Best Car Loan Rates in Australia (2026)

Best Car Loan Rates in Australia – March 2026

Finding a competitive car loan can save you thousands over the life of your loan. Whether you are buying new or used, the rate you are offered depends on several factors – including the vehicle type, its age, your credit score, and whether the loan is secured against the car.

We track 31 car loan products from 22 lenders across Australia so you can compare rates in one place. Below, we break down the best car loan rates available right now, highlight top picks for new and used vehicles, and explain what really drives the rate you will pay.

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Best Car Loan Rates Right Now

Car loan rates currently start from 5.49% p.a., though advertised rates are typically shown as ranges – for example, 5.49% - 12.24% p.a.. The rate you receive depends on your credit history, income, the vehicle's age and value, and the loan amount.

How to read these rates: The ranges below show the lowest to highest advertised rate for each product. Your actual rate will fall somewhere within (or sometimes outside) this range based on your individual circumstances.

Comparison rates give you a more accurate picture of total cost by including most fees. For a deeper explanation, see our guide on how comparison rates work.

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Best New Car Loans

New cars generally attract the lowest car loan rates because they hold their value better and present less risk to the lender. If you are purchasing a brand-new vehicle, you can expect rates in the range of 5.49% - 12.24% p.a..

Why new car rates are lower

• Higher resale value – new cars depreciate predictably, giving lenders stronger security.
• Lower mechanical risk – less chance of costly repairs that could affect your ability to repay.
• Manufacturer warranty – the vehicle is covered for several years, reducing risk for both you and the lender.

If you are deciding between a car loan and a more flexible option, our car loan vs personal loan comparison explains the trade-offs.

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Best Used Car Loans

Used car loans are popular with buyers looking for better value, but rates tend to be slightly higher than for new vehicles. Expect advertised rates in the range of 5.49% - 12.24% p.a..

Vehicle age limits

Most lenders set a maximum vehicle age at the end of the loan term – commonly 10 to 15 years old. For example, if a lender requires the car to be no older than 12 years at the end of a 5-year loan, you could only finance a car that is currently 7 years old or newer.

Older vehicles may attract higher rates, or may not be eligible at all. Always check the lender's age policy before applying.

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How Car Loan Rates Work

Understanding how rates are calculated helps you compare loans more effectively.

Advertised rate vs actual rate

The advertised rate is the headline figure lenders use in marketing. However, the rate you actually receive may differ based on a credit assessment of your profile. Many lenders use risk-based pricing, meaning borrowers with stronger credit histories receive lower rates.

Comparison rate

The comparison rate factors in most fees and charges to give a truer picture of a loan's total cost. It is calculated on a benchmark loan of $30,000 over 5 years. Keep in mind that comparison rates may not capture every fee – see our comparison rate guide for details.

Fixed vs variable rates

Most car loans in Australia are fixed rate, which means your repayments stay the same for the life of the loan.

Secured vs unsecured

A secured car loan uses the vehicle as collateral, which typically results in a lower interest rate. An unsecured car loan does not require the car as security, but rates are usually higher to compensate for the lender's increased risk.

Currently, the best secured car loan rates start from {{cl:best_secured}}, while unsecured rates start from {{cl:best_unsecured}}.

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What Affects Your Car Loan Rate

Several factors determine the rate a lender will offer you:

Your credit score is one of the most significant factors. Even a small improvement can shift you into a lower rate band.

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Fees to Watch

Beyond the interest rate, fees can add to the total cost of your car loan. Here are the common ones:

Some lenders advertise "no-fee" car loans, but these may compensate with a slightly higher interest rate. Always compare the total cost using the comparison rate rather than focusing on fees alone.

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Car Loan vs Personal Loan

If you are financing a vehicle, you may also consider a personal loan. Here is how they compare:

A secured car loan is usually the cheaper option if you are solely purchasing a vehicle. A personal loan may suit if you need flexibility – for example, buying from a private seller and also covering registration and insurance costs.

For a full breakdown, read our car loan vs personal loan guide.

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Dealer Finance vs Direct Lender

When buying from a dealership, you will often be offered finance on the spot. Here is how dealer finance compares to going directly to a lender.

Dealer finance

• Convenient – arranged at the point of sale, often with same-day approval.
• Bundled – may include add-ons like extended warranties or insurance.
• Potentially higher cost – dealers may earn a commission on the finance, which can mean a higher rate.
• Less transparency – harder to compare against the broader market when you are in the showroom.

Direct lender (bank, credit union, or online lender)

• More competitive rates – you can shop around and compare multiple offers.
• Pre-approval – lets you negotiate at the dealership as a cash buyer, which can give you more bargaining power on the purchase price.
• Greater transparency – easier to compare rates, fees, and features before committing.
• Takes more effort – you need to research and apply before visiting the dealer.

Tip: Getting pre-approved with a direct lender before visiting a dealership puts you in a stronger negotiating position. You can still consider dealer finance if they beat your pre-approved rate.

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How to Apply for a Car Loan

1. Check your eligibility

Most lenders require you to:

• Be at least 18 years old
• Be an Australian citizen or permanent resident
• Have a regular income (employed, self-employed, or receiving eligible benefits)
• Meet minimum credit score requirements

Review your credit score before applying – you can check it for free through several services.

2. Gather your documents

Typical documents include:

• Proof of identity – driver's licence, passport
• Proof of income – recent payslips, tax returns (if self-employed), or Centrelink statements
• Bank statements – usually the last 90 days
• Vehicle details – make, model, year, purchase price, and seller details
• Proof of address – utility bill or bank statement

3. Get pre-approved

Pre-approval gives you a conditional offer before you find a car. It helps you:

• Know your budget
• Negotiate with confidence
• Speed up settlement once you find the right vehicle

Pre-approval is typically valid for 30 to 90 days.

4. Find your car and finalise

Once you have found a vehicle, provide the final details to your lender. Settlement usually takes 1 to 5 business days, after which the funds are transferred to the seller.

For secured loans, the lender will register a security interest on the Personal Property Securities Register (PPSR) until the loan is fully repaid.

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Compare Car Loans on RatePilot

Ready to find the right car loan? Compare car loans from 22 lenders and filter by rate, fees, and loan features to find the best deal for your situation.

The current RBA cash rate sits at 3.85%, which influences the rates lenders offer on car finance. Keeping an eye on the RBA cash rate can help you time your application.