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comparing more brands than any other.

Latest in Car Loans

Recent Five Star Ratings

Helpful Car Loans Information

What is a car loan?CANSTAR - Outstanding Value - Car Loan

A car loan is a type of personal loan used for buying a motor vehicle such as a car, ute, 4WD, motorbike, or other road vehicle. A car loan is helpful when you don’t have enough savings to afford the vehicle of your choice, but you can afford to repay a loan in monthly installments.

There are a few different types of car loans:

  1. New car loan: Available for buying cars that are brand new, and some lenders will let you use a new car loan for a car that is 1, 2, or even 3 years old. A new car loan will usually be secured by the car, and the interest rate may be lower the more the car is worth.
  2. Used car loan: Available for buying cars that are up to 5 or 6 years old and do not qualify for a new car loan. A used car loan is usually secured by the value of the car.
  3. Unsecured car loan: Available for buying cars older than 5 or 6 years old that do not qualify for a used car loan. Unsecured car loans typically have higher interest rates than secured car loans.

Find out how car loans work and types of car loans, then compare

car loans

for your sweet ride using the comparison selector tool at the top of this page.

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Canstar Research Library - Car Loans

Some of the pros and cons of car loans are worth thinking about before deciding whether or not a

car loan

is right for your circumstances:

Benefits of a car loan:

  • You can borrow an unlimited amount – as much as you need for the car, that is – with many lenders.
  • You have 5 to 10 years to repay that amount.
  • The amount of debt is fixed, so you can’t add to it with impulse purchases like you could if you used a credit card or a line of credit on your home loan.
  • The average car loan interest rate is lower than the average rates for credit cards and personal loans (see our star ratings report for more detail).
  • If you choose a fixed rate loan, you can know and budget for exactly how much you need to repay every month.
  • By making your monthly repayments, your debt will eventually be fully paid off.

Disadvantages of a car loan:

  • You can’t increase the amount of debt, so you have to make sure beforehand that you can afford to pay all other regular running costs of the car.
  • You must make every one of your monthly repayments or you could lose the car (with a secured loan) or face court action (with an unsecured loan).

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How Canstar compares car loans

Canstar compares personal loans with our unique, sophisticated car loans star ratings methodology, which looks at both pricing and features. We present the results with our consumer-friendly star ratings, with a 5-star rating signifying that a

car loan

offers outstanding value to consumers.

 

Some of the features Canstar compares for car loans are:

  • Lending terms
  • Loan insurance
  • Security and deposit requirements
  • Repayment options
  • Switching facilities
  • Applications process

You can read the full car loans star ratings report for more information.

Compare car loans products yourself, based on your own requirements, using the comparison selector tool at the top of the page.

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Written by: TJ Ryan and Tim Smith

Car loan providers we research and rate

Below are some of the car loan providers we rate:

ANZ

Bankwest

Bendigo Bank

BOQ (Bank of Queensland)

Commonwealth Bank (CommBank)

CUA

Heritage Bank

HSBC

Liberty

NAB

Newcastle Permanent

NRMA

RACV

Suncorp

Westpac

Compare car loans using the comparison selector tool at the top of this page.

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Canstar’s^ highest rated Used Car Loans with the Lowest Comparison Rates

for a used car loan amount of $20,000 over a 3 year term in NSW.

See some of the lowest comparison rate, 5-Star rated car loan products^ on Canstar’s database. The table below displays some of the car loan products from Canstar’s database (including some products from our referral partners) sorted by Star Ratings, then comparison rate (lowest to highest), then by provider name (alphabetically).

The Star Ratings in this table were awarded in November 2019. Data is updated daily. Current rates and fees are displayed and may be different to what was rated. The search results do not include all providers and may not compare all features relevant to you. ^View the CANSTAR Personal & Car Loan Star Ratings Methodology and full report. The rating shown is only one factor to take into account when considering products. For more information, read our detailed disclosure, important notes and additional information. *Read the comparison rate warning. The comparison rate may vary depending on the loan application fee which is determined as part of credit rating during the application process.

Canstar is an information provider and in giving you product information Canstar is not making any suggestion or recommendation about a particular product. If you decide to apply for a used car personal loan, you will deal directly with a financial institution not with Canstar. Eligibility for new and used car loans is determined by each individual provider and may differ from the methodology. We recommend you confirm all details of the loan with the provider directly before making any financial decision. Rates and product information that may be available to you will be determined by the relevant financial institution in accordance with their eligibility criteria, please confirm this directly with the financial institution you select.