07 August 2026 
6 min read 
Why preparation matters
A car loan is one of the most common forms of consumer credit in Australia — and one of the easiest to get wrong. Dealership finance can be convenient, but it rarely represents the best available rate for your circumstances.
What lenders assess
- Your employment type and income stability (PAYG, self-employed or contracting).
- The age and type of vehicle — lenders often restrict terms on older cars.
- Your existing debts and credit history.
- The loan-to-value ratio — some lenders cap at 100% of vehicle value.
New vs used vehicle finance
New vehicles typically attract lower interest rates and longer maximum loan terms. Used cars can still be financed, but terms shorten as the vehicle ages — a 2015 model may only qualify for a five-year term regardless of the loan amount.
Pre-approval before you visit a dealership gives you real negotiating power. You walk in knowing your rate, your limit and your budget — and dealers know it too.
Total cost vs monthly repayment
Stretching a loan from five to seven years might reduce your monthly repayment by $80 — but add $2,400 or more in total interest. Always compare the comparison rate and the total repayable figure alongside the advertised rate.
