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Whether buying a brand new Jeep Wrangler or a Holden Astra, a cheap car loan could get you behind the wheel of your new ride. Here we’ll show you how to lock in a cheap car loan deal that you’ll help save you money.
Home Owner Discount, Including Demo, Variable, Secured
Low variable car loan rate for purchasing new and demo vehicles from dealers. Personalised loan amounts between $5,000 and $150,000. Flexible repayment options. Choose between the 3 to 7 year loan terms. Good credit history. Stable employment history and Australian citizenship or PR required.
Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 6.24% would cost $35,880.27 including fees.
Read our Mozo Review to learn more about the loans.com.au New Car Loan - Special
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Home Owner Discount, Including Demo, Fixed, Secured
Eligible for homeowners only. Low fixed car loan rate for purchasing new and demo vehicles from dealers. Early payout options available. Winner of Mozo's Experts Choice Car Loan 2021 award^. Good credit history. Stable employment history and Australian citizenship or PR required.
Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 6.99% would cost $36,513.67 including fees.
Read our Mozo Review to learn more about the loans.com.au New Car Loan - Special
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Fixed, Secured, No vehicle age limit
Get a competitive fixed interest rate on a secured used car loan of up to $75,000 depending on your credit score. No vehicle age limits. Easy online application. Fast pre-approval. Pre-approved funds held for up to 3 months. No monthly account keeping fees, no exit fees and no early repayment fees. Flexible weekly, fortnightly or monthly repayments on terms from 1 to 7 years.
Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 6.57% would cost $35,528.12 including fees.
Read our Mozo Review to learn more about the OurMoneyMarket Used Car Loan
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Including Demo, Variable, Secured
Low variable car loan rate for purchasing new and demo vehicles from dealers. Extra low rate for qualifying homeowners. Personalised loan amounts between $5,000 and $150,000. Flexible repayment options. Choose between the 3 to 7 year loan terms. Good credit history. Stable employment history and Australian citizenship or PR required.
Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 7.74% would cost $37,153.94 including fees.
Read our Mozo Review to learn more about the loans.com.au New Car Loan - Special
Your selected car loans
New or Used, Fixed, Secured
Get a 1% discount on your car loan interest rate if you buy a qualifying green car. Winner of Mozo's Experts Choice Green Car Loan 2021 award^. Good credit history. Stable employment history and Australian citizenship or PR required.
Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 7.69% would cost $37,111.05 including fees.
Read our Mozo Review to learn more about the loans.com.au Clean Green Car Loan
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Fixed, Secured
Get a competitive fixed interest rate on a secured new car loan of up to $75,000 depending on your credit score. Easy online application. Fast pre-approval. Pre-approved funds held for up to 3 months. No monthly account keeping fees, no exit fees and no early repayment fees. Flexible weekly, fortnightly or monthly repayments on terms from 1 to 7 years.
Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 6.57% would cost $35,528.12 including fees.
Read our Mozo Review to learn more about the OurMoneyMarket New Car Loan
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Up to 5 years old, Variable, Secured
Used Car Loan with no monthly or ongoing fees, with a fixed rate for the life of the loan. Fast online application. Good credit history. Stable employment history and Australian citizenship or PR required.
Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 7.74% would cost $37,153.94 including fees.
Read our Mozo Review to learn more about the loans.com.au Used Car Loan
Your selected car loans
Including Demo, Fixed, Secured
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^. Good credit history. Stable employment history and Australian citizenship or PR required.
Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 8.19% would cost $37,541.41 including fees.
Read our Mozo Review to learn more about the loans.com.au New Car Loan - Special
Your selected car loans
Home Owner, New or Used, Fixed, Secured
Get a 1% discount on your car loan interest rate if you buy a qualifying green car. Winner of Mozo's Experts Choice Green Car Loan 2021 award^. Good credit history. Stable employment history and Australian citizenship or PR required.
Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 6.49% would cost $36,090.64 including fees.
Read our Mozo Review to learn more about the loans.com.au Clean Green Car Loan
Your selected car loans
Mozo has partnered with one of Australia’s leading car finance brokers, Fido Finance, to help you find a car loan match.
Sound good? To get started, simply provide a few details on what you’re looking for and Fido Finance can help you lock in a great car loan rate.
^See information about the Mozo Experts Choice Car loans Awards
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.
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The first step to finding a cheap car loan deal is to look for one with a low-interest rate. When you start comparing car loan interest rates you’ll soon notice that there are two interest rates displayed next to the loan: the headline rate and the comparison rate. But what’s the difference?
The headline rate, which is usually the main rate you’ll see advertised on a loan, is the interest rate the lender will charge you for taking out the loan.
This rate can be either a variable or fixed rate and it gives you an indication of the amount of interest you’ll pay over the life of the loan - not including any extra fees or other charges.
Now the comparison rate (usually sits next to the headline rate) is the one you’ll want to pay close attention to if you want a more accurate idea of the true cost of the loan. The comparison rate factors in both the headline rate plus any other extra fees that may be charged on top.
However, be aware that the advertised comparison rate tends to be more of a guide as it’s usually based on a set figure (e.g. a $30,000 loan repaid over 5 years). The actual comparison rate of the loan that you apply for will be different as it will be based on your exact loan requirements.
Understand your loan costs by crunching the numbers in our free car loan repayment calculator.
Speaking of car loan interest rates, another decision that can influence the overall cost of your car loan is whether you opt for a fixed or variable interest rate. Here’s the difference:
With a fixed-rate loan, you’re ‘locked-in’ to the same interest rate for the entire loan term. The pro is that your interest rate and repayments will stay the same regardless of how the market moves - making it easier to budget for. The con, however, is that fixed-rate loans often have break fees if you decide to pay out your loan earlier than the fixed term in the contract.
Alternatively, you might opt for a variable interest rate which moves with the market and can potentially increase or decrease during your loan term. A bonus though is that variable-rate loans don’t usually charge early repayment fees, so you might be able to pay your loan off early without being penalised for it.
Another factor that can influence the cost of your car loan is whether you go for a secured loan or an unsecured loan.
With a secured car loan, you’ll be required to put up an expensive asset (your new car) as security in case you ever default on the loan - in which case the lender could potentially repossess your asset to cover the cost of any missed repayments. With a secured loan you'll usually need to be buying a new car or one that’s generally less than 3 years old.
The benefit of a secured car loan is that they often come with cheaper interest rates than unsecured loans, meaning you could save some extra cash on interest payments.
With an unsecured car loan, you won’t be required to put up any assets as security against the loan. The downfall with this is that unsecured loans are generally more expensive because lenders usually offer more competitive rates to borrowers who secure their loan with an asset.
The next thing to look out for when trying to find a cheap car loan is fees. Overtime fees can really add up, so try to find a loan with minimal fees, or better yet, no fees at all. Here are some common car loan fee charges to be aware of:
Some lenders will charge an upfront application fee when you take out a new car loan. Depending on the lender, this fee can be anywhere between $0 and $600. If you do decide to go with a loan that has a high upfront fee, then just be sure that the loan features and interest rate will balance out the cost.
Some lenders will charge an ongoing loan maintenance fee. This fee is usually only around $10 or so a month, but keep in mind that it’ll add up over the life of your loan. For example, a $10 monthly fee on a 5-year loan would eventually add up to $600.
Late repayment fees
Loan discharge fees
Annual fees
Early repayment penalty/break cost fee: Some fixed-rate car loans allow you to make extra loan repayments to help you pay off your loan quicker. However, if you do try to pay your loan off early then, depending on the lender, you could be charged a break cost fee (this only applies for fixed-rate car loans).
Yes, it can. By opting for a longer loan term your regular repayments might become cheaper, but you’ll wind up paying more in the long run because you’ll have more interest payments to make.
By opting for a shorter loan term, your regular repayment amount will be higher, however, you’ll pay less interest over time. At the end of the day, it all depends on whether you can afford to make bigger repayments now so you can pay less interest in total.
Using the car loan repayment calculator we found that if you took out a $30,000 car loan with a 6.58% p.a. interest rate and a 5-year loan term, your monthly repayments would be $588 and you’d pay $5,287 total interest over the life of the loan.
However, if you reduce the length of your loan term to 3 years, your monthly repayments would be $921 and you’d pay $3,140 total interest instead. That’d save you $2,147 in interest charges!
Other factors that can determine how cheap your car loan will be are the features it comes with. On top of choosing the right loan term, rate type and finding a loan with no/minimal fees, there are a few other features to look for that can really help bring the cost down, such as:
Having the flexibility to make extra repayments means you can potentially pay your loan off faster and save on interest. Not all loans come with an extra repayments facility, so be sure to double-check that the loan you’re considering offers this feature if it’s something you’re keen on before applying.
Some lenders give you the choice of either weekly, fortnightly or monthly repayments. This means that you’ll have the freedom to tailor your repayments around your regular pay schedule. So if you get paid weekly, then you might opt for having your car repayments debited weekly instead of monthly.
Another great thing about flexible repayments is that you could potentially save some money by opting for fortnightly repayments as you’d wind up paying a month extra within a one year period.
For example, there are 26 fortnights in one year, so if your car loan repayments were $500 a fortnight, you’d end up repaying $13,000 in one year. Whereas if you made monthly repayments you’d be paying $1,000 per month, which would only equate to $12,000 a year.
When you start comparing car loans you’ll find that some banks and lenders offer tiered interest rates which are based on your credit history. The beauty of this is that if you have a solid credit score then you could potentially score a better interest rate on your loan.
There isn’t necessarily one specific bank or lender that’s best for getting a cheap car loan with. It ultimately depends on which provider offers the right loan option to suit you and your individual needs.
The best way to find this is to shop around and compare car loan products until you find one that has the features you want at a price you can afford.
A great place to start your search is with a 2019 Mozo Experts Choice Personal Loan Award-winner.
To pick the winners of the 2019 Mozo Experts Choice Personal Loan Awards our Mozo Expert judging panel conducted an in-depth analysis of 286 personal loan products from 78 Australian financial institutions, assessing each on an extensive range of criteria (read about it in our methodology report).
For the Car Loan category, calculations were based on the cost of a $30,000 new car loan including principal, interest, fees and charges repaid over 5 years.
Here are some of the winning loans that ranked cheapest for buying a new car:
Head to the 2019 Mozo Experts Choice Personal Loan Awards landing page to see the full winner list.
When you apply for a car loan, the lender checks your credit score to help determine whether or not you’ll be a creditworthy borrower who’ll be able to repay the loan. So having a bad credit score can decrease your chances of getting approved for the loan.
Some lenders offer risk-based pricing (tiered interest rates based on your credit score) - so having a poor credit score could also mean that you end up paying higher interest rates than someone that has a good credit rating.
It’s not impossible to be granted a loan with a bad credit history, however, you’ll have a better chance if you work on improving your credit score first before applying.
It will vary between each lender and car loan - however, here are some common car loan eligibility requirements:
You must be over the age of 18
You must be an Australian citizen or permanent resident
You must earn an income
You must meet the lenders credit requirements
For a secured loan: you must have an asset you can use as collateral against the loan
If you purely just want a car to help get you from A to B, then it’d make sense to go for some a little more basic without all the extra bells and whistles that come with a luxury model.
One potentially budget-friendly option would be to take out a used car loan to purchase a secondhand vehicle. But regardless of whether you go buy brand new or secondhand, there are loads of different finance options available to help cover the cost of a cheaper car model.
With a cheaper car, you’ll usually need to opt for an unsecured loan as you won’t be able to put the car up as security. At Mozo, you can find $10,000 car loans as well as loans for amounts as little as $5,000!
Unfortunately, the cost of buying a car isn’t just the initial price you pay for the car itself. Whether you’re buying a brand new model or a preloved vehicle, there are a few extra costs that you’ll need to budget, like:
Rego: In order to keep your car on the road you must pay a car registration fee every 12 months as well as purchase a CTP green slip (insurance) and pink slip (safety check). To pass the pink slip safety check needed to register your vehicle, you might be required to have some mechanical repairs done on your car, which will be another cost on top.
Insurance: When you own a car you’ll need to buy car insurance to ensure you’re financially covered in the case of an accident. You’ll have the option to purchase either third-party or comprehensive car insurance. Depending on the level of cover you opt for your car insurance policy will cover the cost of any damage you cause to your car or another party’s car/property resulting from an accident.
One of the worst finance provider. They offered me 24% interest rate for a car loan, while RACV offered 10%. Clearly they are just here to rob people
Read full reviewOne of the worst finance provider. They offered me 24% interest rate for a car loan, while RACV offered 10%. Clearly they are just here to rob people
We recently took our a car loan with our local toyota dealer. The turnaround was insanely quick. Our car arrived much quicker than anticipated and we approached a broker regarding a loan. The amount of documentation they required seemed excessive however we trusted our broker. I started to compile all of the required documents when the dealer reached out again. They matched the rate offered by the broker and had us approved same day. We decided to proceed with the dealer as they made the process incredibly smooth. The monthly fees seemed reasonable compared to other loans offered. This loan had $8 p/month fee whereas Macquarie was $15 per month. Ideally I would've liked a more flexible car loan however, we agreed to lock in a fixed price and put any additional money we had into our home loan instead.
Read full reviewWe recently took our a car loan with our local toyota dealer. The turnaround was insanely quick. Our car arrived much quicker than anticipated and we approached a broker regarding a loan. The amount of documentation they required seemed excessive however we trusted our broker. I started to compile all of the required documents when the dealer reached out again. They matched the rate offered by the broker and had us approved same day. We decided to proceed with the dealer as they made the process incredibly smooth. The monthly fees seemed reasonable compared to other loans offered. This loan had $8 p/month fee whereas Macquarie was $15 per month. Ideally I would've liked a more flexible car loan however, we agreed to lock in a fixed price and put any additional money we had into our home loan instead.
The bank is very useful and helpful.
Read full reviewThe bank is very useful and helpful.
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