Don’t get taken for a ride on your car loan

Choosing the right car loan can be tricky to navigate. From interest rates and fees to selecting the perfect loan term, there's a lot to think about.  

So no matter if you opt to borrow from a traditional bank or an online lender, there are a bunch of dos and don'ts when it comes to getting a car loan that you should know about, to avoid being taken for a ride. 

Read on to find out Mozo’s expert car loan tips and compare top car loan deals on offer right now… 

Car loan dos: 

Compare car loan interest rates: Interest rates vary hugely from lender to lender, so be sure to compare rates from a range of lenders to avoid getting stung. Some lenders offer tiered rates that reward customers for having a good credit rating. 

Look beyond the big banks: Right now, the lowest car loan rates in the Mozo database stars with a '3', but the big banks aren't advertising rates below 6%. Take the time to weigh up all your options to ensure the product you choose is suitable for you. 

Give yourself flexibility: It’s always a good idea to choose a loan that allows you to make free extra repayments whenever you can, should you have some extra cash. Some loans charge penalties for early repayment. 

Car loan don’ts: 

Beware of introductory car loan rates: Some car loans advertise a low intro rate, but keep in mind that once the intro period is over your interest rate will increase, and so will your interest repayments. 

Watch out for multiple fees: An application fee, a monthly charge and an early repayment penalty may seem like small costs separately, but could end up costing you thousands. For example, a $10 monthly fee adds up to $600 over a 5-year loan.

Remember, the longer the loan the more interest you pay: If it's feasible for you, opt for a shorter loan term. While your regular repayments may be higher it’ll save you in the long run as it means you’ll fork out less in interest.

LOW RATE CAR LOANS JUNE 2021

Wisr - Secured Car Loan
  • Fixed rates from just 4.74% (4.75% comparison rate*) for good credit borrowers
  • No monthly account fees and no early repayment fees
The details:

Wisr’s competitive fixed loan rates for borrowers with good credit give you the freedom to borrow between $5,000 and $50,000 and get on the road faster than ever. There are no monthly account fees and no early repayment fees to worry about. Apply online and get approval within 24-48 hours.

Plenti - Car Loan
  • Fixed rates from just 4.89% (5.44% comparison rate*)
  • Receive funds 24 hours from approval
The details:

Online lender Plenty offers competitively low rate car loans from 4.89% (comparison rate 5.44% p.a.) for new, demo and used vehicles. You can borrow between $10,000 and $100,000 and take advantage of flexible 3, 5 or 7 year loan terms. And while there is a $399 upfront fee, there are no ongoing, early repayment or exit fees. To qualify, you'll need to be 21 years or over and earn above $35,000.

OurMoneyMarket - Car Loan
  • Car loan rates from 5.35% fixed (5.65% comparison rate*)
  • Quick and easy 100% online application
The details:

OurMoneyMarket is Australia's go-to online personal loan provider, offering competitive interest rates for secured car loans of up to $75,000. Customers benefit from fast, simple online loans with low interest rates and no hidden fees. There are no monthly account keeping fees, no exit fees and no early repayment fees, just an upfront fee of $250. Loans can be repaid weekly, fortnightly or monthly, over 1 to 7 years.

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Mozo compares car loans from more than 70 lenders to help you find the right car loan for your needs, whether you're buying a used or new car. Compare more car loan options now.

* WARNING: The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

^See information about the Mozo Experts Choice Personal Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.