How to get your dream car this Christmas

Ceyda Erem   |   05 Dec 2018

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From spa treatments to picking up a new pair of shoes, everyone needs to treat themselves every now and again.

But for some Aussies this Christmas, spoiling themselves will come in the form of four wheels and an engine.

According to Car Advice, December is the perfect time of year to buy a new car for two reasons: car dealers are often more likely to offer hotter deals toward the end of the month to meet sales targets and the latest models become ‘old’ the following year.

And unless you’ve got some serious coin in your bank account, you might be considering taking out a car loan to help.

To get you off to a flying start, we’ve jotted down some of the need to knows when it comes taking out a car loan, which could help get you zooming down the highway in no time.

5 car loans to help your get dream car for Christmas - rates updated daily

  • Promoted

    loans.com.au

    loans.com.au

    New Car Loan (Up to 2 years old, Fixed, Secured)

    5.44% p.a.to 5.94% p.a.

    5.99% p.a.to 6.5% p.a.based on $30,000
    over 5 years

    $400.00upfront and $0.00/month

  • Promoted

    Australian Military Bank

    Australian Military Bank

    Car Loan - Excellent Credit (Up to 5 years old, Variable, Secured)

    5.71% p.a.to 8.66% p.a.

    6.57% p.a.to 10.07% p.a.based on $30,000
    over 5 years

    $100.00upfront and $10.00/month

  • Promoted

    MyState Bank

    MyState Bank

    Secured Personal Loan (vehicles up to 2 years old, Variable)

    7.99% p.a.

    8.96% p.a.based on $30,000
    over 5 years

    $200.00upfront and $10.00/month

  • Promoted

    loans.com.au

    loans.com.au

    Clean Green Car Loan (New, Fixed, Secured)

    4.74% p.a.to 5.24% p.a.

    5.29% p.a.to 5.8% p.a.based on $30,000
    over 5 years

    $400.00upfront and $0.00/month

  • Promoted

    CUA

    CUA

    Secured Car Loan (Fixed)

    6.79% p.a.

    7.16% p.a.based on $30,000
    over 5 years

    $265.00upfront and $0.00/month

What to look for in a car loan

Like choosing the perfect car, finding the right car loan takes time and patience. But there are a few things you’ll need to consider, like:

The interest rate

For many, the interest rate is a make or break loan feature, so you don’t want to just pick any. It’s important to weigh up the pros and cons of each, so you can make a decision that’s right for you. The two types of interest rates are:

  • Fixed interest rates - A fixed interest rate allows you to lock in your rate over the life of the loan. This means that you’ll always have the same repayment amount, regardless of how the market moves. Depending on your financial circumstances, a fixed rate allows you to budget more easily, since you’ll always have the comfort in knowing how much you need to repay.

  • Variable interest rates - A variable interest rate depends on how the market fluctuates, so it‘ll either rise or fall. But while your rates may rise, variable rate loans rarely come with early repayment fees, so you won’t have to fork out if you decide to pay out your loan before the term ends.

The type of loan

Car loans come in two types: secured and unsecured. While there is no ‘better’ type of loan, the one you choose should depend your personal circumstances.

  • Secured car loans - If you decide on a secured car loan, you will have to use your car as security against the loan. Although this gives the lender the right to repossess your car if you default on the loan, secured car loans generally come with lower rates. Just keep in mind that if you are planning on buying a second-hand car, secured car loan options are limited, as used cars are deemed by lenders as a risky asset.

  • Unsecured car loans - On the other hand, an unsecured car loan does not use your car as security and does come with different features that can help cut down on interest. However, unsecured car loans typically come with higher interest rates.

Handy repayment features

A another set of features you’ll want to compare are the repayment features, like the option to make extra repayments and make use of a redraw facility. While having these features aren’t essential, they can help you in the long run.

  • Extra repayments - One feature many loans come with is the ability to make extra repayments. Depending on the lender, some may charge a fee to do this while others don’t. Not only could this help you pay off your loan faster, it could reduce the interest you’ll pay over the loan term.

  • Redraw - Another useful feature is a redraw facility - this allows you to withdraw any of your extra repayments to put toward an unexpected bill or cost.

So if you think you’re ready to start shopping around on car loans, make your next stop our car loan comparison tool.

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