Compare Sydney Car Loans

Getting a car loan: What you’ll need to know

Living in Sydney means that you'll generally need a car to get you from A to B. If you’re planning on buying a new or preloved vehicle, you might consider taking out a car loan to help cover the initial cost of the car so you can pay it back gradually over a set period of time. Plus interest charges and any other fees involved.

What are the key features to consider in a car loan?

• Interest rate: On top of paying back the loan you’ll also be charged a percentage of interest on the amount you borrow. The lower the interest rate, the less interest you pay - so it’s always important to shop around for a loan with a competitive rate. When picking a car loan you’ll also have a choice between either a variable or fixed interest rate - which we’ll explain more further down.

• Fees: Depending on the loan you choose, you could be charged some additional fees, such as upfront application fees, ongoing monthly service fees, late payment fees should you miss a payment, or loan termination fees, among others.

• Comparison rate: The headline rate displayed at the top of a loan generally only tells you what the main interest is for the loan. For a more accurate indication of the total cost of the loan, be sure to check the comparison rate which factors in both the interest rate plus any other additional fees that come with the loan.

• Features: Handy features to look for in a car loan are flexible repayment options so you can tailor your regular repayments to your budget and pay schedule, the ability to make extra loan repayments and a redraw facility so you can redraw on any extra repayments you’ve made. More features can sometimes mean more fees - so only go for the ones you know you’ll use.

Is a fixed or variable interest rate better?

When you compare car loans interest rates you’ll have the choice between either a fixed or variable interest rate. The type of interest rate you choose will depend on your specific needs. 

• Fixed interest rate: By choosing a fixed rate loan, you’re essentially locking into one rate for the life of your loan. This could be good if you like having the certainty that your interest rate and repayment amount will never change making it easier to budget around. However, one of the pitfalls of a fixed rate is that you could cop a fee if you try to pay your loan off early.

• Variable interest rates: Variable interest rates move according to the market, which means your interest rate and car loan repayments could potentially increase or decrease throughout your loan term. But one of the tradeoffs for this sense of uncertainty is that variable rate loans don’t usually charge early repayment or exit fees if you pay your loan off early.

How much will my car loan repayments be?

Your car loan repayments are determined by your interest rate, loan term and repayment frequency, so it all depends. But to get a rough idea of what your repayments might look like, you can crunch the numbers above by selecting the loan amount and number of years you want the loan for or head over to Mozo’s free car loan repayments calculator to compare other options.

Which lenders in Sydney offer car loans?

There are loads of options available if you live in Sydney and are looking to take out a car loan. Not to mention, with most banks offering the ability to apply for a loan online, it won’t necessarily matter where you’re from in Australia. That said, here are some of the main categories you’ll have to choose from:

• Big banks: If you tend to stick with the big banks then you might opt for a car loan from lenders like NAB, Westpac or the Commonwealth Bank - each of which has many local branches throughout Sydney. Bear in mind however, that the big banks generally offer far less competitive rates than their smaller competitors.

• Customer-owned banks & credit unions: Smaller mutual banks and credit unions are generally very customer-focused and tend to offer better rates than the big banks as they often choose to put their profits back into giving lower rate products to their customers. 

• Peer to peer lenders: Harmoney and Society One are two examples of Aussie peer to peer lenders that currently offer car loans. Peer to peer lenders often offer different rate tiers based on your credit history, so you could potentially score a better rate for having a good credit history.