Used Car Loans

A used car loan is a personal loan that’s used to help purchase a second-hand vehicle. Compare lenders and repayments to find the right loan for your needs.

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Used car loan comparisons on Mozo

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Last updated 19 February 2025 Important disclosures and comparison rate warning*
  • Used Car Loan

    Fixed, Secured, No vehicle age limit, $5,000-$100,000

    Interest rate
    comparison rate
    Monthly repayment
    6.57% p.a.to 18.99% p.a.
    7.19% p.a.to 21.78% p.a.based on $30,000
    over 5 years

    Get a competitive fixed interest rate on a secured used car loan of up to $100,000 depending on your credit score. No vehicle age limits. Easy online application. Fast pre-approval. Pre-approved funds held for 1 month. 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.

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    Details
  • Used Car Loan

    Home Owner Discount, Up to 5 years old, Variable, Secured

    Interest rate
    comparison rate
    Monthly repayment
    7.49% p.a.
    8.36% p.a.based on $30,000
    over 5 years

    Eligible for homeowners only. Low fixed car loan rate for purchasing new and demo vehicles from dealers or private sale. 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 7.49% would cost $36,939.75 including fees.

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    Details
  • Used Car Loan

    Up to 5 years old, Fixed, Secured

    Interest rate
    comparison rate
    Monthly repayment
    7.69% p.a.
    8.82% p.a.based on $30,000
    over 5 years

    Eligible for homeowners only. Low fixed car loan rate for purchasing new and demo vehicles from dealers or private sale. 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 7.69% would cost $37,111.05 including fees.

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    Details
  • Better Car Loan Special Offer

    Fixed, Secured

    Interest rate
    comparison rate
    Monthly repayment
    6.48% p.a.
    6.48% p.a.based on $30,000
    over 5 years

    Get a fixed rate car loan for amounts over $20,000 with Police Credit Union. Make additional repayments at any time without penalty. Free online redraw. Available for new and used cars. Can also be used for motorcycles, boats, caravans, trailers or any registrable vehicle.

    Repayment terms from 1 year to 5 years. Representative example: a 5 year $30,000 loan at 6.48% would cost $35,202.21 including fees.

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    Details
  • Used Car Loan

    Up to 5 years old, Fixed, Secured

    Interest rate
    comparison rate
    Monthly repayment
    9.19% p.a.
    10.30% p.a.based on $30,000
    over 5 years

    Used Car Loan 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 9.19% would cost $38,411.24 including fees.

    Compare
    Details
  • Used Car Loan

    Up to 5 years old, Variable, Secured

    Interest rate
    comparison rate
    Monthly repayment
    7.39% p.a.
    8.52% p.a.based on $30,000
    over 5 years

    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 7.39% would cost $36,854.29 including fees.

    Compare
    Details
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Car loan resources

Reviews, news, tips and guides to help find the best car loan for you.

What is a used car loan?

A used car loan is a financial agreement where you borrow money to purchase a pre-owned vehicle, and then repay the amount plus interest over a set period. 

These loans are available from various sources, including:

  • Traditional banks and credit unions

  • Online lenders

  • Dealership finance departments

  • Peer-to-peer lending platforms.

Most used car loans offer fixed interest rates and terms ranging from 2-7 years. Your monthly repayment will depend on several factors: the loan amount, interest rate, loan term, and whether you make a deposit or have a trade-in vehicle.

Why consider a used car?

Buying a used vehicle offers several advantages like avoiding the steep depreciation that new cars experience in their first few years. Additionally, used cars typically come with lower purchase prices, reduced insurance costs, and a wide variety of available models. However, balancing these benefits against maintenance costs and the possibility of fewer warranty protections is important.

Fixed or variable rate, what’s the better car loan deal?

As you start to compare car loans, in addition to having the choice of a secured or unsecured loan,  you’ll also be able to choose between either a fixed or variable interest rate. The interest rate you choose should depend on your personal circumstances.

  • Fixed interest rates: If you choose a fixed rate loan, you’ll be ‘locking in’ your rate for the entirety of the loan term. This means that no matter how the market moves, your interest rate and repayments will always stay the same. This can make it easier to budget. But on the downside, if you do get ahead on your repayments and pay the loan off early, you may be charged a fee.

  • Variable interest rates: Meanwhile, variable interest rates change with the market, and can either rise or fall during your loan term. With this type of interest rate, there’s rarely an early repayment fee and usually no exit fees, so if you can often pay them off with no additional cost.

Budget with the 20/4/10 rule

Before beginning your car search, it's important to establish a realistic budget. Experts generally recommend following the “20/4/10” rule. 

There are three basic elements to this:

  • Make a 20% deposit

  • Finance the car for no more than 4 years

  • Keep total monthly vehicle expenses under 10% of your gross monthly income.

Also, remember to account for the total cost of ownership, including:

  • Monthly loan repayments

  • Insurance premiums

  • Regular maintenance

  • Fuel costs

  • Registration and licensing fees

  • Emergency repairs.

How do you improve chances of getting approved for a car loan?

A few things you can do to increase your chances of getting approved for a used car loan are:

  • Improve your credit score: In order to get approved for a used car loan (or any loan for that matter), you’ll need a good credit score to prove to the lender that you’re a borrower who’ll pay the loan back on time. So if your credit score is in poor shape, be sure to put in the work to improve it before you consider applying for a loan.

  • Ditch the debt: On that note, you’ll want to rid yourself of any unnecessary debt that’ll harm your chances of getting approved. Start paying your bills on time and pay off any old credit card balances or other lingering debts.

  • Shop around: Make sure to look around first by comparing used car loans and only apply for one if you think you’ll have a fair chance of being approved for. 

The advantage of pre-approval 

Getting pre-approved for a car loan before shopping offers several advantages:

  • Knowing exactly how much you can spend

  • Understanding your likely interest rate and terms

  • Strengthening your negotiating position with sellers

  • Protecting against dealership finance markups

  • Simplifying the final purchase process.

Most pre-approvals are valid for 30-60 days, giving you time to shop with confidence.

Smart shopping strategies

Once you’re pre-approved and ready to shop for a vehicle, take the time to research reliability ratings and common issues with the models you’re considering. 

Request vehicle history reports for any car that interests you and get an independent mechanic to inspect it before buying. As always, compare prices across multiple sellers to ensure that you’re getting a fair deal. 

Lastly, don’t overlook certified pre-owned vehicles, as they can offer warranty protection for your investment. 

Mastering negotiation

The art of negotiation can go a long way. Whether dealing with a dealership or private seller, successful negotiation requires preparation:

  • Know the market value of your target vehicle

  • Negotiate the vehicle price before discussing finance

  • Watch for unnecessary add-ons or hidden fees

  • Get all promises and agreements in writing

  • Be prepared to walk away if terms aren't favourable.

Managing your car loan successfully

After securing your loan, there are a few things to do. 

First, set up automatic payments to avoid late fees. Next, align payment dates with your pay schedule for better cash flow. Then make fortnightly repayments to help reduce overall interest.

Also, be sure to keep maintenance records for your investments and build an emergency fund for unexpected expenses. If you face financial difficulties, contact your lender promptly to discuss options like repayment modifications or refinancing.

Looking ahead

In summary, a used car loan can be a good way to save on vehicle ownership when approached strategically. So, to make sure you set yourself up for success, keep these things in mind:

  • Take time to improve your credit before applying

  • Get pre-approved to strengthen your negotiating position

  • Consider total ownership costs, not just the monthly repayment

  • Read all documentation carefully before signing

  • Maintain open communication with your lender.

You’re all set - time to start comparing! You can scroll up to find car loan providers specialising in used vehicles, or visit our car loans page if you're interested in a new vehicle.

Picture of JP Pelosi
JP Pelosi
RG146
Managing editor

Managing Editor Jean-Paul (JP) Pelosi leads the editorial team, with over 20 years of experience writing for top outlets like The Guardian, The Sydney Morning Herald and News.com.au. JP's expertise in home loans and property is complemented by his rich background at major financial firms including CommBank, Suncorp and Amex. Holding a Master's in Communications and international experience in journalism, JP combines passion with skill and has a unique ability to apply this editorial experience and financial knowledge to advise the team on how to create engaging financial content for Australian consumers.

More FAQs about used car loans

Are there any restrictions with a car loan for second-hand cars? 

When applying for a loan to purchase a used car, one common restriction is the age of the vehicle. Different lenders have varying definitions of what qualifies as an "old car." Some may consider a car that is over 2 years old to be old, while others may not approve a loan for a vehicle that is over 12 years old.

How will I receive my funds to buy my used car?

Once your loan has been approved, then funds will either be deposited into your bank account or if you are buying through a dealer they can be sent directly to the car dealership.

Can I switch car loans?

Yes, you can. If you find that your financial circumstances change during the course of your loan term there is an option to refinance car loans. So if you ever need to refinance your used car loan, you can check out our car loan refinance table.

What else should I consider if I'm borrowing money for a used car? 

If you’re borrowing money to buy a used car then you’ll want to make sure that the vehicle is in the best possible condition for its age. You don’t want to be stuck paying off a loan for a car that spends more time in the mechanics than it does on the roads.

So, when buying a used car it’s wise to get an independent inspection done on the car to check:

  • The number of kilometres the car done compared to its age

  • Whether there any dents, scratches or bubbles in the paint

  • Whether there are any cracks in the windscreen

  • Check the car for rust

  • That the tyres exceed the legal tread depth of 1.5mm

  • That the air conditioning, windows and lights work.

What other car expenses will I need to budget for?

If you think that the cost of buying a car is just the initial price you pay for the vehicle, guess again. Regardless of whether you’re purchasing a secondhand or brand new vehicle, there’s a bunch of different expenses that you’ll need to budget for when buying a car, such as:

Rego:

Each year you're required to pay a registration fee in order to keep your car on the road. On top of this fee, when you register your car you’ll also need to purchase a CTP green slip and pink slip (safety check). In order to pass the pink slip safety check and register your car, you might be required to have some repairs done on your car - which could potentially be quite costly.

Car insurance:

Another cost that comes with owning a car is car insurance. Depending on the level of cover you buy (either third-party or comprehensive) your car insurance policy will cover the cost of any damage you cause to your own car or another person’s car/property if you’re involved in an accident.

What do I need to apply for a car loan?

Once you’ve found the right used car loan for you, you’ll need to have all the relevant documentation prepared for when you fill out the loan application form. This could include things like:

  • Proof of income: This could include bank statements or payslips, as lenders will need to see that you are able to repay the loan through a steady income.

  • Proof of savings: Lenders also want to see genuine savings and that you are able to spend your money wisely.

  • Proof of liabilities: This involves any debt you may have on either a credit card or home loan.

  • Proof of insurance: Depending on the lender, you may not be approved for a car loan unless you have comprehensive cover beforehand. You can use our car insurance comparison tool to sort out your car insurance policy.

  • Identification: Such as utility bills, passport, proof of age card, driver’s license, one to two year’s tax returns and bank statements

You’ll also likely need some additional information about the car itself, such as:

  • Car VIN number (to verify whether or not it’s a stolen vehicle or if there’s money owed on it)

  • Registration plate 

  • Motor number 

  • Car make, year and model.

Car Loan Reviews

St.George Secured Personal Loan
Overall 9/10
Overall very satified

I have never had a better car loan then through St George through covid they were very helpful and extended my loan for 6 months to accommodate for time lost due to work

Read full review

I have never had a better car loan then through St George through covid they were very helpful and extended my loan for 6 months to accommodate for time lost due to work

Price
8/10
Customer service
10/10
Convenience
10/10
Trust
10/10
Less
Stevie lee, New South Wales, reviewed about 1 month ago
Heritage Bank Car Loan
Overall 10/10
Excellent experience- highly recommend

Organised a new car loan as appeared to be the best rate available that I could find. I was impressed by the minimal wait time on phone to find out about loan product. No hidden fees, very transparent. The application was mostly done over the phone, but I was informed prior the time that it would take to complete. Sarah was outstanding with her communication and kept us informed throughout the process. I would highly recommend, level of service was outstanding.

Read full review

Organised a new car loan as appeared to be the best rate available that I could find. I was impressed by the minimal wait time on phone to find out about loan product. No hidden fees, very transparent. The application was mostly done over the phone, but I was informed prior the time that it would take to complete. Sarah was outstanding with her communication and kept us informed throughout the process. I would highly recommend, level of service was outstanding.

Price
10/10
Features
10/10
Customer service
10/10
Convenience
10/10
Trust
10/10
Less
Michael, Queensland, reviewed 14 days ago
BOQ Specialist Car Loan
Overall 1/10
Useless customer service

Poor service misleading advice, do not waste your time

Read full review

Poor service misleading advice, do not waste your time

Customer service
1/10
Convenience
1/10
Trust
1/10
Less
Carl, Queensland, reviewed 6 months ago

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