Secured car loans Background

Secured car loans

Looking for a secured car loan? The table below shows secured car loans from our Online Partners, based on a loan amount of $40,000 for a new car.

Group Manager, Research & Ratings
Senior Finance Journalist
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  • Star Rating - lowest first
  • Star Rating - highest first
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  • Interest rate - highest first
  • Comparison rate^ - lowest first
  • Comparison rate^ - highest first
  • Monthly repayment - lowest first
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star-rating-icon star-rating-icon star-rating-icon star-rating-icon star-rating-icon
6.24% Glossary
Variable Glossary
7.37% Glossary
$777.78 Glossary
star-rating-icon star-rating-icon star-rating-icon star-rating-icon star-rating-icon
6.49% Glossary
Fixed Glossary
7.62% Glossary
$782.46 Glossary
star-rating-icon star-rating-icon star-rating-icon star-rating-icon star-rating-icon
6.57% Glossary
up to 9.29% Glossary
Fixed Glossary
7.20% Glossary
up to 11.98% Glossary
$783.96 Glossary
up to $835.98 Glossary
star-rating-icon star-rating-icon star-rating-icon star-rating-icon star-rating-icon
7.29% Glossary
up to 8.99% Glossary
Fixed Glossary
8% Glossary
up to 9.71% Glossary
$797.53 Glossary
up to $830.14 Glossary
star-rating-icon star-rating-icon star-rating-icon star-rating-icon star-rating-icon
12.99% Glossary
Variable Glossary
13.36% Glossary
$909.92 Glossary
star-rating-icon star-rating-icon star-rating-icon star-rating-icon star-rating-icon
12.99% Glossary
Fixed Glossary
13.54% Glossary
$909.92 Glossary

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Unsure of a term in the above table? View glossary

The initial results in the table above are sorted by Star Rating (High-Low) , then Comparison rate^ (Low-High) , then Provider Name (Alphabetical) . Additional filters may have been applied, see top of table for details.

About secured car loans

If you are in the market to purchase a new or almost new vehicle, a secured car loan might be an option. Here, we consider how these kinds of loans work, as well as some potential things to be wary of. 

What is a secured car loan?

A secured car loan is one in which your car acts as collateral or ‘security’ against the money you have borrowed. This means that, if you are unable to make your required repayments on the loan, your lender will have the right to repossess your vehicle in order to recoup any money they may still be owed.

Explore: Unsecured car loans

How do secured car loans work?

Secured car loans work in much the same way as any other kind of loan, in that you will apply to your lender of choice, who will then assess your financial position and ability to repay the loan, and potentially grant you approval. After this, you will pay off the balance of the loan in agreed instalments, typically monthly, along with any interest that is owing, until the debt is repaid, or until you refinance the loan.

Generally speaking, secured car loans can only be used to purchase new or almost new cars – a lender might not accept an older second-hand car as security against the loan. In this situation, if you still wish to apply for a loan to purchase a vehicle, you may need to consider another option, such as an unsecured car loan.

From our friends at Canstar Blue: How much do Australians spend on new cars?

Frequently Asked Questions about Secured Car Loans

A secured car loan is a loan that exists specifically for the purpose of buying a new or almost-new vehicle, whereas an unsecured car loan is actually just another name for a personal loan that you might use to purchase a car.

The key difference is that, when you take out a secured car loan, the car itself acts as collateral, meaning your lender will have the right to repossess and sell it in the event that you cannot make your required repayments.

Unsecured personal loans do not have collateral, meaning that if you take one out and are unable to make your required repayments, your lender may take you to court to recover the debt personally.

Generally speaking, secured car loans will have lower interest rates and unsecured personal loans used to buy a car. This is because banks and lenders tend to view secured loans as less risky, as they have the security of an asset (in this case, a car) that they can repossess to recoup their money if you cannot make your repayments.

A secured car loan may allow you to borrow anywhere up to $100,000 or more for the purchase of a vehicle. By contrast, with an unsecured loan used to purchase a car, you may only be able to borrow an amount of up to $50,000. This is likewise the case as banks and lenders may tend to view secured loans as less risky than unsecured ones.

The question of where you can find the ‘best’ secured car loan is subjective, and the answer will come down to your own personal needs and circumstances. That said, when to comes to comparing loans, there are certain things you can consider when deciding which one is most suitable for you, such as:  

  • The fees and charges attached: Some loans can come with establishment and ongoing fees, so it is important to read the product disclosure statement (PDS) of any loan product, or ask the lender what fees you might be charged. 
  • The interest rate: The interest rate of a loan refers to the amount of interest you will be charged on the balance of the loan, and therefore gives an idea of how much you will repay each month. 
  • The comparison rate: This is a figure that lenders are required to display alongside the interest rate of a loan, that is intended to give a true picture of how much it will cost when interest, fees and charges are factored in. The comparison rate may reveal that a loan which appears to be the cheapest option may not actually be the most affordable, when fees and charges are factored in. 
  • Whether the interest rate is fixed or variable: A fixed interest rate will remain the same for the term of the loan, giving you certainty in your repayments, while variable rates can go up and down depending on market forces and your lender’s decisions. Fixed rate loans can offer a sense of security in your repayments but can be more expensive than variable rate ones. 
  • The term of the loan: This is the amount of time you will have to repay the balance of the loan. A survey of personal loan providers on Canstar’s database shows that personal loans can typically have terms of one to seven years, but this will depend on the individual provider.

Some potential pros of secured car loans can include:

  • Lower interest rates than unsecured loans
  • A wide variety of lenders who may offer them
  • The ability to borrow a larger sum than you would with an unsecured loan

Some potential cons of secured car loans include:

  • Secured car loans may restrict you in terms of the vehicle you can purchase
  • Depending on the interest rate and the term of the loan, you may end up paying a large amount in interest on top of the principal
  • Cars are a depreciating asset, meaning that if you purchase a new one with a loan, it will go down in value while you are paying off the balance

Latest in car loans

Canstar Car Loans Star Ratings and Awards

Looking for an award-winning car loan or to switch lenders? Canstar rates products based on price and features in our Personal and Car Loans Star Ratings and Awards. Our expert Research team shares insights about which products offer 5-Star value and which providers offer outstanding value overall.

Canstar rates a range of financial products, covering banking, insurance and investment. We also reveal which providers have the most satisfied customers in our dedicated Customer Satisfaction Awards.

Personal and Car Loans Awards

About the authors

Alasdair Duncan, Senior Finance Journalist

Alasdair Duncan
Alasdair Duncan is a Senior Finance Journalist at Canstar, specialising in home loans, property and lifestyle topics. He has written more than 200 articles for Canstar and his work is widely referenced by other publishers and media outlets, including Yahoo FinanceThe New DailyThe Motley Fool and Sky News. He has featured as a guest author for property website homely.com.au. In his more than 15 years working in the media, Alasdair has written for a broad range of publications. Before joining Canstar, he was a News Editor at Pedestrian.TV, part of Australia’s leading youth media group. His work has also appeared on ABC News, Junkee, Rolling Stone, Kotaku, the Sydney Star Observer and The Brag. He has a Bachelor of Laws (Honours) and a Bachelor of Arts with a major in Journalism from the University of Queensland. When he is not writing about finance for Canstar, Alasdair can probably be found at the beach with his two dogs or listening to podcasts about pop music. You can follow Alasdair on LinkedIn and Twitter.

Joshua Sale, Group Manager, Research & Ratings

Joshua Sale

As Canstar’s Ratings Manager, Josh Sale is responsible for the methodology and delivery of Canstar’s Personal & Car Loans Star Ratings and Awards. With tertiary qualifications in economics and finance, Josh has worked behind the scenes for the last five years to develop Star Ratings and Awards that help connect consumers with the right product for them.

Josh is passionate about helping consumers get hands-on with their finances. Josh has been interviewed by media outlets such as the Australian Financial Reviewnews.com.au and Money Magazine.

You can follow Josh on LinkedIn, and Canstar on Twitter and Facebook.


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Canstar may earn a fee from its Online Partners for referrals from its website tables, and from sponsorship or promotion of certain products. Fees payable by product providers for referrals and sponsorship or promotion may vary between providers, website position, and revenue model. Sponsorship/promotion fees may be higher than referral fees. If a product is sponsored or promoted, it’s an ad and it is clearly marked as such. An ad might appear in different places on our website, such as in comparison tables and articles. Ads may be displayed in a fixed position in a table, regardless of the product's rating, price or other attributes. The location of an ad doesn’t indicate any ranking or rating by Canstar. Payment of fees for ads does not influence our Star Ratings. See How We Get Paid to find out more.

The Car and/or Personal Loan Star Ratings identified in the tables are updated monthly. The results don’t include every provider in the market and we may not compare all features relevant to you. Current rates and fees are displayed and may be different to what was rated. You can find a description of the initial sort order below the table. You can use the sort buttons at the top of each column to re-order the display. Learn more about our Car Loans Star Rating Methodology. The rating shown is only one factor to take into account when considering products.

The products and Star Ratings in the table might not match your exact inputs in the selector. Sometimes the methodology uses profiles with categories or bands (e.g. income, loan amount or monthly spend), but sometimes a single methodology, without any categories or bands, is applied. The results will show the products that most closely match your selection, based on our profiles. If you are unsure about any terms used in the comparison table please refer to the glossary.

What is a Target Market Determination?

A Target Market Determination (‘TMD’) is a document that explains which people particular financial products may be suitable for (the target market) and sets out any conditions around how financial products can be distributed to consumers.

Why do product issuers provide Target Market Determinations?

From 5 October 2021, TMDs are compulsory for most financial products.

Issuers and distributors of financial products must take reasonable steps that are likely to result in financial products reaching consumers in the target market defined by the product issuer.

We recommend that you consider the TMD before making a purchase decision. Contact the product issuer directly for a copy of the TMD.

Any advice on this page is general and has not taken into account your objectives, financial situation or needs. Consider whether this general financial advice is right for your personal circumstances. Canstar provides information about credit products. We’re not suggesting or recommending a particular credit product for you. If you decide to apply for a loan, you will deal directly with the provider, not with Canstar. Consider the Target Market Determination (TMD) before making a purchase decision. Contact the product issuer directly for a copy of the TMD. It’s important you check rates and product information directly with the provider. For more information, read our Detailed Disclosure. ^Read the Comparison Rate Warning.

Canstar may earn a fee from its Online Partners for referrals from its website tables, and from sponsorship or promotion of certain products. Fees payable by product providers for referrals and sponsorship or promotion may vary between providers, website position, and revenue model. Sponsorship/promotion fees may be higher than referral fees. If a product is sponsored or promoted, it’s an ad and it is clearly marked as such. An ad might appear in different places on our website, such as in comparison tables and articles. Ads may be displayed in a fixed position in a table, regardless of the product's rating, price or other attributes. The location of an ad doesn’t indicate any ranking or rating by Canstar. Payment of fees for ads does not influence our Star Ratings. See How We Get Paid to find out more.