New Car Loans

If you choose to take out a new car loan from a lender, you’ll need to make regular repayments throughout a dedicated period of time in order to pay off your loan (also known as the lump sum or principal amount borrowed). This time period is usually between 12 months to five years or more.

Plus, you’ll also need to factor in the interest rate and pay the relevant amount of interest on top of each loan repayment.

Keep in mind that new car loans are typically provided for cars less than two years old. For cars older than two years old, see our information pages on Used Car Loans and Personal Loans.

If you decide to take out a loan to buy a new car, you can choose between a secured or unsecured loan.
However, keep in mind that car loans are almost always secured. Here’s why:

• A secured loan means you need to provide an asset to your lender – typically your car – as collateral in case you need to back out of your loan.

People tend to go for a secured loan when they’re buying a car, as the interest rates are usually lower, because the risk is generally lower for the lender.

• An unsecured loan could be a good option if you’re looking for a small loan for a short period of time. In this case, you won’t need to offer up any assets as security for your lender.

The interest rates for unsecured loans are typically higher, as the risk to the lender is generally higher. You might also need a guarantor on your application if this is your first loan.

Whether you’ve owned a car before or you’re thinking about buying your first one, a new car could be a great addition to your lifestyle.

But if you’re not in a position to pay off the costs of a new car upfront, you might like to compare car loans now to help you get on the road sooner rather than later.

We’ll help you compare new car loans so you can make your way to the dealership with confidence.

Whether you’ve owned a car before or you’re thinking about buying your first one, a new car could be a great addition to your lifestyle.

But if you’re not in a position to pay off the costs of a new car upfront, you might like to compare car loans now to help you get on the road sooner rather than later.

We’ll help you compare new car loans so you can make your way to the dealership with confidence.

When it comes to repayments, there are also fixed interest rates and variable interest rates.

• Fixed interest rate: This means the loan repayments for your car are set at a fixed amount for an agreed period of time, which is usually a minimum of 12 months.

A fixed interest rate could be a great option for you to quickly pay off your car by avoiding increases in your repayments, as the markets tend to fluctuate. But it could also mean you might miss out on lower interest rates on your repayments when interest rates drop.

• Variable interest rate: This means your car repayments depend on the fluctuating interest rate, so when rates rise, so could your repayments. But if interest rates decrease, your repayments could too.

You would typically be required to make repayments every fortnight or every month. This depends on your provider, the type of car loan you choose, and the amount of money you borrow.

The amount you borrow from your bank or financial lender depends on your unique situation, including your employment status and income, your credit history, and your ability to make repayments.

Your lender might also choose to conduct a credit check, so you might want to find out what your credit score is. You can learn more about credit scores at Moneysmart.

If you’ve had trouble making loan repayments in the past, or you’ve regularly made late payments, a lender might offer you a lower amount of finance in your application.

If you’re ready to compare new car loans, you can start here online with iSelect.* See the range of providers and simply click on an option that suits you to begin your application.