cheap car loans

Cheap Car Loan Comparison Australia

Whether buying a brand new Jeep Wrangler or a preloved Holden Astra, most people don’t have enough money lying around to pay for a car all in one go. By the same token, committing to a car loan with high-interest payments isn’t always an option either.

Not to worry! If you’re looking for a cheap car loan to get you behind the wheel of your new ride then you’ve come to the right place. Here we’ll show you how to lock in a cheap car loan deal that you’ll help save you money.

Cheap car loan comparisons on Mozo - last updated 28 July 2021

Search promoted car loans below or do a full Mozo database search. Advertiser disclosure.
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    New Car Loan

    Including Demo, Fixed, Secured

    Interest rate
    comparison rate
    Monthly repayment
    4.67% p.a.
    5.22% p.a.based on $30,000
    over 5 years

    Terms from 3 to 5 years. Representative example: a 5 year $30,000 loan at 4.67% would cost $34,096.76 including fees.

    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^.

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    Car Loan

    Fixed

    Interest rate
    comparison rate
    Monthly repayment
    4.89% p.a.to 8.89% p.a.
    5.44% p.a.to 9.46% p.a.based on $30,000
    over 5 years

    Terms from 3 to 7 years. Representative example: a 5 year $30,000 loan at 4.89% would cost $34,276.58 including fees.

    Enjoy competitively low rate car loans from 4.89% (comparison rate 5.44% 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.

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    Car Loan - Excellent Credit

    Fixed, Unsecured

    Interest rate
    comparison rate
    Monthly repayment
    5.95% p.a.to 19.99% p.a.
    5.95% p.a.to 21.0% p.a.based on $10,000
    over 3 years

    Terms from 2 to 5 years. Representative example: a 3 year $10,000 loan at 5.95% would cost $11,538.74 including fees.

    Be rewarded for your good credit history with low rates. Plus there are no ongoing fees and you can pay off your loan with no early repayment penalties. Simply apply online and get a quote in minutes.

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    Clean Green Car Loan

    New, Fixed, Secured

    Interest rate
    comparison rate
    Monthly repayment
    3.97% p.a.
    4.51% p.a.based on $30,000
    over 5 years

    Terms from 3 to 5 years. Representative example: a 5 year $30,000 loan at 3.97% would cost $33,525.38 including fees.

    No monthly or ongoing fees. Get a 0.70% 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^.

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    Secured Car Loan

    Fixed

    Interest rate
    comparison rate
    Monthly repayment
    4.74% p.a.to 16.01% p.a.
    5.01% p.a.to 16.31% p.a.based on $30,000
    over 5 years

    Terms from 3 to 7 years. Representative example: a 5 year $30,000 loan at 4.74% would cost $33,949.23 including fees.

    Low personalised rates, ideal for borrowers with excellent credit. No monthly account fees, no early payout fees, so you can pay off your loan sooner. Borrow between $5,000 and $63,000. Easy online application, receive a response in minutes and approved funds within 24-48 hours!

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    Car Loan

    Fixed, Secured

    Interest rate
    comparison rate
    Monthly repayment
    5.35% p.a.
    5.65% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 5.35% would cost $34,507.61 including fees.

    Available for all New and Used cars. 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.

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    Car Loan

    Up to 5 years old, Fixed, Secured

    Interest rate
    comparison rate
    Monthly repayment
    4.89% p.a.
    5.53% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 4.89% would cost $34,377.58 including fees.

    Purchase or refinance a new or used vehicle, up to five years old. Choose a loan term from one to seven years. To be eligible you must be over 18, receiving a regular income and an Australian resident.

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    Secured Car Loan

    Fixed

    Interest rate
    comparison rate
    Monthly repayment
    6.79% p.a.
    7.16% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 6.79% would cost $35,729.09 including fees.

    Reach your goal sooner without being penalised with $0 early payout fee. $0 monthly fees. Choose to make either monthly, fortnightly or weekly repayments to suit your income and budget. Winners of Australia's Best Large Credit Union in 2020.

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^See information about the Mozo Experts Choice Car loans Awards

*WARNING: The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the 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.

Car loan lenders we compare at Mozo

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FAQ

Cheap car loan interest rates:

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?

Headline interest rate:

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.

Comparison interest rate:

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.

Is a fixed or variable interest cheaper?

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:

Fixed interest rate car loan:

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.

Variable interest rate car loan:

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.

Is a secured or unsecured car loan cheaper? 

Another factor that can influence the cost of your car loan is whether you go for a secured loan or an unsecured loan.

Secured car loans:

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.

Unsecured car loans:

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.

What kind of hidden fees should I be wary of?

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:

Upfront fees:

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.

Ongoing fees:

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.

Other fees:

  • 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).

Does the length of the loan affect how cheap it is?

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. 

Scenario:

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!

What factors decide how cheap my car loan will be?

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:

Extra repayments facility:

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.

Flexible repayment options:

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. 

Scenario:

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.

Tier-based interest rates:

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. 

Which is the best bank or lender for a cheap car 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.

2019 Mozo Experts Choice Award-winning Car Loans:

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.

Picture of JP Pelosi
JP Pelosi
Managing editor

Jean-Paul (JP) Pelosi is an experienced journalist and editor who has contributed to many of Australia's leading media outlets including The Guardian, News.com.au, Domain.com.au, Investment Magazine and ANZ's Bluenotes. He has also edited news and communications for large financial services companies such as CommBank, Suncorp, Allianz and Amex. He loves a well told story and applying his editorial experience to content that readers both care about and enjoy. JP heads up our writing team.

More FAQs about Cheap Car Loans

Can I get a car loan with bad credit?

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.

What's the eligibility criteria for getting a car loan?

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

Can I get a loan on a cheap car?

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!

What are the additional costs when buying a car in Australia?

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.

Car Loan Reviews

RAC Car Loan
Overall 1/10
stupid reasoning for refusal refinance

Tried to get a loan I already have refinanced, they use the audacity to tell me i can’t afford it - yet i am already paying a higher repayment than what RAC would offer me. Very unhappy, have since gone elsewhere and been approved for the refinancing. wasted my time for 2 weeks.

Read full review

Tried to get a loan I already have refinanced, they use the audacity to tell me i can’t afford it - yet i am already paying a higher repayment than what RAC would offer me. Very unhappy, have since gone elsewhere and been approved for the refinancing. wasted my time for 2 weeks.

Price
1/10
Features
1/10
Customer service
1/10
Convenience
1/10
Trust
1/10
Less
Dannii, Western Australia, reviewed about 18 hours ago
RAC Car Loan
Overall 1/10
Unwarranted damage to credit file

As someone who works in finance, I would hope that others would operate in the same manner as I would for my clients. Thought I would inquire about re financing a car loan through RAC, went through the application and gave all info only to be told that their policies don’t fit my current circumstance. That is all well and good, but that conclusion could have been drawn without leaving an inquiry on my credit file. The information given was enough to make a decision without damaging my credit file. I have 2 homes insured with RAC, 2 cars insured with RAC and I will be looking elsewhere for each of them as a result of this poorly handled loan application. Credit files should be the last thing to be touched on an application, it is a serious thing that can effect people’s livelihoods!

Read full review

As someone who works in finance, I would hope that others would operate in the same manner as I would for my clients. Thought I would inquire about re financing a car loan through RAC, went through the application and gave all info only to be told that their policies don’t fit my current circumstance. That is all well and good, but that conclusion could have been drawn without leaving an inquiry on my credit file. The information given was enough to make a decision without damaging my credit file. I have 2 homes insured with RAC, 2 cars insured with RAC and I will be looking elsewhere for each of them as a result of this poorly handled loan application. Credit files should be the last thing to be touched on an application, it is a serious thing that can effect people’s livelihoods!

Price
1/10
Features
1/10
Customer service
1/10
Convenience
1/10
Trust
1/10
Less
David, Western Australia, reviewed 13 days ago
loans.com.au Used Car Loan (Fixed)
Overall 3/10
Early payout and establishment fees are high.

Excessive early repayment fees and $400 establishment fee. Early repayment fee just went up to $700 in the first and second year and $500 in subsequent years. Means you're paying $700 early repayment in the first 2 years of a 3 year loan! Shop around. There's better deals out there. I'll never use them again.

Read full review

Excessive early repayment fees and $400 establishment fee. Early repayment fee just went up to $700 in the first and second year and $500 in subsequent years. Means you're paying $700 early repayment in the first 2 years of a 3 year loan! Shop around. There's better deals out there. I'll never use them again.

Price
4/10
Features
8/10
Customer service
8/10
Convenience
8/10
Trust
2/10
Less
Chris, Queensland, reviewed 22 days ago

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