Used car loans can be used to completely or partially cover the cost of a used car. Once you get a loan approved, the lender hands over the money and you can purchase the car. Then you start making monthly repayments, plus interest, until you pay off the loan.
There are a few types of finance when you're buying a secondhand car.
With secured car finance, the vehicle you purchase is held as collateral against the used car loan. As a result, lenders will offer a more competitive interest rate – but you put your vehicle at risk if you can't make repayments.
With unsecured car loans, you have more freedom on how you spend the money and no collateral is taken but as there is more risk for the lender, you will get a higher interest rate.
As there is no security, the lender is less concerned about the age or condition of the car. This is why unsecured loans are more common with older used cars. They are essentially a personal loan.
You might find finance options through used car dealerships. They can offer some attractive used car finance rates with their chosen finance partner. However, these agreements often have hefty deposits and balloon payments, which require you to make a final payment of several thousand dollars. The repayments seem smaller and cheaper than they really are.
If you're buying a used car with a secured car loan, your lender has the right to sell your car to recover its costs if you can't repay the loan. This means the lender cares about the age of the car you're buying.
Many lenders only offered secured car loans for cars that are less than 7 years old. Some lenders accept cars up to 12 years old. The older the car, the higher your interest rate may be.
An unsecured car loan doesn't require the vehicle as security. So the age of the car is not an issue.
| Lender | Product name | Maximum age of car | Loan amount | Find out more |
|---|---|---|---|---|
| Macquarie Bank | Macquarie Bank Used Car Loan Fixed | 6 years | From $10,000 | Details |
| Beyond Bank | Beyond Bank Low Rate Car Loan | 6 years | From $5,000 | Details |
| Beyond Bank | Beyond Bank Flexi Car Loan | Over 6 years | From $5,000 | Details |
| CommBank | CommBank Secured Car Loan | 5 years | $4,000 to $100,000 | Details |
| Great Southern Bank | Great Southern Bank Fixed Rate Car Loan | 7 years | From $5,000 | Details |
| Driva | Driva Car Loan | 7 years | $1,000 to $250,000 | Details |
| loans.com.au | loans.com.au - Variable Rate Used Car Loan | 8+ years | From $5,000 | Details |
| IMB | IMB Secured Personal Loan | 6 years | $2,000 to $75,000 | Details |
| NRMA | NRMA Used Car Loan | 10 years | $5,000 to $130,000 | Details |
| OurMoneyMarket | OurMoneyMarket New Car Loan | 10 years | $2,001 to $75,000 | Details |
| People's Choice Credit Union | People's Choice CU Discounted Personal Loan (Car Loan) | 10 years | $20,000 to $120,000 | Details |
| RACV | RACV Used Car Loans | 10 years | From $5,000 | Details |
| St.George Bank | St.George Secured Personal Loan - Fixed Rate | 12 years at loan expiry | $3,000 to $100,000 | Details |
| Suncorp Bank | Suncorp Bank Secured Car Loan | 7 years | $5,000 to $80,000 | Details |
| Symple Loans | Symple Loans Personal Loan | 7 years | $5,000 to $80,000 | |
| Westpac | Westpac Car Loan | 7 years | $10,000 to $100,000 | Details |
Fill in our used car loan calculator to see how much your used car loan could cost you. You'll need to enter:
Then you can see see how much you'll end up paying.
| Years remaining | Principal remaining |
|---|
Once you've found a suitable used car loan, you can apply. Most lenders accept online applications. You will need:
There are plenty of benefits to buying a used car over brand new:
There are some downsides to buying used:
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I am looking to secure a $50,000 car loan. I have been told that you can pay off lump sums without penalties with some finance companies, but I am a little skeptical of this. Please clarify.
Regards.
Steve
Hi Steve,
Thank you for getting in touch with finder.
Repaying a car loan early without penalty is another common feature of variable rate car loans, however it is still best to check if you are able to make extra or lump sum repayments as well as if an early prepayment or early termination fee applies.
I hope this helps.
Please feel free to reach out to us if you have any other enquiries.
Thank you and have a wonderful day!
Cheers,
Jeni
I’m currently bankrupt and have gained casual employment and need a car am I able to apply for a loan somehow
Hi Jade,
Thanks for leaving a question on Finder.
You can get a loan if you are discharged bankrupt or even if you are currently bankrupt. You will be more limited in terms of the lenders you have to choose from, and the fees and rates will also be higher on bankrupt loans. You may also be required to attach an asset as security or apply with a guarantor. You may click the link above to find out about your loan options and see what you might be eligible for.
You may click the name of the lender to be redirected to our review page and learn more about the lender’s loan offer, rates, and requirements as well as the pros and cons of using their loan service. When you are ready, you may then click on the “Go to site” button if available and you will be redirected to the lender’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.
Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. You can also contact the provider if you have specific questions.
Cheers,
Joel
I am a PhD student and am struggling to find a car loan as most places aren’t accepting of the scholarship as a wage – is there any places I should try applying for?
Hi jj93,
Thanks for your inquiry.
When getting a car loan and you’re a student, it’ll be worth doing your homework on which lender would accept your form of income whether it be from casual work, permanent part-time work, or Centrelink payments. Not sure though for scholarship wages. Also when getting a student car loan, you may need to have a guarantor or co-borrower who can take on the legal and financial responsibility for the debt incurred with your car loan if you default or fail to make the repayments.
While we can’t recommend a specific lender to you and are not sure of your approval, you may like to check the guide on student car loans. On the page, is a comparison table you can use to see which lender suits you.
When you are ready, you may then click on the “Go to site” button and you will be redirected to the lender’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.
Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. You can also contact the provider if you have specific questions.
Cheers,
May
Hi Im looking at purchasing a 1986 Van for work, I have owned and operated a company since 2012.
What is my most affordable options
Hi Michael,
Thank you for reaching out to us.
If you are looking for a used Van, you may refer to the above list of lenders that offer used car loans. If you’ve chosen a brand and you think you are eligible, please click on the ‘Go to site’ button to be redirected to the lender’s official site and apply from there. Otherwise, some other car loans you may consider and compare are on these pages:
I would suggest that you review the features and details of the loan and the eligibility requirements and consider whether the loan is right for you. You can also contact the lender to discuss your options.
I hope this helps.
Please do not hesitate to reach out to us again if you have additional questions.
Cheers,
Ash
i want to borrow enough to paid off my existing car loan and buy two more cars one for me and one for my fiance . The two of us will be making the repayments
Hi there,
Thanks for your question.
If you are looking to borrow jointly to pay for your existing car loan and to have extra money, you may compare joint account personal loans and find the best one for you.
Cheers,
Anndy