Mozo guides

Car Loan Tips and Tricks

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Whether you’re about to apply for a car loan or still just thinking about it, it’s a good thing you’re here.

Before even choosing your lender, it's wise to familarise yourself with these tricks and tips. Because at the end of the day, being even a little clued up can save you thousands over the life of the loan.

Keen to start comparing already? Look below.

Car Loan Comparison Table - last updated 29 March 2024

Search promoted car loans below or do a full Mozo database search. Advertiser disclosure
  • Used Car Loan

    Fixed, Secured, No vehicle age limit

    Interest rate
    comparison rate
    Monthly repayment
    6.57% p.a.to 18.99% p.a.
    7.19% p.a.to 21.78% p.a.based on $30,000
    over 5 years

    Get a competitive fixed interest rate on a secured used car loan of up to $75,000 depending on your credit score. No vehicle age limits. Easy online application. Fast pre-approval. Pre-approved funds held for up to 3 months. No monthly account keeping fees, no exit fees and no early repayment fees. Flexible weekly, fortnightly or monthly repayments on terms from 1 to 7 years.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 6.57% would cost $35,528.12 including fees.

    Compare
    Details
  • New Car Loan - Special

    Home Owner Discount, Including Demo, Variable, Secured

    Interest rate
    comparison rate
    Monthly repayment
    6.24% p.a.
    7.36% p.a.based on $30,000
    over 5 years

    Low variable car loan rate for purchasing new and demo vehicles from dealers. Personalised loan amounts between $5,000 and $150,000. Flexible repayment options. Choose between the 3 to 7 year loan terms. Good credit history. Stable employment history and Australian citizenship or PR required.

    Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 6.24% would cost $35,880.27 including fees.

    Compare
    Details
  • New Car Loan

    Fixed, Secured

    Interest rate
    comparison rate
    Monthly repayment
    6.57% p.a.to 18.99% p.a.
    7.19% p.a.to 21.78% p.a.based on $30,000
    over 5 years

    Get a competitive fixed interest rate on a secured new car loan of up to $75,000 depending on your credit score. Easy online application. Fast pre-approval. Pre-approved funds held for up to 3 months. No monthly account keeping fees, no exit fees and no early repayment fees. Flexible weekly, fortnightly or monthly repayments on terms from 1 to 7 years.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 6.57% would cost $35,528.12 including fees.

    Compare
    Details
  • Used Car Loan

    Up to 5 years old, Variable, Secured

    Interest rate
    comparison rate
    Monthly repayment
    7.74% p.a.
    8.85% p.a.based on $30,000
    over 5 years

    Used Car Loan with no monthly or ongoing fees, with a fixed rate for the life of the loan. Fast online application. Good credit history. Stable employment history and Australian citizenship or PR required.

    Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 7.74% would cost $37,153.94 including fees.

    Compare
    Details
  • New Car Loan - Special

    Home Owner Discount, Including Demo, Fixed, Secured

    Interest rate
    comparison rate
    Monthly repayment
    7.09% p.a.
    8.21% p.a.based on $30,000
    over 5 years

    Eligible for homeowners only. Low fixed car loan rate for purchasing new and demo vehicles from dealers. Early payout options available. Winner of Mozo's Experts Choice Car Loan 2021 award^. Good credit history. Stable employment history and Australian citizenship or PR required.

    Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 7.09% would cost $36,598.64 including fees.

    Compare
    Details

Mozo's 6 tips and tricks to finding the right car loan 

1. Walk into the dealer finance-ready

Dealer finance may seem like a good idea at the time, especially being a one-stop-shop for all your car needs! But when you do the sums and comparisons lenders outside of the car dealership is often the savvier option.

The truth is, it can be tempting when dealer finance offers a low interest rate. But there's a catch. With dealer finance there is little room for negotiation on the actual vehicle, so you need to consider your options closely.

Sorting out your car loan before you walk into a dealership will make all the difference to your negotiating power. They’ll see you as a serious contender if you’re not depending on dealer finance to convert the enquiry to a sale.

This also applies when looking for a second-hand car, in regards to setting up your used car loan.

2. Think twice about special deals

It’s so appealing when a dealership offers you free service for 5 years or up to 80,000km, isn’t it? Especially if you’ve got a fancy-ish car that requires dealership service to keep the warranty viable - it can cost anywhere between $450 - $900 each service. You could be saving up to $5000 in the first five years of your car's life, right?

Not exactly. With these kind of ‘special offers’, just as in the dealer finance scenario, you may not shave all that much off the price of the car, if at all. Wouldn’t you rather negotiate $5000 off the sale price and take your car to get serviced at an independent mechanic for $200?

Also, don't fall into the ‘for a limited time only’ trap. Heard that one before?

You want to make a decision about buying an expensive item at the right pace. Maybe rethink the special offer so you can stay level headed and negotiate the car you want at the price you can afford. It's better to make a balanced decision than a rushed one!

3. Fix that car loan rate

Yes, some people prefer the excitement that a variable rate has to offer. In an ideal world where the rates stay low and only get lower, we'd all want to jump on board!

But what if the RBA cash rate falls and your lender doesn’t pass on the benefits? Feels like you’re being ripped off, right? What if the cash rate goes up and your lender suddenly decides to bump up your rate, and then bumps it again? There's nothing worse.

That's the reason a lot of people tend to steer towards a fixed rate. Not only will you (hopefully) secure a reasonable rate, but you will have the same predictable repayment every month. It does tend to make fixed rates a little higher at the outset, but sometimes that security is well worth it.

It also means you can budget for your other monthly expenses around your car repayment. If you always know what your expenses are, you technically shouldn’t ever be out of pocket unless your income decreases or your other expenses increase (hello cost of living!). Even more reason to avoid the gamble of a variable rate and opt for a safer, more predictable one.

4. Leave room for bonus repayments

When you find yourself with extra money, it can feel all too exciting. That cash bonus you received at work, in lotto, as a gift or from your tax return? It should probably go towards your debt. 

Whether it's on your credit card, mortgage, or car loan repayment, try and put as much as you can towards what you owe the bank. Why? Because you can pay off your debt quicker, which also means you'll pay less interest in the long run.

If you want the freedom and flexibility to repay more when you can, then you need to sign up to the right lender and product that offers free extra repayments. This is part of the open conversation you need to have with your lender before signing your name to that car loan. 

It might mean a higher rate, but it might also be worth it - that's all down to what works best for you.

5. Focus on car loan flexibility

Ever heard of a lender that offers car loans that give you the flexibility of using some of it for other things like a small renovation at home or pay for your next holiday? These loans are likely called personal loans

If you want to borrow more than the value of your car so that you can have the freedom to do so much more, than a personal loan is the one you should be enquiring about.

What’s the catch? You’ll likely pay more in interest with a personal than if you were to secure a car loan. Although, in some cases you can use the value of the car as security.

6. Watch out for hidden fees

It’s one thing to be charged an application fee, but an ongoing monthly service fee or early repayment penalty? You want to keep your eyes peeled for these when you read through those terms and conditions, because getting stuck with an unexpected fee is a real pain.

One of the best things you can do when shopping for a car loan is opt for a lender who has a low amount of fees. It's also important to calculate whether the amount of fees you pay is offset by a low interest rate, or vice versa. 

Need a little nudge or help exploring your car loan options? We’re here to help! Visit Mozo’s car loan comparison table for the best wheel forward. We've also pulled aside some of Mozo's best car loans.

Sara Borman
Sara Borman
Money writer

Using her Bachelor of Communications in Writing, Sara has spent her professional career creating content and crafting copy. Her writing has been published in academic journals and literary anthologies in the US and Australia. She’s determined to make the world of finance accessible and loves finding a way to make money interesting to the everyday person.

* 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

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