How to Get a Car Loan in Australia: Simplified (2026)

How do you get a car loan in Australia?

To get a car loan in Australia, you check your credit report, work out what you can afford, get pre-approved, choose the car, apply with your ID, payslips and bank statements, then sign the contract once the lender approves you. By law, the lender must check that you can afford the loan before it says yes.

If you are working out how to get a car loan in Australia for the first time, the form is usually the easy bit. Knowing what to do first, what a lender will look at and which costs sit outside the advertised rate is harder.

This guide walks through it in plain English, in eight steps. The author is Inder Singh, Automotive Finance Specialist at New Choice Car Loans, an Australian finance broker (Australian Credit Licence 494494). It was last reviewed in November 2026.

Key takeaways

• The eight steps are: check your credit report, set a budget, decide how much to borrow, choose where to borrow, get pre-approved, choose and check the car, apply in full, then sign the contract and collect the car.
• Lenders look at five things: your income, your living expenses, your debts, your credit history and the car itself.
• Compare loans on the comparison rate. It includes most fees, so it shows the cost more fully than the headline interest rate.
• The average interest rate on new fixed-term personal loans in Australia was 9.50% p.a. in August 2026, according to the Reserve Bank (table F8). Your rate may be higher or lower.
• Pre-approval is a lender's conditional yes before you choose a car. It lasts a limited time, and the lender checks everything again before final approval, so treat it as a guide rather than a guarantee.
• Don't apply with lots of lenders at once. Each full application can leave a credit enquiry (a record that a lender checked your credit file) on your report for five years.
• Ask for every fee in writing. ASIC's June 2026 review found car loans typically carried two establishment fees (one-off set-up fees), and in one case more than $9,000 in fees.

Contents

1. How car finance works in Australia
2. Can you get a car loan? What lenders check first
3. How to get a car loan in Australia, step by step
4. Where to get a car loan: bank, dealer, broker or online lender
5. What documents do you need for a car loan?
6. How long does it take to get a car loan?
7. What a car loan really costs in 2026
8. Red flags and common mistakes
9. After you get the car: repayments, refinancing and hardship
10. Where New Choice Car Loans fits in
11. Frequently Asked Questions
12. Sources

How car finance works in Australia

A car loan is money you borrow to buy a vehicle and pay back, with interest and fees, over a set period. In Australia that period is usually one to seven years, according to ASIC's Moneysmart.

Learn a handful of terms and every loan offer gets easier to compare.

What is a car loan?

A car loan is a type of credit with a fixed end date. You borrow a set amount, you make regular repayments, and the loan is finished when the last repayment is made.

You can get one from a bank, a credit union, an online lender or a car dealer. Dealers do not usually lend their own money. They arrange a loan from a lender they work with.

You can also use a finance broker, who compares loans from a group of lenders (called a panel), helps you apply and passes your application to the lender. The lender, not the broker, decides whether to approve you.

Secured vs unsecured car loans

A secured car loan uses the car as security. If you stop making repayments, the lender can take the car and sell it to recover what you owe.

An unsecured car loan has no security. It is really a personal loan used to buy a car. Moneysmart notes that unsecured loans often have higher interest rates, because the lender takes on more risk.

Most car loans in Australia are secured. Because the car is the security, lenders often set rules about it, such as a maximum age or a minimum value. If the car you want is old or unusual, a secured loan may not be available for it.

Interest rate vs comparison rate

The interest rate is the yearly percentage the lender charges on the money you owe. It is shown as "% p.a.", which means per year.

The comparison rate is a single percentage that combines the interest rate with most of the loan's fees and charges. It shows the cost of a loan more fully than the interest rate alone.

Under Part 10 of the National Credit Code, an advertisement for fixed-term consumer credit, such as a car loan, that shows an interest rate must also show a comparison rate. ASIC explains that the comparison rate includes interest and most fees, but leaves out government fees and fees that depend on events, such as paying the loan off early.

When you compare two loans, compare their comparison rates for the same loan amount and the same term.

Fixed or variable rate

With a fixed rate, your interest rate stays the same for the whole loan, so your repayments do not change. Most car loans are fixed.

With a variable rate, the rate can go up or down during the loan, so your repayments can change. Moneysmart says variable loans usually do not charge an early exit fee if you pay the loan off early.

A fixed rate makes budgeting easier. A variable rate gives you more flexibility to pay the loan off early.

Loan term, deposit and balloon payments

The loan term is how long you have to repay the loan. A longer term means smaller repayments, but you pay interest for longer, so the loan costs more in total.

A deposit is money you put towards the car yourself, so you borrow less. A deposit is not always required, but it lowers your repayments and the total interest.

A balloon payment (also called a residual) is a lump sum you agree to pay at the end of the loan. It makes your regular repayments smaller. Moneysmart warns that the total cost of a loan with a balloon is generally higher, and you still have to find that lump sum when the loan ends.

The fees nobody mentions at the dealership

The interest rate gets the attention, but fees can add a lot to the cost. Moneysmart names the first three of these, and the rest are common in loan contracts:

• Establishment fee: a one-off fee charged when the loan is set up.
• Broker fee: a fee for arranging the loan, if your broker charges you directly.
• Dealer or introducer fee: a fee paid when a dealer arranges your loan.
• Monthly or account fee: a small fee charged for the life of the loan.
• Early repayment fee: a fee for paying off a fixed-rate loan early.
• Late payment fee: charged if a repayment is missed.

In June 2026, ASIC released a review of more than 350,000 car loans from eight providers, called REP 832 "Lifting the bonnet". It found that loans typically carried two establishment fees: one from the lender, and one from the dealer or broker who sold the loan.

So before you sign, ask one question: "What is every fee on this loan, and who is it paid to?" Ask for the answer in writing.

Can you get a car loan? What lenders check first

Most Australians aged 18 or over with a regular income can apply for a car loan. Whether you are approved depends on one question: does the lender believe you can make the repayments without hardship?

There is no single pass mark. Each lender has its own rules. But they all start from the same law and look at the same basic things.

The basic checklist

Before you apply, check that you can tick most of these:

• You are 18 or older.
• You are an Australian citizen or permanent resident, or you hold a visa with work rights (some lenders accept temporary visa holders).
• You have a regular income you can prove, from a job, a business or, with some lenders, Centrelink.
• Your credit history is reasonable, or you can explain any problems on it.
• You want to buy a car the lender is willing to finance.

If you can't tick one of these, you may still have options. They are covered under special situations below.

Responsible lending, in plain English

Responsible lending is the set of rules that says lenders and brokers must not put you in a loan that is unsuitable for you. The rules are in Chapter 3 of the National Consumer Credit Protection Act 2009 (the NCCP Act).

In everyday terms, the rules mean three things:

1. They must ask. The lender or broker must make reasonable inquiries about your income, your expenses, your debts and what you need the loan for.
2. They must check. They must take reasonable steps to verify what you tell them. That is why lenders ask for payslips and read your bank statements line by line.
3. They must say no if the loan is unsuitable. A loan is unsuitable if you probably could not make the repayments, could only make them with substantial hardship, or if the loan does not meet what you need.

Brokers do a "preliminary assessment" (sections 115 to 120 of the Act). Lenders do a full assessment before the loan is made (sections 128 to 133). ASIC's Moneysmart says a lender must turn you down if the loan could cause you hardship.

This is also why you should be wary of any "no credit check" car loan promise. Before you trust one, read our post on why no credit check car loans don't add up.

The five things a lender looks at

1. Your income. How much you earn, how regular it is, and how long you have earned it. Full-time pay is easiest to assess. Casual, self-employed and Centrelink income can be accepted too, but lenders may want more proof.

2. Your living expenses. Rent or board, food, bills, transport, insurance, subscriptions. Lenders compare what you tell them with your bank statements.

3. Your existing debts. Credit cards (lenders often count the full limit, not just the balance), personal loans, other car loans and buy now pay later accounts. The OAIC notes that buy now pay later is a type of credit under the National Credit Code and may appear on your credit report. Since 10 June 2025, buy now pay later providers have needed an Australian Credit Licence, according to ASIC.

4. Your credit history. Whether you have paid past debts on time, and how many times you have applied for credit recently.

5. The car. Its age, price and type. If the loan is secured, the car has to be worth enough to back it.

Your credit score in two minutes

Your credit score is a number that sums up your credit report. Moneysmart says Australia has two main credit reporting bodies, Equifax and Experian, and scores run from zero to either 1,000 or 1,200 depending on the agency. There is no single minimum score that every lender uses, so for score ranges and what lenders tend to look for, read our guide to the minimum credit score for a car loan in Australia.

Special situations

Bad credit. A default or late payments on your file does not always rule you out, but it narrows your options. Our complete guide to bad credit car loans covers this in detail, and we also arrange bad credit car loans.

Casual or part-time work. Many lenders accept casual income. They usually want to see that your hours have been steady for a while.

Self-employed or ABN holders. You will need to show business income, often with tax returns or business bank statements. See our page on business car loans.

Centrelink income. Some lenders accept certain Centrelink payments as income. Others do not, so ask before you apply.

Temporary visa holders. Some lenders accept applicants on student, graduate, working holiday or bridging visas with work rights. See our page on student and temporary visa car loans.

Bankruptcy or a debt agreement. Some specialist lenders consider applicants during or after a bankruptcy or a Part IX debt agreement. See bankruptcy car loans, Part IX debt agreement car loans and our post on getting a car loan after bankruptcy or Part 9.

First car, no credit history. Having no history is different from having bad history. A steady job, savings and a deposit help. Some lenders accept a guarantor, someone (often a parent) who agrees to repay the loan if you can't. Being a guarantor is a serious commitment, so they should get their own advice first.

How to get a car loan in Australia, step by step

Getting a car loan comes down to eight steps. If you do them in this order, the big decisions are made before you walk into a dealership.

The eight steps, in order:

1. Check your credit report, for free.
2. Set a budget for the whole cost of the car, not just the repayments.
3. Decide how much to borrow and for how long.
4. Choose where to get your loan.
5. Get pre-approval before you shop.
6. Choose the car and check its history.
7. Submit your full application with your documents.
8. Get final approval, sign the contract and settle.

Step 1: Check your credit report (free)

Your credit report is a record of how you have used credit. It lists the loans and credit cards you have, the credit you have applied for, whether you have paid on time, and any defaults.

The OAIC says each credit reporting body must give you your report for free once every three months. You can also get a free copy if you have been refused credit in the past 90 days, or if information on your report has been corrected.

To get yours, contact the two main credit reporting bodies. Moneysmart lists Equifax (138 332) and Experian (1300 783 684). Ask each of them for your free report. You don't need to pay a website for your score or report.

When it arrives, check three things:

• Every account on it is yours.
• Repayments you made on time are not shown as late.
• Any default listed is correct and has the right amount.

If something is wrong, ask the credit reporting body or the lender to fix it. Correcting a mistake is free, and Moneysmart points out you don't need to pay a credit repair company to do it.

It also helps to know how long information stays on your report. These are the periods the OAIC lists:

Credit enquiries are where many people go wrong.

A credit enquiry is a record that a lender has looked at your credit report. There are two kinds.

A hard enquiry happens when you make a full application for credit and the lender checks your file. It is recorded on your report, other lenders can see it, and it stays for five years.

A soft enquiry (sometimes called a quote enquiry) lets a lender or broker look at your file to give you a quote. Westpac's guidance is that soft enquiries generally don't affect your credit score, while hard enquiries may.

So don't shop around by applying everywhere. Several hard enquiries in a short time can make lenders wonder why so many others have looked at you. If you have been declined recently, read our post on what to do if you've been declined for a car loan before you try again.

Step 2: Set a budget for the whole car

Your budget has to cover the repayment and everything it costs to own and run the car.

Moneysmart's car loan checklist asks you to include stamp duty, registration, insurance and running costs.

Write your monthly budget down. Start with your take-home pay. Take off rent, bills, food, existing debts and savings. What is left has to cover the repayment and every line in the table above.

If the numbers only work when everything goes perfectly, the car is too expensive. Choose a cheaper car or save a bigger deposit.

Our post on how to budget for your car loan repayments has a worked method. You can also test repayments with our car loan repayment calculator.

Step 3: Decide how much to borrow and for how long

Once you know your budget, choose a loan amount and a loan term that fit inside it. The term changes the cost more than most people expect.

This table shows a $30,000 loan at 9.50% p.a. over different terms.

These figures are illustrative only. They are our own calculation, using 9.50% p.a., the Reserve Bank's average rate for new fixed-term personal loans in August 2026 (table F8). They leave out fees. They are not a quote and not a New Choice Car Loans rate.

Look at what the term does. Going from five years to seven cuts the repayment by about $140 a month, but adds about $3,380 in interest. The balloon cuts the repayment by about $118 a month, but adds about $1,930 in interest, and you still owe $9,000 at the end.

Our advice: keep the term as short as your budget comfortably allows. A lower repayment feels good today, but you pay for it later.

A deposit helps too. Every dollar of deposit is a dollar you don't borrow and don't pay interest on. Some lenders offer loans with no deposit to applicants who qualify, but a deposit can make your application stronger.

Step 4: Choose where to get your loan

You can borrow from a bank or credit union, an online lender, through a dealer, or through a finance broker. Each has trade-offs, which are set out in the next section on where to get a car loan.

Decide before you visit a dealer. If you arrive without finance sorted, it is easy to take the first offer just to drive home today.

Step 5: Get pre-approval before you shop

Pre-approval (also called conditional approval) is a lender's early "yes, subject to conditions". It tells you roughly how much you can borrow before you choose a car.

Pre-approval helps you in three ways:

• You know your real budget, so you only look at cars you can afford.
• You can negotiate like a cash buyer, because the money is lined up.
• You are less likely to be pushed into finance you didn't plan for.

But pre-approval is not a guarantee. It has conditions and a time limit. Westpac says its conditional approval is usually valid for 30 days. Other lenders set their own periods, so ask how long yours lasts.

Before final approval, the lender checks everything again. Westpac lists the kinds of things that can stop a pre-approved loan going ahead: your circumstances changing, the car not meeting the lender's rules, or information that can't be verified.

So between pre-approval and settlement, don't change jobs if you can help it, don't take on new debt, and don't apply for other credit.

At New Choice Car Loans, our FAQ explains that we start with a soft check. We only do a hard check when you decide to proceed with a specific loan offer.

Step 6: Choose the car and check it

Now you can shop. Whether you buy from a dealer or a private seller, do these checks.

Check the lender will accept the car. Ask about age limits, price limits and whether the lender finances private sales. Not every lender does.

Get the VIN. The VIN (vehicle identification number) is a unique code on the car and its paperwork. You need it for the checks below and for your loan.

Do a PPSR check. The PPSR (Personal Property Securities Register) is the government register that shows whether money is owed on a car. A search costs $2 online. The PPSR says a search shows whether a car has a security interest registered against it, and can also show whether it has been reported stolen or written off. You get a certificate as a record.

If you buy a car with money still owing on it, the lender who is owed could repossess it, even after you've paid. So do the PPSR check every time you buy privately.

Inspect it. For a used car, pay for an independent inspection before you commit. It costs far less than a hidden fault.

If you are choosing between new and used, our guide to new vs used car financing compares the trade-offs.

Step 7: Submit your full application

Once you have chosen the car, you make your full application. You will be asked for:

• Your personal details, address history and employment history.
• Your income, your living expenses and every debt you have.
• Details of the car, such as the dealer's invoice or the private sale details.
• Your documents, which are covered in the documents section below.

Be accurate. Lenders must verify what you tell them, so a forgotten credit card or an understated expense will usually come out in your bank statements. It is far better to disclose it upfront than to have the lender find it.

You can apply online with New Choice Car Loans when you are ready.

Step 8: Approval, contract and settlement

Unconditional approval (also called formal or final approval) means the lender has checked everything and is ready to lend, subject only to you signing the contract.

Next comes the loan contract. Read all of it before you sign, and check:

• The loan amount matches what you agreed.
• The interest rate and comparison rate.
• Every fee, including establishment fees and monthly fees.
• The loan term and the repayment amount.
• Any balloon payment, and how much it is.
• What it costs to pay the loan off early.
• Any add-on insurance or extras you didn't ask for.

Before you collect the car, arrange insurance. Lenders often want proof of comprehensive cover on a secured loan.

Settlement is when the lender pays for the car and the deal is complete. The lender usually pays the dealer or the private seller directly, though some loans are paid into your account. Then you collect the car and drive away.

Where to get a car loan: bank, dealer, broker or online lender

There is no single best place to get a car loan. The right option is the one that gives you the lowest total cost for a loan you can comfortably repay, after you have compared at least two or three offers.

Dealer finance

Dealer finance is convenient. You choose the car and sort the loan in one visit.

But convenience can cost you. Before 1 November 2018, some lenders let dealers and brokers set your interest rate within a range, and paid them more commission when the rate was higher. These were called flex commissions, and ASIC's ban on them started on that date.

That ban helps, but fees are still a big issue. ASIC's 2026 review found distributor fees, paid to the dealer or broker who sells the loan, ranging from a flat $912 up to $2,500.

So at the dealership, ask three things. Who is the lender? What is the comparison rate? What is every fee, and who gets it? If the answers are vague, get a second quote before you sign.

Finance brokers

A finance broker does the shopping around for you. They look at your situation, compare loans from their panel, and help you apply. New Choice Car Loans is a broker.

A broker who helps you with a car loan has legal duties under the NCCP Act:

• They must give you a credit guide (section 113). This document tells you who the broker is, their licence number, and how to complain.
• If they will charge you a fee, they must give you a quote for it first (section 114).
• They must make a preliminary assessment that the loan is not unsuitable for you, after making reasonable inquiries and checking your information (sections 115 to 120). You can ask for a copy.

The law's separate "best interests duty" (ASIC Regulatory Guide 273) is written for mortgage brokers, meaning home loans. So with a car finance broker, ask directly how they are paid, whether you pay them a fee, and how many lenders they work with.

You can check any broker or lender holds an Australian Credit Licence on ASIC's professional registers.

Banks, credit unions and online lenders

Going direct to a lender suits people who have a strong application and want a simple process. If you already bank with someone, start there for a quote.

Online lenders can be fast and convenient. Treat them like any lender: compare the comparison rate, read the fee schedule and check the licence.

The catch with going direct is that each lender only offers its own loans. To compare, you have to apply to several, and every full application can add a hard enquiry to your credit report.

What documents do you need for a car loan?

Most lenders ask for photo ID, proof of income and recent bank statements, plus details of the car once you have chosen it. What else you need depends on how you earn your money.

At New Choice Car Loans, the baseline for a personal car loan is proof of identity and proof of income, such as recent payslips. Lenders on the panel may then ask for more, depending on your situation.

A few tips make the document stage faster:

• Download bank statements as PDFs straight from your bank's app.
• Make sure the name on your ID matches your application exactly.
• If you have just changed jobs, have your employment contract ready.
• List every debt, including buy now pay later accounts and credit cards you rarely use.

Missing or unclear documents often hold an application up. Getting them together before you apply is the easiest way to speed things along.

How long does it take to get a car loan?

A simple application can get an answer within a day. How long the whole process takes, from first enquiry to driving away, depends mostly on how quickly you find the car and provide your documents.

New Choice Car Loans says most applications receive a response within 24 hours, and the car is typically collected within a few days of approval. Other lenders and brokers will have their own timeframes.

Many delays can be avoided. They tend to come from missing documents, a car the lender won't accept, or details on the application that don't match the bank statements.

Private sales tend to take a little longer. The lender has to confirm the seller's details, check the PPSR and arrange to pay the seller.

If you are refinancing an existing car loan rather than buying a car, our refinance page says applications are processed within 24 to 48 hours and settlement typically takes 3 to 5 business days.

What a car loan really costs in 2026

In August 2026, the average interest rate on new fixed-term personal loans in Australia, the category car loans fall into, was 9.50% p.a., according to Reserve Bank data. Your own rate could be higher or lower depending on your credit history, income, the car and the loan.

The rate is only part of the cost. Fees, the term and any balloon matter too.

Interest rates right now

The Reserve Bank of Australia has raised its cash rate four times in 2026. It has been 4.60% since 30 September 2026. The cash rate influences what lenders pay for money, which flows through to loan rates.

The Reserve Bank's table F8 tracks average rates on new personal loans. Its figures for new fixed-term personal loans funded in July and August 2026 were:

These averages cover every kind of fixed-term personal loan, so treat them as a reference point. They are not quotes.

Borrowing for cars has cooled a little. The Australian Bureau of Statistics reported $4.7 billion in new personal fixed-term loan commitments for road vehicles in the June quarter of 2026 (seasonally adjusted). That was down 1.6% on the March quarter and down 5.0% on a year earlier.

For more on how rates are set, read our guide to understanding car loan interest rates.

Fees can add thousands

ASIC's REP 832, released in June 2026, looked closely at car loan fees. It reviewed more than 350,000 loans across eight car finance providers.

As the fee table earlier in this guide shows, ASIC found that loans typically had two establishment fees. The lender's fee ranged from $299 to $995. The distributor's fee, paid to the dealer or broker who sold the loan, ranged from a flat $912 up to $2,500.

At the extreme end, one customer paid more than $9,000 in fees on a $49,162 car loan. That included more than $7,800 to the lender and $1,320 to the broker, which ASIC put at about 18% of the loan amount.

Before you sign anything, ask:

• What is the lender's establishment fee?
• Is there a dealer, broker or introducer fee, and how much?
• Are there monthly fees?
• What does it cost to pay the loan off early?
• Are any of these fees being added to the loan, so I pay interest on them?

Why the comparison rate still matters

The comparison rate rolls interest and most fees into one number. That is why it is the best single figure for comparing loans.

It has limits. ASIC explains that it leaves out government fees and charges, and fees that depend on events that may or may not happen, such as paying the loan off early. So read the fee schedule as well.

Average loan sizes

Money.com.au analysed 12,158 car loan applications made on its platform between January and September 2026. It found the average car loan was $36,419. For new cars the average was $48,062, and for used cars it was $31,890.

These are one comparison site's figures, not national averages. They give a sense of what other Australians borrow, but they are not a target. Borrow what your budget supports.

You can model your own numbers with our car loan repayment calculator.

Red flags and common mistakes

The most expensive car loan mistakes usually happen in the last hour at the dealership: signing a contract you haven't read, agreeing to add-ons you didn't ask for, or stretching the term just to hit a weekly figure.

Watch for these:

• "Guaranteed approval" or "no credit check" promises. Licensed lenders must assess whether you can afford the loan. A promise to skip that is a warning sign.
• Applying with several lenders at once. Each full application can add a hard enquiry that stays on your report for five years.
• Only looking at the weekly repayment. A small repayment over seven years can cost thousands more than a slightly bigger one over five.
• A balloon you can't pay. If you sign up for a balloon, have a plan for paying it when the loan ends.
• Add-ons bundled into the loan. Extras such as add-on insurance or warranties can be added to what you borrow, so you pay interest on them. Ask what each one costs and whether you can say no.
• Being rushed. "This rate is only good today" is a sales line, not a reason to sign.
• Not checking who you're dealing with. Check the lender and any broker hold an Australian Credit Licence, and that they belong to AFCA, the free complaints body.
• Leaving debts off your application. Lenders verify your finances. Hiding a debt can get you declined, or into a loan you can't afford.
• Skipping the PPSR check on a private sale. For $2 you can find out whether money is owed on the car.
• Borrowing more than the car is worth. Moneysmart warns that if you have to sell the car, it may not cover what you still owe.

If anyone won't let you take the contract home to read overnight, walk away. A good deal will still be there tomorrow.

After you get the car: repayments, refinancing and hardship

Once the car is yours, the cheapest wins come from paying a little extra when you can, refinancing if your rate is no longer competitive, and calling your lender early if money gets tight.

Extra repayments

Paying more than the minimum reduces your balance faster, so you pay less interest. Before you do, check your contract for any fee. Moneysmart says variable-rate loans usually have no early exit fee. Fixed-rate loans may charge one if you pay out early.

Refinancing

Refinancing means replacing your car loan with a new one, usually to get a lower rate or better terms. It can make sense if your credit has improved since you took out the loan, or if rates have moved.

Compare the savings against any early repayment fee on the old loan and the set-up fees on the new one. Our post on when refinancing your car loan makes sense covers this, and you can see our car loan refinance page.

If money gets tight

Call your lender as soon as you think you'll miss a repayment. Don't wait until you're behind. ASIC's advice is to contact your lender early, because you can ask for help, such as a hardship arrangement that changes your repayments for a while.

ASIC's 2026 review shows why this matters. In a sample of 250 car loans where the car was repossessed and sold, 90% of borrowers still owed more than half of their total loan amount. Losing the car often doesn't end the debt.

Free help is available:

• National Debt Helpline: 1800 007 007. Free, confidential financial counselling. Phone lines are open weekdays from 9:30am to 4:30pm.
• AFCA (Australian Financial Complaints Authority): 1800 931 678. A free, independent service for complaints you can't sort out with the lender or broker. Raise the issue with the business first.

Where New Choice Car Loans fits in

New Choice Car Loans is a finance broker, not a lender. We compare options from a panel of Australian lenders, help you with the paperwork, and the lender makes the final credit decision.

A few facts about how we work:

• We hold Australian Credit Licence 494494, and our office is in Perth. We help people across Australia.
• We arrange car loans from $5,000 to $100,000, with terms from one to seven years.
• Our panel includes lenders such as Pepper Money, Liberty, Plenti and Wisr, among others.
• We start with a soft check. We only do a hard check when you decide to proceed with a specific loan offer.
• You can ask us for a copy of our credit guide.
• We can't promise approval or a particular rate. The lender assesses every application against its own criteria.

If you'd like to see what your repayments might look like, try our car loan repayment calculator. To learn more about the loans we arrange, visit car loans or our FAQs. When you're ready, you can apply online or call us on 1300 853 450.

General information only. This article does not take into account your objectives, financial situation or needs, and it is not financial advice. Consider whether a loan suits you and read the lender's documents before you apply. New Choice Car Loans (ACL 494494) is a finance broker, not a lender. All applications are subject to the lender's credit assessment and suitability criteria. Terms, conditions, fees and charges apply. Rates and figures quoted from public sources were correct at the dates shown and can change.

About the author. Inder Singh is an Automotive Finance Specialist at New Choice Car Loans. He helps readers understand car finance in plain English.

Last reviewed: November 2026.

Frequently Asked Questions

How hard is it to get a car loan in Australia?

It depends on your situation. With a steady income, manageable debts and a clean credit history, getting a car loan is usually straightforward. It gets harder with irregular income, high existing debts, recent defaults or lots of recent credit applications. Lenders must check you can afford the repayments without hardship, so what matters most is showing a budget that works. If one lender declines you, another with different rules may still consider your application.

What do you need to get a car loan in Australia?

You generally need to be 18 or older, have a regular income you can prove, and be a citizen, permanent resident or visa holder with work rights. Lenders ask for photo ID, recent payslips or other income proof, and bank statements. Once you choose a car, they need its details, such as the dealer's invoice or the private sale details. Self-employed applicants usually need tax returns or business bank statements as well.

How old do you have to be to get a car loan in Australia?

You need to be at least 18 to sign a loan contract in Australia. Being 18 doesn't guarantee approval. Lenders still look at your income, expenses and credit history. Younger borrowers often have little or no credit history, so a steady job, savings and a deposit help. Some lenders accept a guarantor, usually a parent, who agrees to repay the loan if you can't.

What credit score do you need for a car loan in Australia?

There is no single minimum credit score that every lender uses. Each lender sets its own criteria and looks at your whole situation, including income, expenses and debts, not just the number. Australian scores run from zero to 1,000 or 1,200, depending on the credit reporting body. A higher score usually means more choice and better rates. Our guide to the minimum credit score for a car loan in Australia explains the ranges in detail.

Do I need a deposit for a car loan?

Not always. Some lenders offer car loans with no deposit to applicants who meet their criteria. A deposit still helps. It lowers the amount you borrow, so your repayments and total interest are lower. It can also make your application stronger, because it shows you can save, and it means the car is less likely to be worth less than you owe.

How much can I borrow for a car loan based on my income?

There is no fixed multiple of your income. Lenders work out what you can afford by taking your income and subtracting your living expenses, existing debts and a buffer. What is left decides the repayment you can manage, and that sets the loan amount for a given rate and term. The fastest way to estimate it is to work out a monthly repayment you're comfortable with, then use a repayment calculator.

How long does car loan approval take?

It varies by lender. New Choice Car Loans says most applications receive a response within 24 hours. Full approval then depends on how quickly you provide documents and details of the car. Delays usually come from missing payslips, unexplained transactions in bank statements, a car the lender won't accept, or a private sale that needs extra checks.

How long does car loan pre-approval last?

It depends on the lender. Westpac, for example, says its conditional approval is usually valid for 30 days. Other lenders set their own periods. Ask your lender or broker how long your pre-approval lasts, and plan your car search around it. If it expires before you find a car, you may need to apply again, and the lender will reassess you.

Does car loan pre-approval affect your credit score?

It can, depending on how the lender checks your file. A soft enquiry, used to give you a quote, generally doesn't affect your credit score, according to Westpac. A hard enquiry, made when you formally apply, is recorded on your credit report for five years and may affect your score. Ask whether a pre-approval involves a soft or hard check before you agree to it.

Can you be declined after pre-approval?

Yes. Pre-approval is conditional. Before final approval, the lender checks everything again. You can be declined if your circumstances change, such as losing your job or taking on new debt, if the car doesn't meet the lender's rules, or if information on your application can't be verified. To protect your pre-approval, avoid new credit applications and big changes until the loan settles.

Is it better to get a car loan from a bank or a dealer?

Neither is always better. Dealer finance is convenient, but you may pay a dealer fee and face pressure to add extras. A bank may offer a good rate if you have a strong application, but you only see its own loans. The best approach is to get pre-approved before you visit the dealer, then compare the dealer's offer against it using the comparison rate and the total fees.

Is a car loan or a personal loan better?

A secured car loan, where the car is security, often has a lower rate than an unsecured personal loan, because the lender takes less risk. An unsecured personal loan can suit an older car that a lender won't take as security, or if you don't want the car tied to the loan. Compare the comparison rates and fees on both before you decide.

Can I get a car loan on Centrelink?

Some lenders accept certain Centrelink payments as income, and others do not. Whether you can get a loan depends on which payments you receive, how much they are, and whether the repayments are affordable after your living costs. You'll usually need a Centrelink income statement and bank statements. Ask a lender or broker which payments they accept before you apply.

Can I get a car loan as a casual worker?

Yes, many lenders accept casual income. They usually want to see that your hours and pay have been steady for a period of time, so you may need to provide more payslips or bank statements than a full-time employee would. If your hours vary a lot, lenders may average your income or use the lower end of it when assessing what you can afford.

Can I get a car loan for a private sale?

Yes, many lenders finance private sales, but not all of them do. You'll need the seller's details, the car's VIN and registration details, and usually a PPSR certificate showing whether money is owed on the car. Some lenders also want an inspection or valuation. Private sales can take a little longer to settle, because the lender has to confirm the seller and the car.

Can I get a car loan on a temporary visa?

Some lenders accept temporary visa holders, such as people on student, graduate, working holiday or bridging visas, as long as the visa has work rights and you have regular income. Lenders may want the loan term to fit within the time left on your visa. Expect to provide your passport, visa grant, payslips and bank statements.

How long are car loans in Australia?

Car loans in Australia usually run for one to seven years, according to Moneysmart. A longer term means lower regular repayments but more interest overall. For example, our illustrative $30,000 loan at 9.50% p.a. costs about $3,380 more in interest over seven years than over five. Choose the shortest term your budget can comfortably handle.

What happens after car loan approval?

After unconditional approval, you receive the loan contract. Read it carefully, checking the amount, rate, comparison rate, fees, term and any balloon. Once you sign and arrange insurance, the lender settles the loan, usually by paying the dealer or private seller directly. Then you collect the car. Your first repayment date will be set out in the contract.

Should I get a car loan or pay cash?

Paying cash means no interest and no fees, so it is the cheapest way to buy a car. But it can leave you without savings for emergencies. A loan lets you keep a cash buffer, at the cost of interest and fees. If you can pay cash and still keep an emergency fund, cash usually wins. If paying cash would empty your savings, a modest loan you can comfortably afford may be the safer option.

Can I pay off my car loan early?

Usually, yes. Moneysmart says variable-rate loans usually don't have an early exit fee. Fixed-rate loans may charge a fee for paying out early. Check your contract or ask your lender for a payout figure before you pay the loan off. Extra repayments along the way can also cut the interest you pay, so ask whether your loan allows them.

Sources

• ASIC (June 2026), 26-132MR: ASIC lifts bonnet on car finance costs and distribution concerns, and REP 832 Lifting the bonnet: ASIC's review of car loans
• ASIC Moneysmart (2026), Car loans
• ASIC Moneysmart (2026), Credit scores and credit reports
• ASIC Moneysmart (2026), Loan rejection
• Federal Register of Legislation (2026 compilation), National Consumer Credit Protection Act 2009
• ASIC (2026), Responsible lending
• OAIC (2026), Access your credit report
• OAIC (2026), What stays on a credit report?
• OAIC (2025), Information on your credit report
• Reserve Bank of Australia (2026), Cash rate target
• Reserve Bank of Australia (October 2026), Statistical table F8: Personal Lending Rates
• Australian Bureau of Statistics (August 2026), Lending Indicators, June Quarter 2026
• ASIC, National Credit Code (comparison rates)
• ASIC (2018), 18-329MR: ASIC ban to improve car finance practices begins
• ASIC (2025), 25-069MR: New regulatory guidance to support buy now pay later industry reforms
• ASIC (2020), RG 273 Mortgage brokers: Best interests duty
• Westpac (2026), Car loan pre-approval
• Personal Property Securities Register (2026), Searching
• Australian Financial Complaints Authority (2026), Make a complaint
• National Debt Helpline (2026)
• Money.com.au (October 2026), Australian Car Finance Statistics 2026