues for the future

Even without some or all of these, though, many lenders assess applications on a case-by-case basis, so you may find you can be approved in some situations.

How do I maximise my chances of car loan approval?

Some of the many ways you can increase the likelihood of car loan approval are:

  • Apply with Savvy: by placing your application in the hands of your trusty consultant, we can draw on our vast knowledge and experience (as well as our state-of-the-art technology and extensive panel of partnered lenders) to help find you the best loan available without having to guess which lenders can approve you.
  • Work on your credit score: the better your credit score, the better your chances of approval. Lenders look to your score as an indication of your trustworthiness as a borrower, so a record of repaying everything on time will help your chances. This is especially the case if you’ve paid off similar car or personal loans in the past.
  • Avoid job changes: part of ensuring your income is stable and consistent is looking at your employment history. If a lender sees regular job changes, they’re less likely to approve you, as you’re at greater risk of seeing your income stream run out than someone who has held down the same job over several years.
  • Borrow within your means: of course, you should only ever apply to borrow an amount over a period which is manageable for you. Overreaching in the application process and applying for more than you can comfortably afford could lead to delays in the process while lenders prepare counteroffers or an outright rejection. When applying with Savvy, your consultant will always ensure the loan you’re applying for is manageable for you.

Why are comparison rates important to compare?

Calculating how much a car loan costs isn’t as straightforward as punching the interest rate into a loan calculator. You can only know how much a loan will cost when a lender shows you the comparison rate, which incorporates the cost of the main fees you’ll pay across your loan term into the percentage figure.

For example, let’s say you’re looking for a car loan of about $25,000. You have two car loan offers in front of you, which both have five-year terms. Loan A has a base interest rate of 4.95% p.a., while Loan B has a base rate of 5.75% p.a. Though Loan A has the lower interest rate, its comparison rate of 7.00% p.a. leaves it comfortably ahead of Loan B’s 6.25% p.a.

By the end of the term with Loan A, you will have paid $4,702 overall. Loan B, despite having a higher base rate compared to A, leaves you more than $500 better off ($4,174).

Comparison rates give you a better understanding of how much you’ll pay without having to manually factor in other charges. It also gives you more freedom in making a car loan calculation, to work out your budget and how much you can afford in repayments.

It’s important to note, though, that a comparison rate doesn’t show conditional fees triggered by certain events. Loan B may have much higher early repayment and late fees than Loan A but this isn’t included in calculations, as you aren’t guaranteed to see either of these during your repayments.

Top tips for getting a cheaper car loan

Choose a shorter loan term

The shorter your loan term, the less you’ll pay in interest overall. This is because you’ll be paying more towards your loan debt each instalment, causing your outstanding debt (which interest is calculated on) to decrease at a faster rate. Even slightly higher interest rates over shorter terms are likely to cost less. Shorter terms also cut down on the potential cost of ongoing fees.

Make a deposit

Of course, an up-front deposit will ultimately reduce the cost of your loan compared to finance covering 100% of your vehicle’s purchase price. For instance, a $5,000 deposit on a $40,000, five-year car loan at 6.5% p.a. would save you almost $900 overall. Lenders may also be more likely to offer you a reduced rate if you’re willing to put some of your savings towards the car.

Buy a new or near-new vehicle

While this may not have a significant impact on your loan’s cost, every little bit can count when looking to secure a cheaper car loan. Lenders tend to prefer either brand-new cars or those less than three years old when processing loan applications. You can still access great rates on used cars older than this when applying through Savvy, but newer cars could help you save.

Be a homeowner

Another area which lenders consider in the application process is whether you own any property or are otherwise asset-backed. While this doesn’t factor into the formal loan agreement as security or anything like that, lenders generally feel more comfortable and confident in borrowers who already own a major asset. If you’re in this position, you can benefit from a lower rate.

Your car finance comparison questions answered

What’s the difference between new and used car loans?

There isn’t too much of a difference with how new and used car loans are structured. The only real point that separates these products is that new car loans tend to have lower interest rates, but this isn’t always the case depending on the profile of the borrower.

The used car loan comparison process is likely to save you money on the cost of the car itself. Because these cars have depreciated in value, they’re often less expensive and come with more room to negotiate on price.

Can I choose my car’s insurance policy under finance?

Yes – because all cars purchased under finance are required to be covered by a comprehensive insurance policy, you can choose the policy to take out. This is useful if you’re looking to cut down on the cost of your policy, as you can compare between options to find the cheapest and most suitable.

How do 0% interest car loans compare to other offers?

Not overly favourably – you may see 0% finance offered by dealerships, but they’re not as simple as you might think. These deals are often used to increase the purchase price of the car itself and will charge a greater amount in fees to compensate for the lack of interest.

Additionally, interest-free periods may only last 12 months of your repayment agreement, meaning you’ll return to paying a standard or higher rate thereafter and cost you even more money.

What loan term should I choose for my car loan?

Firstly, you should always prioritise lenders that can accommodate your preferred loan term, particularly if you’re looking on the shorter or longer end of the scale. Not all lenders offer the same one-year minimum and seven-year maximum, so your Savvy consultant will ensure you’re matched with one who offers your preferred term.

Additionally, you may also look for car loans who offer flexible repayment schedules and free additional contributions. These are both incredibly useful when it comes to shaping your loan, as they add flexibility and freedom to your instalments to help you save money.

Should I consider the ability to make a deposit when comparing loans?

If you’re able to make a deposit, this could be a great way for you to save money on your car loan. These reduce the interest payable on your loan and can potentially decrease your interest rate by lowering the feeling of risk in your lender. Those in a position to make a deposit can prioritise the ability to do so when comparing loans.

Will I be able to pay my car loan off early?

Yes – we can connect you with lenders who offer the ability to make free additional repayments. This can be a great way to add flexibility to your loan and afford you the opportunity to save a meaningful amount in interest and savings across your term. As such, free early repayments could be an important point of comparison for you. However, in most cases, you’ll have to pay a fee for completing your loan payments ahead of schedule.