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What is a car loan and how does it work?

car loan (also referred to as a secured car loan) involves a finance company lending you the money to purchase a vehicle for personal use. The loan is secured against the vehicle and, when the final repayment has been made, you will own the vehicle outright.

What are the benefits of a car loan?

Benefits include:

  • Flexible loan repayment periods, ranging from two to 10 years
  • The option to reduce monthly repayments by setting a final balance (Residual Value) payment
  • Choice of a fixed or variable interest rate
  • The option to put down either a lump sum or your current vehicle as a deposit to reduce the amount borrowed
  • The potential to claim tax deductions if the car is being used for business purposes
  • Lower interest rates, thanks to the loan being secured against the vehicle
  • Quotes and approvals available online

What tax and GST can I expect to pay on a car loan?

A car loan is classed as a personal finance product, however, it may still be possible to claim a tax deduction on your payments, depending on how frequently you use your vehicle for business purposes. For more information about claiming vehicle-related tax deductions, please visit the ATO website.

Who should choose a car loan?

A car loan is a good option for someone who uses their vehicle mainly for personal purposes, but who does not have the option of salary packaging a car through a novated lease.

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Meet our network partners

As part of the carsales network, we have an exclusive panel of specialist lenders and industry partners that will protect and treat you right every step of the way.

Pepper Money

Macquarie

RateSetter

AMMF

Liberty

Westpac

ANZ

Alphera

Latitude

Redbook

Thorn Group

Bank of Queensland

Carsales

Metro

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