“Super quick, I got lots of offers. All I had to do was choose which one! I went with Wisr because they were the cheapest. Thanks” - Angela
The lowest car loan rates are generally reserved for newer vehicles that are financed with a secured car loan.
In addition, having a strong credit score and history will strengthen your ability to get alow rate car loan (even if you aren't buying a new car).
How long you have been employed is an interest rate factor.
Your credit score and history make a big impact on what interest rate you will pay. Generally, the higher your score, the lower your rate will be.
Lenders prefer to finance new cars over older cars and therefore provide lower rates for them.
|Plenti||Rates from 4.89% p.a Comparison Rates from 5.44% p.a|
|Wisr||Rates from 4.74% to 16.01% p.a Comparison Rates from 5.56% to 16.93% p.a|
|Finance One||Car Loans Rates from 14% to 24% p.a|
|Greenlight Auto Finance||Rates from 16.99% to 27.99%|
|Jacaranda||Rates from 5.29% to 24.99% p.a Comparison Rates from 5.84% to 29.99% p.a|
|Loans.com.au||Rates from 4.67% p.a Comparison Rates from 5.22% p.a|
|Money3||Rates from 19.95% to 28.00% p.a Comparison Rates from 35.97% to 47.66% p.a|
|Now Finance||Rates from 4.45% - 15.45% p.a Comparison Rates from 4.45% - 15.45% p.a|
|FairGo Finance||Rates from 15.92% to 27.99% p.a Comparison Rates from 26.69% to 36.32% p.a|
Notice how all these rates are ‘from’ a certain percentage?
That’s because you won’t know exactly what rate you get until you apply.
When you apply, lenders will look at you and your application and adjust your rate.
Lenders assess an application for a car loan and assign an interest rate based on a number of factors:
You can get the lowest interest rates on a car loan by presenting as little risk to a lender as possible.
Interest rates are often directly tied to your risk level - the lower the perceived risk of failing to meet your repayment obligations throughout the term, the lower the interest rates available.
The lowest interest rates on a car loan are offered to borrowers who fit the profile below:
Now you know a little more about how to get the lowest rate, it’s time to look at why a low interest rate doesn’t always mean the cheapest loan
First, answer this: what does ‘the cheapest car loan’ mean to you?
If you want to get cheaper repayments on your loan, you can consider:
If you want to pay a lower amount of interest, you should consider:
To find the cheapest loans with the best rates, you’ll need to understand how loans are advertised.
In Australia, you’ll find two types of interest rates listed with loans:
The advertised rate is determined only by the interest rate applied to the loan.
**Ignore this - it’s a trap. **
Well, the only time this will matter at all is when your loan has no fees, but this doesn’t matter either because…
The comparison rate is a more realistic assessment of the loan cost - it combines the advertised rate and all the fees included with the loan.
Guess which one you’ll see more often when looking for cheap car loans or low interest car loans.
That’s right, the advertised rate. Again, ignore this and only look at the comparison rate.
This is because a comparison rate will be much higher if there are significant fees attached to the loan - which makes them unappealing to borrowers wanting the best deal.
Don’t get tricked by a deal that looks too good to be true.
You can compare cheap car loans by looking at all the factors that influence your total interest amount, total repayment amount, and your regular repayment amount. These will be influenced by:
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