IMB New Car Loan
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0 interest car loans or new car loans at a 1% p.a. is usually offered by dealers.
At first glance, this offer is as it appears. You purchase the car at the advertised price and then make monthly repayments on the principal of the car without any interest being applied to it.
However, while it may sound like a good deal, there are a number of things you should be aware of before committing to a 0% car loan.
Find out how a 0% car finance actually works and whether it might be right for you.
Interest-free car loans are offered by dealership financiers and are generally used as a sales tactic. While you won't pay any interest on the loan, you may not actually be saving any money compared to a normal car loan. The dealer may be charging you a higher price for the car, or adding on extra fees and charges that end up costing you more than any interest repayments would. This will also generally be true of deals offering 1% finance, as the total cost of the loan may still be greater than a regular car finance option that charges a higher rate.
The 0-1% interest may also only be offered for a certain period of time, after which the loan reverts to a higher interest rate. You may also be required to make a large lump sum payment at the end of the loan, called a balloon payment, that will lower the size of your repayments but may be harder to budget for.
As with any financial product, it's important that you understand the terms and conditions of any 0% car loans you may be considering, and you should always compare a range of different loans to find the finance option that's right for you.
Here are the main points to keep in mind:
This depends. A 0-1% car loan won't necessarily cost less than a normal loan with a higher rate, as it may come with additional fees or costs, or charge you a high price for the car.
Interest-free car finance offers will also generally require you to make a larger balloon payment at the end of the loan term. This will reduce the size of your regular repayments but will need to be budgeted for throughout the loan term so that you have enough saved to cover the balloon payment when the time comes. By comparison, standard car loans will require you to pay more interest, but the repayments you make will be consistent and your debt should be paid off in full within the loan term, which may make it easier to budget for.
Car manufacturers may offer no-interest – or 0% car finance – deals through their dealerships in order to entice new business. It is very unlikely to find a traditional lender offering a car loan with a 0% or 1% interest rate.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
When it comes to car finance, there are a number of 0% loan options that may work in your favour. Consider the points below when comparing.
Before you lock yourself into this type of arrangement, you should always compare a range of loan products. While paying 0% or 1% interest on your car finance may seem the best option, this will not necessarily be the case and you may be able to save money by using a regular car loan.
A used car loan with high borrowing amounts and both secured and unsecured options.
Find the best car loan for your circumstances with CarClarity. Rates start from just 3.35% p.a. and borrowers can apply for loans from $10,000 to $250,000 for new and used cars.
If you’re in the market for a new car, the Great Southern Bank Fixed Rate Car Loan may be able to give you the funds you need. With the security of a fixed rate and flexible repayments, this loan might be what you need to own your new set of wheels.
Finder research shows 2.7 million Australians have a car loan. Find out how much Aussies are borrowing, and how this has changed over time.
Opt for an Alex car loan and receive a personalised interest rate from 6.95% to 19.99%. Alex's car loans have no ongoing fees and are available from $2,100 to $30,000.
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Apply for a caravan loan with finance broker Stratton Finance and receive an interest rate from 5.49% p.a.
Stratton Finance's boat loans range from $10,000 to $200,000 with rates from 5.99% p.a. Secured and unsecured options available.
Get a loan for a new or used vehicle from $2,001 to $75,000. Rates start at just 5.35% p.a. and loan terms vary from 1 to 7 years.
Compare soon-to-launch electric and hybrid cars.
You'll receive a fixed rate of 4.88% p.a.
A low minimum borrowing amount of $2,000 that you can use to purchase a new car or one up to two years old.
You'll receive a fixed rate of 4.69% p.a.
Take advantage of a competitive rate, pre-approval and no early repayment fees when you finance a car under two years old.
You'll receive a fixed rate from 5.99% p.a.
A larger loan of $5,000 or more to help you buy a new or used car. 5-hour pre approval available and no ongoing fees.
You'll receive a fixed rate of 5.99% p.a.
Purchase a new or used car up to 2 years old and benefit from a fixed rate and no monthly fees. Pre-approval available within 5 business hours.
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