Car finance in Australia is a huge market. From dealership loans to novated leases to personal loans. But with so many options, it’s easy to lock in a deal that looks good upfront but costs thousands more over time.
Main options
- Secured car loans – lower interest rates, car used as security.
- Unsecured personal loans – more flexible, but higher rates.
- Novated leases – tax benefits for eligible employees.
- Dealer finance – convenient but often comes with higher rates or hidden fees.
What to watch
- Balloon payments: these reduce monthly repayments but require a large final payment.
- Early repayment fees: common in fixed-term contracts.
- Add-ons like insurance or warranties: often overpriced when bundled in finance.
Pro Tip: Always compare the comparison rate (which includes fees) rather than just the advertised interest rate. In Australia, lenders are legally required to display this rate so you can make an apples-to-apples comparison.
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