Compare car loans on what you'll repay, not the headline rate.
A plain guide to what changes the real cost of a car loan, and what to ask a lender before you sign.
Australian Credit Licence 509582. Fees and lender criteria apply.
How do you compare car loans in Australia?
Look at the comparison rate first, not the interest rate on its own. Then check the fees, the loan term, any balloon payment and what it costs to pay the loan out early. Put two quotes side by side on the same amount and term, and compare the total you'd repay.
- A comparison rate combines the interest rate and most standard fees into one figure, for one example loan
- Lenders that advertise an interest rate have to show a comparison rate next to it
- A longer term lowers each repayment but usually means more interest overall
- A balloon cuts your repayments now and leaves a lump sum due at the end
- Monthly account fees and early payout costs can change which loan costs less
- Rates are set by the lender and depend on your circumstances
Reviewed by Simple Loans Editorial Team · Last reviewed
The Simple Loans Editorial Team researches and reviews every car finance guide published on simpleloans.au. Simple Loans holds Australian Credit Licence 509582 and is a member of AFCA.
Why choose Simple Loans.
Comparison rate
It includes most standard fees, but only for the example amount and term shown beside it.
Fees
Establishment fees, monthly account fees and dealer origination fees add up over a five year loan.
Loan term
One to seven years is common. Stretching the term costs more interest in total.
Balloon payment
Smaller repayments now, a lump sum later. Check you could pay it or refinance it.
Early payout
Some loans charge break costs if you pay early or sell the car. Ask before you sign.
Security
A secured loan uses the car as security. Lenders often price secured and unsecured loans differently.
Same interest rate, different cost
Two loans can carry the same interest rate and still cost different amounts. Say Loan A charges a $400 establishment fee and $10 a month. Loan B charges no establishment fee but $15 a month. Over five years Loan A's fees come to $1,000 and Loan B's come to $900. That's why the comparison rate and the total repaid matter more than the rate in the ad.
The figures are an illustration only, not fees offered by any lender.
Questions to ask any lender
- What is the comparison rate for my amount and term?
- What fees will I pay upfront, and each month?
- Is there a balloon, and how big?
- What does it cost to pay the loan out early?
- Is the rate fixed for the whole term?
- Can I make extra repayments without a fee?
You can check the maths yourself with the comparison rate calculator and the repayment calculator.
Where to go next
For car finance options by situation, start with car finance in Australia. Pages for particular incomes: pensioner car loans, car loans for visa holders, car loans for nurses and healthcare workers and car loans in Canberra.
About this comparison
We compare eligible options from a panel of 50+ lenders. We do not compare every lender or product in the market, and the lenders considered depend on your circumstances and eligibility. Simple Loans may receive commission from a lender if your loan settles; see our Credit Guide.
We do not charge an upfront assessment fee. Lender fees may apply, and we may receive commission from a lender if your loan settles.
DPC Broker Pty Ltd trading as Simple Loans, Australian Credit Licence 509582, AFCA member 67083.
WARNING: Any comparison rate provided is true only for the example given and may not include all fees and charges. Different terms, fees or loan amounts might result in a different comparison rate. Approval is subject to lender credit criteria.
How it works.
Tell us about the car and your income
A short enquiry about the car, the amount and how you earn.
We line up eligible options
We look across our panel of 50+ lenders for options that fit, and show you the comparison rate and fees for each one.
You choose, or walk away
If one suits you, we handle the application with that lender. If none do, there's no obligation.
Frequently asked questions.
What is a comparison rate?
It's a single figure that rolls the interest rate and most standard fees into one, worked out on an example loan amount and term. It helps you compare like with like, but it can't capture every fee, and it changes when the amount or term changes.
Why do two loans with the same rate cost different amounts?
Fees. Establishment fees, monthly account fees, dealer origination fees and early payout costs all sit on top of the interest. Compare the total you'd repay over the full term.
Does comparing car loans affect my credit score?
Submitting this enquiry does not itself create a hard credit enquiry. If you choose to proceed with a lender, a credit check may be required. We will explain that step before a formal application is submitted.
Is a dealer finance offer worth comparing?
Yes. Ask the dealer for the comparison rate, every fee and the total repaid, then line it up against other quotes on the same amount and term. Sometimes the dealer offer stacks up. Sometimes it doesn't.
Do you compare every lender in Australia?
No. We compare eligible options from a panel of 50+ lenders, not the whole market. Simple Loans may receive commission from a lender if your loan settles.
How much does Simple Loans charge?
We do not charge an upfront assessment fee. Lender fees may apply, and we may receive commission from a lender if your loan settles.
Ready to get started.
No upfront assessment fee. We compare 50+ lenders to compare eligible options.
Simple Loans is a finance comparison tool. Holder of Australian Credit Licence No. 509582. All applications are subject to lender approval. Terms, conditions, fees and charges apply. This information is general in nature.