New car buyers are warned of “lemons” in the market

Australians looking to take out a car loan to purchase a new car are being warned to check car warranties carefully after a survey by consumer advocacy group CHOICE found 66% of respondents discovered faults in their vehicles within five years of buying them.
CHOICE interviewed 1,505 Australians, and of the third with faulty car experiences, 73% were fully covered by a warranty, 11% were partly covered and 11% were not covered at all.
"New cars are expensive purchases, it's shocking to see that most consumers buying new cars should expect problems in the first five years of ownership," said CHOICE advisor Sarah Agar.
The report also found that beyond the direct cost of car repair, on average car owners with lemon cars spent $858 and 31 hours trying to resolve their problems.
This isn’t the first time the quality of new cars has been called into question in Australia. Late last year, the Queensland Government launched a Parliamentary enquiry into customer protections and remedies for new car buyers titled “‘Lemon’ Laws”.
Independent candidate for the seat of Ashgrove, Connie Cicchini recommended for the state adopt a “lemon vehicle register” similar to ones implemented in the US. This would mean consumers could make a more informed choice before settling on a new or used car by referring to the register.
Tips for Australians with a lemon car:
Refer to your car warranty and car insurance policy to see if your required repair is covered
Give your car dealer or manufacturer a call explaining the situation
If you’re still not having any luck, you might want to call the ACCC and seek advice on your legal rights and obligations
If you are required to pay for the mending of your car, you do have the option to take out a car repair loan. This can really help you out if getting the car fixed is urgent but you don’t have the funds to make it happen
Car loan comparisons on Mozo - last updated 25 June 2022
-
New Car Loan - Prime Special
Home Owner Discount, Including Demo, Variable, Secured
Interest rate
comparison rate
Monthly repayment3.74% p.a.4.28% p.a.based on $30,000
over 5 yearsLow variable car loan rate for purchasing new and demo vehicles from dealers. Extra low 3.74% rate (4.28% comparison rate*) for qualifying homeowners. Personalised loan amounts between $5,000 and $100,000. Flexible repayment options. Choose between the 3 to 5 year loan terms.
Repayment terms from 3 years to 5 years. Representative example: a 5 year $30,000 loan at 3.74% would cost $33,338.96 including fees.
CompareCompare- Interest rate
- 3.74% p.a.
- comparison rate
- 4.28% p.a.based on $30,000
over 5 years
- Interest rate
- 3.74% p.a.
- comparison rate
- 4.28% p.a.based on $30,000
over 5 years
- Upfront fees
- $400
- Monthly fee
- $0.00
- Exit fee
- $0.00
- Repayment options
- Weekly, Fortnightly, Monthly
- Early repayment penalty
- $700.00
- Minimum loan amount
- $5,000.00
- Maximum loan amount
- $100,000.00
- Minimum loan term
- 3 Years
- Maximum loan term
- 5 Years
- Security required
- Vehicle
Read our Mozo Review to learn more about the loans.com.au New Car Loan - Prime Special
-
Car Loan
Fixed, Secured
Interest rate
comparison rate
Monthly repayment5.35% p.a.5.65% p.a.based on $30,000
over 5 yearsAvailable for all New and Used cars up to 7 years. A quick and easy, 100% online application with loans up to $75,000. No printing. No paper. No fuss. No monthly account keeping fees, no exit fees and no early repayment fees.
Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 5.35% would cost $34,507.61 including fees.
CompareCompare- Interest rate
- 5.35% p.a.
- comparison rate
- 5.65% p.a.based on $30,000
over 5 years
- Interest rate
- 5.35% p.a.
- comparison rate
- 5.65% p.a.based on $30,000
over 5 years
- Upfront fees
- $250
- Monthly fee
- $0.00
- Exit fee
- $0.00
- Repayment options
- Weekly, Fortnightly, Monthly
- Early repayment penalty
- 0
- Minimum loan amount
- $2,001.00
- Maximum loan amount
- $75,000.00
- Minimum loan term
- 1 Year
- Maximum loan term
- 7 Years
- Security required
- Vehicle
Read our Mozo Review to learn more about the OurMoneyMarket Car Loan
-
New Car Loan - Prime Special
Home Owner Discount, Including Demo, Fixed, Secured
Interest rate
comparison rate
Monthly repayment5.09% p.a.5.64% p.a.based on $30,000
over 5 yearsEligible for homeowners only. Low fixed car loan rate for purchasing new and demo vehicles from dealers. There is no monthly or ongoing fees and early payout options available. Winner of Mozo's Experts Choice Car Loan 2021 award^.
Repayment terms from 3 years to 5 years. Representative example: a 5 year $30,000 loan at 5.09% would cost $34,442.49 including fees.
CompareCompare- Interest rate
- 5.09% p.a.
- comparison rate
- 5.64% p.a.based on $30,000
over 5 years
- Interest rate
- 5.09% p.a.
- comparison rate
- 5.64% p.a.based on $30,000
over 5 years
- Upfront fees
- $400
- Monthly fee
- $0.00
- Exit fee
- $0.00
- Repayment options
- Weekly, Fortnightly, Monthly
- Early repayment penalty
- $700.00
- Minimum loan amount
- $5,000.00
- Maximum loan amount
- $100,000.00
- Minimum loan term
- 3 Years
- Maximum loan term
- 5 Years
- Security required
- Vehicle
Read our Mozo Review to learn more about the loans.com.au New Car Loan - Prime Special
-
Car Loan
Fixed
Interest rate
comparison rate
Monthly repayment6.19% p.a.to 10.29% p.a.6.74% p.a.to 10.86% p.a.based on $30,000
over 5 yearsEnjoy competitively low rate car loans from 6.19% (comparison rate 6.74% p.a.) between $10,000 and $100,000 for new, demo and used vehicles. Take advantage of flexible 3, 5 or 7 year loan terms. No early repayment or exit fees. You must be 21 years or over to qualify and earn above $35,000.
Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 6.19% would cost $35,357.29 including fees.
CompareCompare- Interest rate
- 6.19% p.a.to 10.29% p.a.
- comparison rate
- 6.74% p.a.to 10.86% p.a.based on $30,000
over 5 years
- Interest rate
- 6.19% p.a.to 10.29% p.a.
- comparison rate
- 6.74% p.a.to 10.86% p.a.based on $30,000
over 5 years
- Upfront fees
- $399
- Monthly fee
- $0.00
- Exit fee
- $0.00
- Repayment options
- Monthly
- Early repayment penalty
- 0
- Minimum loan amount
- $10,001.00
- Maximum loan amount
- $100,000.00
- Minimum loan term
- 3 Years
- Maximum loan term
- 7 Years
- Security required
- Vehicle
Read our Mozo Review to learn more about the Plenti Car Loan
-
Used Car Loan
Dealer Only, Up to 5 years old, Fixed, Secured
Interest rate
comparison rate
Monthly repayment6.59% p.a.7.14% p.a.based on $30,000
over 5 yearsUsed Car Loan with no monthly or ongoing fees, with a fixed rate for the life of the loan. Fast online application.
Repayment terms from 3 years to 5 years. Representative example: a 5 year $30,000 loan at 6.59% would cost $35,695.00 including fees.
CompareCompare- Interest rate
- 6.59% p.a.
- comparison rate
- 7.14% p.a.based on $30,000
over 5 years
- Interest rate
- 6.59% p.a.
- comparison rate
- 7.14% p.a.based on $30,000
over 5 years
- Upfront fees
- $400
- Monthly fee
- $0.00
- Exit fee
- $0.00
- Repayment options
- Weekly, Fortnightly, Monthly
- Early repayment penalty
- $700.00
- Minimum loan amount
- $5,000.00
- Maximum loan amount
- $100,000.00
- Minimum loan term
- 3 Years
- Maximum loan term
- 5 Years
- Security required
- Vehicle
Read our Mozo Review to learn more about the loans.com.au Used Car Loan
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.