Low rate car loans – October 2019

Alex Brewster By on October 3, 2019
 

Photo by Negative Space from Pexels

Looking to purchase a new car? Savings.com.au has compiled some of the lowest-rate car loans on the market this month. 

This page provides a snapshot of the market for car loans, displaying some of the lowest interest rates available for:

Low interest fixed rate car loans – new cars 

Company Advertised rate Comparison rate* Monthly repayments  
Car Loan (New) 4.89% 5.44% $370 More details
Car Loan (Up to 2 years old) 5.49% 5.84% $382 More details
New Car Loan 5.49% 5.87% $382 More details
Discounted Personal Loan (Car Loan) 5.64% 5.99% $383 More details
New Car Loan Fixed 6.45% 6.66% $391 More details
Secured Car Loan Fixed 8.49% (up to 10.99%) 9.54% (up to 12.02%) $410 (up to $435) More details
Ad rate Comp rate* Repayments
Car Loan (New)
4.89% 5.44% $370
More details
Car Loan (Up to 2 years old)
5.49% 5.84% $382
More details
New Car Loan
5.49% 5.87% $382
More details
Discounted Personal Loan (Car Loan)
5.64% 5.99% $383
More details
New Car Loan Fixed
6.45% 6.66% $391
More details
Secured Car Loan
8.49% (up to 10.99%) 9.54% (up to 12.02%) $410 (up to $435)
More details

*Data accurate as at 3 October 2019. Rates based on a loan of $20,000 for a five-year loan term. Products sorted by advertised rate, then by company name (A-Z). View disclaimer.

Low interest variable rate car loans – new cars 

Company Advertised rate Comparison rate* Monthly repayments  
Low Rate Secured Loan 4.94% 5.58% $377 More details
Personal Loan (Property Owners) 7.89% 8.10% $404 More details
Secured New Car Loan 8.39% 8.71% $409 More details
Personal Loan Unsecured Variable 10.69% (up to 18.69%) 11.58% (up to 19.53%) $432 (up to $515) More details
Unsecured Variable Personal Loan 11.89% 12.15% $444 More details
Flexi Loan Variable 13.45% 13.71% $460 More details
Ad rate Comp rate* Repayments
Low Rate Secured Loan
4.94% 5.58% $377
More details
Personal Loan (Property Owners)
7.89% 8.10% $404
More details
Secured New Car Loan
8.39% 8.71% $409
More details
Personal Loan Unsecured Variable
10.69% (up to 18.69%) 11.58% (up to 19.53%) $432 (up to $515)
More details
Unsecured Variable Personal Loan
11.89% 12.15% $444
More details
Flexi Loan Variable
13.45% 13.71% $460
More details

*Data accurate as at 3 October 2019. Rates based on a loan of $20,000 for a five-year loan term. Products sorted by advertised rate, then by company name (A-Z). View disclaimer.

Low interest fixed rate car loans – used cars

Company Advertised rate Comparison rate* Monthly repayments  
Car Loan (Dealer Only) 4.89% 5.44% $188 More details
Used Car Loan Fixed 6.45% 6.66% $195 More details
3yrs Fix Car Loan 6.45% 6.59% $195 More details
Secured Personal Loan 6.49% 6.88% $195 More details
Car Loan Secured 6.69% 7.04% $197 More details
Secured Car Loan Fixed 8.49% (up to 10.99%) 9.54% (up to 12.02%) $205 (up to $212) More details
Ad rate Comp rate* Repayments
Car Loan (Dealer Only)
4.89% 5.44% $188
More details
Used Car Loan Fixed
6.45% 6.66% $195
More details
3yrs Fix Car Loan
6.45% 6.59% $195
More details
Secured Personal Loan
6.49% 6.88% $195
More details
Car Loan Secured
6.69% 7.04% $197
More details
Secured Car Loan Fixed
8.49% (up to 10.99%) 9.54% (up to 12.02%) $205 (up to $212)
More details

*Data accurate as at 3 October 2019. Rates based on a loan of $10,000 for a five-year loan term. Products sorted by advertised rate, then by company name (A-Z). View disclaimer.

Low interest variable rate car loans – used cars

Company Advertised rate Comparison rate* Monthly repayments  
Low Rate Secured Loan 4.94% 5.58% $188 More details
Personal Loan (Property Owners) 7.89% 8.10% $202 More details
Used Car Loan Unsecured 9.95% 10.09% $212 More details
Personal Loan Unsecured Variable 10.69% (up to 18.69%) 11.58% (up to 19.53%) $216 (up to $258) More details
Unsecured Variable Personal Loan 11.89% 12.15% $222 More details
Flexi Rate Car Loan 13.45% 13.71% $230 More details
Ad rate Comp rate* Repayments
Low Rate Secured Loan
4.94% 5.58% $188
More details
Personal Loan (Property Owners)
7.89% 8.10% $202
More details
Used Car Loan Unsecured
9.95% 10.09% $212
More details
Personal Loan Unsecured Variable
10.69% (up to 18.69%) 11.58% (up to 19.53%) $216 (up to $258)
More details
Unsecured Variable Personal Loan
11.89% 12.15% $222
More details
Flexi Rate Car Loan
13.45% 13.71% $230
More details

*Data accurate as at 3 October 2019. Rates based on a loan of $10,000 for a five-year loan term. Products sorted by advertised rate, then by company name (A-Z). View disclaimer.

Car loan comparison

There are many factors to consider when choosing a car: the make, model, year, safety-rating, fuel-economy and the number of cupholders, just to name a few.

But when it comes to choosing a car loan, arguably the most important factor is the interest rate. It’s vital you shop around when taking out a loan for a car as interest rates can massively vary between loans.

Car loan interest rate

It’s also important to be aware of the difference between a comparison rate and the advertised rate. The advertised rate is the annual rate of interest you’ll be charged on your debt, whereas the comparison rate reflects the advertised rate PLUS the fees and charges you’ll pay – giving you a truer depiction of the loan’s actual cost.

For example, a car loan with an advertised rate of 6% but a comparison rate of 9% is likely to have large fees. All accredited lenders in Australia are legally required to display the comparison rate beside any advertised rate to make it easier for consumers to compare loans from different lenders. But comparison rates should only be used as a guide – it’s important you look into all the fees and charges yourself before committing to anything.   

If you’re currently in the market for a cheap car loan, use our tables below to check out some of the lowest-rate five-year car loans available from a snapshot of lenders on the market. 

The entire market was not considered in selecting the products below. Rather, a cut-down portion of the market has been considered which includes retail products from the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks.

Car Loans in Australia

Cars are a passion for some but a pain for others – symbolising something akin to a cash-burning machine. Generally, a car will be the second most expensive purchase someone will make in their life – behind a house.

Most Australians don’t have tens of thousands of dollars lying around to readily be able to buy a new car. This was evident in 2017 when research from a royal commission investigation found that 90% of all car sales are arranged through finance – 39% of those are arranged through dealerships, while the remaining 61% is financed from other sources, like banks. 

Secured vs unsecured loans

You’ll see some of the loans above are secured while others are unsecured, so what’s the difference? 

A secured loan is a loan that’s guaranteed by an asset, usually the car itself. The lender uses this asset as security, so if you can no longer afford your repayments, they have the right to repossess the asset and use it to cover the remaining cost of the loan. This added security allows the lender to offer a lower interest rate for a lot of secured car loans since they have the secured asset as a backup. When it comes to cars, lenders have different rules, but you’ll generally have to provide details of the vehicle and be looking at a relatively new car. 

Unsecured loans can be used for a wide variety of things, like a holiday, wedding or maybe even a gorilla. Whatever it’s for, an unsecured loan doesn’t have the security for the lender that a secured loan does, so these loans tend to have a higher interest rate, although this isn’t always the case. You might get an unsecured loan when buying an older car, or when buying the car as a gift for someone. They’re generally harder to be approved for as they rely on whether you have a good credit history. 

New vs used cars

You’ll see in the tables above we’ve displayed loans for both new and used cars, so how much of a difference does that make?

When it comes to secured car loans you’ll see that used car loans can have marginally higher interest rates. This is simply due to them being less reliable assets. 

What difference does a good interest rate make?

Let’s have a look at how much a small margin on your interest rate can make, using our car loan repayment calculator for a five-year loan.

 Secured loan Unsecured loan 
Loan Amount$20,000$20,000
Interest rate5%6.5%
Monthly repayments$377.42$391.32
Total loan payable $22,645.20$23,479.92

So a secured $20,000 car loan over five years in this example could cost you around $800 less in total interest costs compared to an unsecured loan, assuming you’re paying a pretty low-interest rate on each.  Take this with a grain of salt though – it doesn’t factor in several things like the fees on your car loan, what your balloon payment is (a one-off lump sum that you agree to pay your lender at the end of the car loan’s term in return for lower monthly repayments), any possible introductory rates and whether or not your rate changes (if you take out a variable loan).

Savings.com.au two cents

Car repayments on top of rent or mortgage repayments, groceries and every other bill in life can be a real financial burden to those that have them. You can see in the examples above how much of a difference a good car loan interest rate can make. That’s why it’s worth your time to shop around for the best rate, and revisiting this page to get an idea of which lenders may be offering market-leading rates. 

Remember, just because you can borrow a certain amount doesn’t mean you should, so stay within your means. More importantly, do your research not just on your loan but on your vehicle as well. Cars are a depreciating asset so make sure you pick a loan length suitable to the vehicle and your budget. The last thing you want is to be paying for a car that isn’t drivable.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in 2018. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate includes both the interest rate and the fees and charges relating to a loan, combined into a single percentage figure. The interest rate per annum is based on a loan credit of $150,000 and a loan term of 25 years.

Alex Brewster
Alex joined Savings.com.au in 2019. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.
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