Car Loans Melbourne

Compare low rate car loans for new or used vehicles in Melbourne or anywhere else in Victoria with Savvy today!

Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
Our authors
, updated on May 22nd, 2024       

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Happy man and woman driving in car

Whether you need a car for work or you're looking to drive for pleasure or leisure, checking out all your options for finance can save you a lot of cash. Australia has some great car loan lenders to serve Melbourne residents and others living throughout Victoria, offering many different types of financial products. Choosing the right one can be the key to making your purchase a successful one, which is where Savvy comes in.

Wherever you are in the state, from the capital to Geelong to Ballarat, car finance in Victoria doesn't have to take up too much of your time. Savvy helps Australians qualify for the car loan they want every year. Established relationships with some of the country's best finance providers mean we can advise on the best car loans for your specific circumstances. A great deal on car finance starts when you get Savvy!

How can I get a car loan in Melbourne?

The step-by-step process of applying for a car loan with Savvy is a very simple one. Here’s how you can get the ball rolling on your application for car finance in Melbourne:

  1. Complete our online quote form: first and foremost, filling out an online quote tells us important information about you, your profile and the car and loan you’re after. This quote comes with no obligations, but if you’re keen to get moving, you can also formally apply at this step.
  2. Send through the required documents: as part of your application, you’ll need to submit a series of documents. In most cases, this will include ID, such as your driver’s licence, payslips, bank statements and details about your employment and financial situation. Once you submit these, we’ll get in touch if we need any further documents.
  3. Have a chat with a friendly consultant: once you’ve submitted your application, we can get to work comparing offers for you. A member of our car finance consultant team will give you a call to speak about which of our lenders’ products is the best match for your profile. Alternatively, if you’ve just filled out a quote, we’ll reach out to talk more about your situation.
  4. Leave the application to us: if you’re happy to go ahead with the application, we’ll prepare it to meet your lender’s requirements and submit it on your behalf. If successful, you can be formally approved as soon as one business day after, so we’ll be in touch when that happens.
  5. Sign your contract and settle the loan: upon approval, you’ll be sent a loan contract to review, sign and return to us. We’ll handle the settlement of the agreement and work with the seller to help you gain access to your new or used car before you know it!

How much does it cost to buy a car in Melbourne?

There’s a wide range of factors to consider when buying a car in Melbourne, both related to your loan and the purchase of the vehicle itself. These include:

Car purchase

Of course, the most significant cost to consider is the purchase price of your vehicle. While these vary significantly, data from Drive found that, in 2022, the average price of a new motor vehicle in Australia was $50,161, with the Victorian average being $51,618.

Car loan

According to the Australian Automobile Association’s (AAA) Q1 2024 Transport Affordability Report, the average Melburnian pays $211.07 per week towards their car loan, which is slightly above the average of $210.17 across all capital cities. However, the amount you’ll end up paying for your loan will depend on several variables, including:

  • Interest rate: the higher your rate, the more you’ll pay on your loan.
  • Fees: the same applies to fees, with establishment, ongoing and potential early repayment charges adding up over the life of your loan.
  • Loan amount: larger loan sums will result in more interest being charged, as it’s calculated based on your balance.
  • Loan term: because your balance falls at a slower rate over longer loan terms, you’ll end up paying more the longer your term is.
  • Additional repayments: some lenders may allow free additional repayments, which can help you pay off the loan sooner and save (provided you aren’t charged steep early termination fees).
  • Balloon payment: a balloon or residual payment acts like a deposit paid at the end of your loan term. However, while it does reduce your monthly payments, the amount of interest charged overall will rise.

Motor vehicle duty

You’ll be required to pay motor vehicle duty when purchasing your car. However, the amount you pay will depend on the type of car you have and its value. You can see how this works in the following table:

Vehicle type Category Market value Rate
Low emission (120gm/km) passenger vehicle
New, used registration or transfer of registration
Any value
$8.40 per $200 of the market value or part thereof
Primary producer passenger vehicles
New, used registration or transfer of registration
Any value
$8.40 per $200 of the market value or part thereof
Passenger vehicles
New, used registration or transfer of registration
Up to $76,951
$8.40 per $200 of the market value or part thereof
Luxury passenger vehicles
New, used registration or transfer of registration
Over $76,951 up to $100,000
$10.40 per $200 of the market value or part thereof
Upper luxury passenger vehicles
New, used registration or transfer of registration
Over $100,001 up to $150,000
$14.00 per $200 of the market value or part thereof
Super luxury passenger vehicles
New, used registration or transfer of registration
More than $150,001
$18.00 per $200 of the market value or part thereof
Non-passenger vehicles and motorcycles
New registration
Any value
$5.40 per $200 of the market value or part thereof
Non-passenger vehicles and motorcycles (includes heavy trailers)
Used or transfer of registration
Any value
$8.40 per $200 of the market value or part thereof
Demonstrator passenger vehicles
Second hand registration or transfer of registration
Any market value
Applicable new car rate

Source: Transfer and motor vehicle duty fees – VicRoads

Vehicle registration

Each year, you’ll need to register your vehicle. The amount you’ll have to pay will depend on where your vehicle is typically kept and the level of risk it poses. For sedans, station wagons, hatches or 4WDs, the registration fees are as follows (correct as of May 2024):

  • Metropolitan (high risk) area: $876.90
  • Outer metropolitan (medium risk) area: $820.80
  • Rural (low risk) area: $754.80

CTP insurance

You’ll also pay Compulsory Third Party (CTP) insurance, known in Victoria as the TAC charge, as part of your vehicle registration fees. Its cost will depend on similar factors, such as the type and use of the vehicle, the postcode where it’ll be primarily stored and whether any discounts apply.

Comprehensive car insurance

All lenders will require borrowers to take out a comprehensive car insurance policy as part of their agreement, so it’s worth considering this cost too. According to the same AAA report mentioned above, insurance costs are highest in Melbourne on average, sitting at $3,373 per year (almost $1,000 lower than the capital city average of $2,419). However, the variables that can impact the cost of your car insurance include:

  • The make, model, age and value of your car
  • What part of Melbourne you live in
  • Whether your car is garaged, parked on your property or on the street
  • Your claims history
  • Your age and how long you’ve been driving, as well as other drivers included under your policy

Car repairs, servicing and maintenance

Of course, it’s crucial to ensure you have enough room in your budget for servicing and repairs. All cars require ongoing maintenance, whether that be for specific issues or simply a checkup, while repairs may be necessary if you have an accident or receive a few dings.

Fuel

The average Melburnian spends just under $100 per week on fuel, according to the AAA’s Q1 2024 Transport Affordability Report. However, the amount you’ll spend will reflect your time on the road each week, how often you go for long drives and whether you operate a fuel-efficient vehicle. Of course, these charges will be different if you have an EV, PHEV or hybrid vehicle.

How do I compare car loans in Melbourne?

It’s important to understand the best ways to compare car loans before diving into your application, as doing so can help you pick the right one with more confidence. These include:

  • Interest rates: as mentioned, the higher the rate, the more you’ll pay.
  • Comparison rates: these include both your interest rate and non-conditional fees, such as establishment and monthly fees. Comparison rates provide a more accurate representation of your loan’s cost.
  • Available loan terms: make sure your lender offers the terms you’re looking for, such as shorter loans of one year and longer-term ones of up to seven.
  • Borrowing ranges: some lenders cap their loan amounts at $100,000, while others may enforce a higher minimum of $10,000 to $15,000. Make sure the amount you want is supported by your lender.
  • Additional features: there are several other flexible features that can be included on car loans, such as additional repayments and even redraw facilities in some cases.
  • Applicant eligibility: it’s essential to make sure that you qualify for a loan through the lender you’re applying to.
  • Vehicle eligibility: the same applies to your car, with lenders enforcing criteria relating to factors like age and condition.

When you apply with Savvy, we’ll do all of this for you. We’ll only consider lenders whose criteria you meet, as well looking for those who can offer the loan terms and size you’re looking for. Get a free quote with us today!

Why choose Savvy for your car loan?

Calculate car loan repayments

Your estimated repayments

$98.62

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

Disclaimer:  The results provided is an estimate only. Please read our Calculator Assumptions and Disclaimer for more information

Top tips for getting a lower car loan interest rate

Work on your credit score

The better your credit score, the lower the interest rate you’re likely to receive. This is because lenders will have more trust in you as a borrower and see you as less of a risk to approve. If you have outstanding debts or unnecessarily high credit limits, attending to these could help boost your score.

Own a home

Although this isn’t possible for everyone, lenders look more kindly on borrowers who are asset-backed, such as homeowners. You’ll find that the rates offered to you if you’re in this position are better than what you’d receive if you weren’t asset backed.

Display a positive record of repaying similar loans

Aside from a good credit score, lenders will look for indications of your ability to repay loans. One way to boost confidence is to show you’ve repaid similar loans in the past without issue, such as late payments or defaults. If you have a verifiable record of this, you’re more likely to receive a better interest rate.

Shop around

Sometimes, it’s as simple as taking the time to compare your options. By surveying the market and considering as many offers as possible, you’ll be able to choose the best rate with more confidence. Get a quote with Savvy today and let us help you out!

Got questions about car finance in Melbourne?

How long does a car loan application take?

Online applications are a fast and efficient way to arrange car finance. Once your loan is approved and vehicle checks have been made, lenders transfer funds directly to car dealers. The whole process can be completed as soon as 48 hours after you apply for finance with us.

Can I buy a used car from a dealership or private seller?

Yes – we can help you finance a used car from a dealership, private sale or even an auction, provided it satisfies all the lender requirements needed to qualify for a secured loan. We partner with lenders who can consider cars that will be up to 25 years old by the end of your loan agreement.

Are car loan interest rates fixed or variable?

In most cases, your car loan interest rate will be fixed, meaning it remains the same throughout your term. This protects you against potential rate rises during your repayment period. However, some lenders may offer the option of variable rates, which leave your interest open to fluctuation during your term. This can be beneficial if rates fall during your loan term, as well as potentially offering more flexibility when it comes to early repayments.

Can I get a car loan in Melbourne if I receive Centrelink payments?

The good news is that yes, you can access car finance if you receive Centrelink payments. Not all lenders will consider applications in such circumstances, but Savvy partners with specialist lenders who’ll look at your case on merit, and your credit score will also get used to determine whether you qualify. You may be able to take out a car loan and have your Centrelink benefits counted as stable income, such as disability benefits, aged pension, veterans' pension and single parent and carer payments.  

Isn't it just quicker and cheaper to get my car finance from the dealership while I'm there?

Not exactly. Car dealership finance often gets dressed up to look reasonable, but it isn't always the case when you dig a little deeper. Dealers don’t specialise in lending like Savvy does – and their products often come from a single source, so your choices will be limited. Car finance through a broker may be cheaper as a result.

Am I able to take out a car loan with no deposit in Melbourne?

Yes – if you don’t want to use a substantial down-payment, Savvy can help you discover how to keep repayment amounts down, even when you don’t opt to use a deposit. Depending on your borrowing power, you’re free to borrow the complete cost of your new vehicle. 

No deposit car loans are simple to arrange and run for anything between just one and seven years. That makes it easy to find an option to suit both your circumstances and vehicle choice. Some lenders may even allow you to borrow above 100% to include costs such as motor vehicle duty, car registration and insurance. Speak to your Savvy consultant about how much you can borrow if you’re unsure.

Can I be approved for car finance if I’ve never taken out a loan before?

Yes – having little or no credit history needn’t prevent you from getting access to affordable car finance in Melbourne. While many lenders and banks are reluctant to offer car finance to inexperienced borrowers, Savvy is partnered with over 40 reputable and specialist car finance lenders, including those who can cater to diverse needs like yours. It could be that a guarantor car loan would suit you, for instance.

Can I still get a car loan in Melbourne if I have bad credit?

Yes – many Australians experience some type of trouble at some point during their borrowing history. The good news is that it doesn’t mean there aren’t a whole bunch of bad credit car loan options out there. Savvy has developed some excellent relationships over the years with a broad selection of specialist car loan providers. We have a multitude of different car loan products that suit thousands of Aussie vehicle buyers, so we’re a great place to start looking!

How much does it cost to renew my licence in Victoria?

In Victoria, you can either renew your licence for three or ten years (or four if you’re on a P1 probationary licence). Alternatively, the Victorian Government runs a Free Licence Scheme, which rewards eligible drivers with a free three-year licence. The overall costs are as follows (correct as of May 2024):

  • New, reissue or renewal of full or P2 licences (three years): $88.90
  • New, reissue or renewal of full or P2 licences (ten years): $304.50
  • New or reissue of P1 licences (four years): $118.50
  • Free Licence Scheme for eligible drivers under 25 (three years): free
Are there any incentives for purchasing an electric vehicle in Victoria?

There aren’t any incentives or concessions for EV, PHEV, hybrid or low-emissions vehicle buyers in Victoria as of May 2024. In past years, a $100 registration discount was offered, but this ended in 2021. The Zero Emissions Vehicle (ZEV) Subsidy was also in force until 2023, offering a rebate of $3,000 to successful applicants.

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