Car Loan & Asset Finance

A car loan or car finance is a type of personal loan which is taken out for the sole purpose of buying a new or used car or motorbike. Car loans may be secured or unsecured. 

A secured car loan is when the financier lends money for the purchase of a vehicle and takes security over the vehicle. If the borrower fails to repay the money to the lender within the agreed period, the lender can reclaim the vehicle to cover the costs, if the vehicle does not cover the full amount owing, the borrower will have to pay the difference. 

At the end of the term the car finance lender will lift the title over the vehicle, allowing the title to be transferred.
The benefit of taking out a secured loan is that the interest rates on secured car loans are usually fixed and lower which means the repayments remain the same throughout the term of the loan.  

An unsecured car loan is where the lender does not use any assets as security. As an unsecure loan carries more risk to the lender, the interest rates are normally higher on an unsecured car loan. Unsecured loans are not generally used to purchase a car, however in certain cases they can be used, for example if the car is too old or if you want to borrow more than the purchase price of the vehicle. 

If you are looking for a car loan for a used car, just be aware that some lenders will not offer secured loans for cars more than 15 to 25 years old. If you are looking for car finance for a vehicle aged over 15 years you really need to speak to an expert with a large panel of lenders or you may find that you will end up with an unsecured loan paying higher interest rates.
The benefit of purchasing a new car is that interest rates tend to be lower for new cars.

Car finance terms will differ from lender to lender; however, most lenders terms are between 5 to 7 years.
Just remember the longer the term of your car loan, the lower the car loan repayments will be, but you will end up paying more interest. 

When comparing car loans, you should always endeavor to find a loan agreement that is affordable for you whilst minimising the interest payable.

Yes, you can apply for a pre-approved car loan. By applying for pre-approved car finance, you can find the car of your dreams knowing exactly what you can afford.

Yes, however when buying from a private seller car finance is a little different. If you need a car loan to buy from a private seller the lender will require the vehicle to have a roadworthy inspection . 

If you're a sole trader or business owner wanting car finance to purchase a business car, there is a range of vehicle finance options available. 

Unlike a personal car loan, a business car loan will often come with tax benefits and flexible lease options.

Find out what type of business vehicle finance is right for you and compare your options for a business car loan below.

A Chattel Mortgage is a commercial car finance product which is available to ABN registered businesses or sole traders. Individuals that receive a car allowance from their employer can also access this product. Under a Chattel Mortgage, the customer takes ownership of the vehicle at the time of purchase. This is the most commonly used car loan for businesses.

Commercial Hire Purchase is where the lender purchases the vehicle on the client’s behalf, the client then hires the vehicle from the lender for a fixed monthly repayment over a set period of time. 

The client can use the vehicle but is not the owner. The client will take ownership of the vehicle at the end of the car loan term and once all car finance payments have been made.

A finance lease is where the client has use of the vehicle and the benefits of ownership, while the lender retains ownership of the vehicle. The client can take ownership, trade or refinance the vehicle at the end of the term.

A novated lease is a 3-way agreement between yourself being (the employee), your employer and the car finance  lender. A novated lease allows a business to lease a motor vehicle on behalf of an employee. The responsibility of the lease and ownership of the vehicle is with the employee. Lease payments are made from the employee's pre-tax income.