Buying your first car can be a fun experience, but it can be difficult deciding the best way to finance it. Read our guide on car loans and how they can help you get into your first car.
There’s a lot to think about when buying your first car— the colour, the model, the accessories — but one thing many people fail to properly plan for is how they will finance it. There are a lot of costs that can add up beyond the sticker price, from stamp duty to insurance, so if you are looking at getting a loan it’s important to research your financing options and find a loan that will work for you.
NRMA Car Loan Offer
If you are in the market for a new or used car, caravan or motorcycle the an NRMA loan might be for you
Interest Rate From: 7.45% p.a.
Comparison Rate: 7.88% p.a.
Interest Rate Type: Fixed
Application Fee: $301.44
Minimum Loan Term: 1 year
Maximum Loan Term: 7 year
Minimum Loan Amount: $5,000
Maximum Loan Amount: $80,000
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Read the NRMA Car Loans terms and conditions.
Comparison of first car loans
Interest Rate (p.a.)
Comparison Rate (p.a.)
Min Loan Amount
Loan Term
Application Fee
NRMA Car Loan
A fixed rate car loan with flexible payment options and no ongoing fees.
From 7.45% (fixed)
7.88% Info
$5,000
1 to 7 years
$301.44
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RACV Car Loans
Enjoy this fixed rate new car loan offer from RACV. No ongoing fees.
From 7.45% (fixed)
7.88% Info
$5,000
1 to 7 years
$294
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Gateway CU Car Loan - New Car
Apply for the Gateway Credit Union Car Loan and enjoy the competitive rates and fees with the flexible repayment options.
From 7.69% (variable)
7.90% Info
$3,000
1 to 7 years
$149
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Bankwest Car Loan
Bankwest Car loan offers a low fixed interest rate.
From 8.49% (fixed)
9.24% Info
$10,000
3 to 7 years
$285
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NAB Car Loan
Apply for NAB Car loan and enjoy a low interest rate.
From 11.99% (variable)
12.87% Info
$5,000
1 to 7 years
$150
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Westpac Car Loan
Apply for the Westpac Car Loan and enjoy a very competitive rates.
From 9.99% (fixed)
11.03% Info
$10,000
1 to 7 years
$250
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Aussie Car Loan
A Car loan offer from Aussie with a low establishment fee.
From 12.99% (fixed)
13.94% Info
$3,000
1 to 7 years
$199
ApplyMore
ANZ Online Secured Car Loan
A secured car loan with a fixed rate interest.
From 8.59% (fixed)
9.44% Info
$7,500
1 to 7 years
$350
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Types of first car loans
There are a few different types of first car loans that can suit most borrowing needs. Depending on what kind of car you’re buying and your own personal financial situation, you may want to consider one of the following loans:
Secured loan. A secured loan allows you to finance a vehicle by using that vehicle as security in case you default on the loan. These loans are less of a risk to the lender and usually have lower rates and fees, but this comes at the cost of you risking your newly purchased car. These loans do have some restrictions, which may include you having to use the whole loan amount only to finance the vehicle, and the loan amount being determined by the value of the car. Generally, these loans can only be used to finance new cars or cars that are valued above a certain amount.
Unsecured loan. An unsecured loan is a form of finance which does not require you to use your car, or any other asset, as security. These loans usually come with higher interest rates and fees because of the increased risk the lender takes on. You are able to use the loan amount however you want, which includes using it to make purchases which may not be to do with the car.
Fixed rate car loan. A fixed rate loan usually lasts between one and five years and has one rate which is fixed for the life of the loan. These loans allow you to budget your repayments and give you peace of mind knowing the rate won’t change. The risk with these loans is that you may lock in a rate that may not be as competitive in a year or two, and therefore may end up costing you more money.
Variable rate car loan. A variable rate loan comes with an interest rate that may change over the life of the loan. These loans are generally allowed for longer periods of time, usually up to seven years. The difficulty with these loans is that you don’t know how much you will be paying in repayments because the rate can change. However, some lenders allow you to nominate a fixed rate period where you can enjoy the security of a set rate for a certain amount of time.
More information
Secured Car Loans
Unsecured Car Loans
Variable Rate Car Loans
Fixed Rate Car Loans
How to compare
When looking at financing options for your first car, it’s important to know how to compare loans to make sure you choose the right one for you. When comparing, keep the following points in mind:
Fees.
There are a few different fees you may be charged for a car loan and it’s important to be aware of them all. You may be charged upfront fees to cover the cost of setting up the loan, such as application fees. Ongoing fees may include monthly account-keeping fees, annual fees or fees to cover the cost of extra repayments, lump payments etc. You may also be charged extra fees for closing your loan early.
Rates.
The rates the loan offers are also an important consideration as they can contribute significantly to the cost of the loan. The rate may be offered as variable or fixed, and some lenders may also offer a low introductory rate that can help save you money in the initial stages of the loan.
Flexibility. Some loans are more flexible than others, so it’s important to see how flexible your loan can be. Look for things such as whether you will be able to make additional repayments or whether you can take advantage of any discounts for bundling additional financial products with the lender.
Loan term and amount. These are aspects that are sometimes overlooked, but they are important considerations when choosing a loan to meet your borrowing needs. For instance, if the car you are looking to buy costs $5,000 but the minimum loan amount for the loan you want to get is $7,000, then you may want to consider other options.
Things to consider
Before you apply for a loan for your first car, do your research and compare all of your loan options. This loan may be with you for a few years, and you’ll be glad that you spent some time finding the best deal down the track. You should not only look at the interest rate on offer but also the fees and charges you may incur over the life of the loan. Calculate your repayments and make sure they will be manageable on your budget.
How to apply
Compare your options using the comparison table above. Once you have found a loan you are happy with, click the ‘Apply Now’ button to be securely transferred to the lender’s website. You will generally need to be over the age of 18 and be a permanent Australian resident. You will also need to provide the following details:
Personal details including name and proof of ID
Financial details including income, credits, debts and liabilities
Information about the car including make, model and value for a secured car loan
Buying your first car? Make sure you compare your options
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