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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:
for your sweet ride using the comparison selector tool at the top of this page.
Some of the pros and cons of car loans are worth thinking about before deciding whether or not a
is right for your circumstances:
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:
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.
If you’re looking for finance to buy a car, you might think that signing up for the cheapest car loan you can find is the way to go. It’s worth keeping in mind that going with the lowest interest rate won’t necessarily mean you’re getting the cheapest car loan deal overall.
Up-front and ongoing fees can eat into some of the money you’d save in interest, while the features you get with the loan may boost the value you’re getting overall. For example, a car loan with a slightly higher interest rate but which allows you to make extra repayments and pay off the loan early without penalty, might better suit the needs of some borrowers and help them get ahead faster than the ‘cheapest’ car loan rate would.
It can also be a good idea to watch out for car loans that appear cheap but which require a balloon payment in order for you to own the car. This is a one-off lump sum payment at the end of the loan term that can add significantly to the cost.
Written by: TJ Ryan and Tim Smith
Below are some of the car loan providers we rate:
Compare car loans using the comparison selector tool at the top of this page.