A pre-owned vehicle can make a good choice if you need a first or next car. You can get a good deal because you're not buying it brand new and there are can be more room to negotiate if it's a private sale. If you don't have the full amount ready to make your purchase, you have a range of financing options available to consider.
A used car loan works the same way as a new car loan. These loans use the vehicle you're purchasing as security and in return, you get a competitive interest rate. Read our used car loans guide below and find out all the options available to you.
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Beyond Bank Low Rate Car Loan "Special Offer"
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IMB Secured Personal Loan: 7.04% p.a. comparison rate. A car loan with a competitive rate that allows you to finance a used vehicle up to 5 years old.
RACV Personal Loan: 7.45% p.a. comparison rate. A personal loan that allows you to finance a used vehicle up to 7 years old.
NRMA Used Car Loan: 6.95% p.a. comparison rate. A used car loan with no monthly fees.
Bank Australia Car Loan: 6.66% p.a. comparison rate. A car loan suitable for used vehicles that also offsets your carbon emissions.
How does a used car loan work?
A used car loan works the same way as a new car loan. These loans use the vehicle you're purchasing as security and in return, you get a competitive interest rate. You can either apply for your loan first and get pre-approval so you know how much money you have to spend on a vehicle, or you can find the vehicle you want to purchase and then apply for your loan. Either way, the lender will need all the vehicle's details before you can be fully approved.
You can usually apply for a loan of between $2,000 and $70,000 and you will have between one and seven years to repay. Lenders will have restrictions on the type of car you can finance, for example, you may not be able to finance a vehicle which will be over 12 years old at the end of the loan term.
Repayment flexibility differs between lenders but you are normally able to select weekly, fortnightly or monthly repayments. You may be able to pay off your car loan early without penalty or make additional payments without additional fees.
If you are approved for the loan the lender may prefer to pay the car seller directly or may send the funds to you to pay the seller. Discuss this with your lender before you apply.
Watch: Should you get a loan for a used car?
How old a car can I finance with a used car loan?
If you want to use your used car as security for the loan, each brand has different criteria. Here are the age limits for some of the lenders you can compare in the table above:
There are usually two types of used car loans, a secured loan and an unsecured used car loan.
Secured car loan. These loans offer the most competitive rates as you are required to offer your car as security for the loan. Check that your used car will be eligible to be used as security and remember that it's likely you'll only be able to borrow as much as the value of the vehicle.
Unsecured car loan. If your vehicle doesn't qualify as security for a lender or you want to borrow additional funds for something else, you might want to consider an unsecured car loan is a loan. These loans come with slightly higher rates but also more flexibility in how you use the loan.
Dealership finance. When you're shopping for a car you will see a lot of dealership financed deals advertised and they are another option to consider. This financing works by you paying low interest and repayments for the majority of your term and then a balloon payment, usually a few thousand dollars, at the end of the term. Make sure you find out all the details of the finance before you apply.
How do I compare used car loans?
Securing the right finance is as important as finding the right car. Some car loan terms extend up to seven years, so it can be with you a long time. Here's what to look at to find the right finance:
Interest rate. The interest rate should be the first thing you should consider when you are comparing used car loans. Compare loans with similar features to ensure you get a competitive rate and make sure you look at the comparison rate as well as it includes fees as well as interest.
Fees. Lenders can charge a range of fees on used car loans. These can include upfront fees such as application fees, ongoing fees such as monthly and annual fees and penalties such as early repayment fees.
Flexibility. Find out how flexible your loan can be. Can you make additional and lump-sum payments during your loan term? Are you able to repay your loan early without penalty? If you do make additional repayments, can you get these back using a redraw facility, and are there any restrictions regarding this facility?
Common questions we're asked about financing a used car
Should I buy a car that's under finance?
Buying a car from a private seller that is currently under finance carries more risk. You need to make sure that you have proof the seller has paid off the remaining balance of the loan before you finalise the sale. Find out what else you need to know about buying an encumbered car in our guide.
How do I receive my loan funds?
Lenders differ on how they send you your approved loan funds. Some lenders may prefer to send the funds directly to the car seller while others may transfer the loan funds to your nominated bank account. Check how this will be handled before you apply.
If you aren't confident with cars then it's best to get the vehicle inspected by a mechanic. If you have a good understanding of cars then you can do the inspection yourself. Check out our used car inspection checklist to make sure you don't miss anything.
Is it better to buy a used car from a dealership or through a private seller?
There are benefits and drawbacks to both. A used car dealer will check the quality of vehicles before selling them so you know you there are unlikely to be massive faults or damages with the vehicle. However, you may find there is less room to negotiate and you may not get as good a deal. With a private seller, there is no quality control and if you don't have the vehicle thoroughly checked you could purchase a faulty vehicle, but there is more chance of a bargain.
*The products compared on this page are chosen from a range of offers available to us and are not representative of all the products available in the market. There is no perfect order or perfect ranking system for the products we list on our Site, so we provide you with the functionality to self-select, re-order and compare products. The initial display order is influenced by a range of factors including conversion rates, product costs and commercial arrangements, so please don't interpret the listing order as an endorsement or recommendation from us. We're happy to provide you with the tools you need to make better decisions, but we'd like you to make your own decisions and compare and assess products based on your own preferences, circumstances and needs.
Matt Corke is the head of publishing in Australia for Finder. He previously worked as the publisher for credit cards, home loans, personal loans and credit scores. Matt built his first website in 1999 and has been building computers since he was in his early teens. In that time he has survived the dot-com crash and countless Google algorithm updates.
You'll receive a fixed rate of 6.99% p.a. Apply for a loan from $5,000 to finance a new or used car. Flexible repayments and options to finance a classic car.
You'll receive a fixed rate of 5.69% 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. Note: Product only available to residents of Victoria.
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.
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.
You can get a loan if you are a 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. Find out about your loan options HERE and see what you might be eligible for.
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?
When getting a car loan and you’re a student, it be work doing your home work 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 this page.
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.
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
On this page, you would find our guide on getting a personal loan if you are on a visa. Please review the criteria, details of the loan product and contact the lender directly to discuss your loan options and eligibility.
Any recommendations for a car load for some on centrelink benefits? Credit rating is good and there are no defaults or similar. Never been bankrupt or anything like that
Kindly note that we are a financial comparison and information website and we are unable to recommend specific products or services to our users.
In the page above, you can take advantage of the loan calculator to see which loan product can give you low monthly repayments. Before clicking the ‘go to site’ button to submit an application, be sure to read the eligibility criteria and requirements needed by clicking the name of the loan on the table.
Currently I have on going loan with Macquarie finance and interest rate is around 12% p.a with 3 years remaining. Balance amount is $26k.
My monthly payment is $780.
I want to change for lower interest so I’m planning to refinance. To do that I was asked to pay a cancellation fee.
Would you know what is the average penalty fee in the market for comparison?
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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 a 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. Find out about your loan options HERE and see what you might be eligible for.
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 be work doing your home work 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 this page.
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:
– “Best Car Loans”
– New Car Loans
– Car Loans
– Low-Interest Car Loans
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 here.
Cheers,
Anndy
Hi,
i would like to buy a used car and my budget is two lakhs.
so please advise me about the loan and how much i can get and what will be the interest.
Anticipating your replay,
HI Pious,
Thanks for your question.
Unfortunately, the loan products we have listed on our page are only available to Australian residents.
You may have to directly contact a local lender for your borrowing needs.
Cheers,
Anndy
Can a 457 visa holder who just arrived in Australia get a second hand car financing? If yes, what should be the requirements?
Hi Patricia,
Thank you for your inquiry.
On this page, you would find our guide on getting a personal loan if you are on a visa. Please review the criteria, details of the loan product and contact the lender directly to discuss your loan options and eligibility.
Cheers,
May
Any recommendations for a car load for some on centrelink benefits? Credit rating is good and there are no defaults or similar. Never been bankrupt or anything like that
Hi Dragan,
Thanks for your question.
Kindly note that we are a financial comparison and information website and we are unable to recommend specific products or services to our users.
In the page above, you can take advantage of the loan calculator to see which loan product can give you low monthly repayments. Before clicking the ‘go to site’ button to submit an application, be sure to read the eligibility criteria and requirements needed by clicking the name of the loan on the table.
Cheers,
Anndy
Hi my name is Teresa I’m trying to get another car or ford wheels I’m on a pension I have now $700 put away for a car can anyone help me
Hi Teresa,
You can find a full list of loans available to those on the pension on this page.
I hope this will help,
Elizabeth
Hi
Currently I have on going loan with Macquarie finance and interest rate is around 12% p.a with 3 years remaining. Balance amount is $26k.
My monthly payment is $780.
I want to change for lower interest so I’m planning to refinance. To do that I was asked to pay a cancellation fee.
Would you know what is the average penalty fee in the market for comparison?
Hi Rodrigo,
You can check a list of early repayment fees for lenders on this page.
Hope this helps,
Elizabeth