What are the interest rates on used car loans?

Interest rates on used car finance varies widely depending on the age and condition of your car, how much it costs, the length of the loan, and your own credit history. Used car loans rates range from around 5% all the way up to 20%. And it all depends on the factors outlined above.

Which bank or lender has the best used car loans?

There really is no single best used car loan because every borrower (and every car) is different. The best loan will always have a competitive rate and minimal fees, and suit the type of car you're buying. This means you need to compare multiple car loans to find a better deal. And while many smaller online lenders often have very low rates, it's worth looking at bigger banks too. The car loan market is quite competitive across the board.

Should I buy a car that's under finance?

We've written an entire guide covering the topic of whether to buy a car under finance (known as an encumbered car). Though there's nothing wrong with buying a second-hand car that's financed, you need to be extra cautious and make sure you do your due diligence before buying.

You're probably familiar with the ANCAP crash testing and rating scheme in Australia. These star ratings are for new vehicles. For used cars, you'll want to refer to the Used Car Safety Ratings , or USCRs. These are published over at howsafeisyourcar.com.au . Bear in mind that the condition of the vehicle's bodywork and mechanical components plays a big part in its crash safety. Also, the level of corrosion is a key factor. Don't forget to check for any outstanding recalls on the vehicle make, model and build year.

How do I inspect a used car?

In short, very closely. Don't take the seller's word as gospel. Prove to yourself the car is in sound condition and working order. To help, we've created a used car buying guide checklist .

Can I get a used car loan if I've previously declared bankruptcy?

Some lenders are open to considering a person who has previously petitioned for bankruptcy. Check out our loans for bankrupts guide.

Can I get a used car loan as a student?

If you need to buy a car and you're a student, see if you're eligible by visiting our student car loans page.

Can I get a used car loan if I'm self-employed?

If you need to buy a car or commercial vehicle for your business, you'll want to check out low-doc car loans and business vehicle finance .

Can I have a balloon payment on a used car loan?

Yes, many lenders allow balloon payments on used car loans to help reduce your regular monthly repayments. You will be required to pay the agreed lump sum at the end of the loan term and this option is often restricted to vehicles that are less than ten years old.

Are interest rates higher for used car loans compared to new car loans?

Yes, interest rates for used car loans are generally higher than those for new car loans. Lenders consider older vehicles to be higher risk assets because their resale value is less certain and they are more prone to mechanical issues which could affect the security of the loan.

Is there a maximum age for a car to be eligible for a secured used car loan?

Yes, most Australian lenders require a car to be no more than 10 to 12 years old by the time the loan term finishes. If you are buying a classic car or a vehicle that exceeds these age limits, you may need to apply for an unsecured personal loan instead.

Do I need to pay a deposit for a used car loan?

No, you do not always need a deposit as many lenders offer 100% financing for used car purchases in Australia. While providing a deposit is not mandatory, doing so can reduce your total loan amount and potentially help you secure a more favourable interest rate.

What specific documents are required for a private sale used car loan?

You must provide a tax invoice or bill of sale from the private seller along with the vehicle's registration papers and engine number. Most lenders will also perform a Personal Property Securities Register (PPSR) check to ensure the car has no outstanding debt and has not been stolen.

Can I get a used car loan while on a Centrelink pension?

Yes, some specialist lenders consider Centrelink payments as a valid source of income for used car loan applications. You will generally need to prove that you have additional stable income or that your pension payments are sufficient to cover the loan repayments and your daily living expenses.

Is a pre-purchase inspection mandatory for a used car loan?

No, a professional mechanical inspection is not usually a mandatory requirement for loan approval but it is highly recommended for your protection. Some lenders may require a basic valuation or an inspection specifically for private sales to confirm the condition and market value of the vehicle before they release the funds.