Car Finance Explained: What You Need to Know Before You Sign

Don’t Just Accept the Dealer’s Finance

When you buy a car from a dealership, they’ll almost always offer you finance on the spot. It’s convenient — but it’s rarely the best rate. Dealers earn a commission on the finance they sell, which means the rate they offer you is often inflated. Always compare before you sign.

Your Main Options

Personal Car Loan (Consumer Loan)

The most common option for private buyers. You borrow a fixed amount, pay it back over 1–7 years, and own the car outright from day one. Rates vary significantly between lenders, so it pays to shop around — which is exactly what Claire does for you.

Chattel Mortgage (for Business Use)

If you’re buying a vehicle primarily for business purposes, a chattel mortgage may allow you to claim the GST, interest, and depreciation as tax deductions. Speak to your accountant about whether this applies to you.

Novated Lease (via Your Employer)

If your employer offers salary packaging, a novated lease lets you pay for your car (and running costs) from your pre-tax salary, potentially saving you thousands in tax each year. Not all employers offer this, but it’s worth checking.

What Affects Your Car Loan Rate?

Lenders look at your credit score, income, employment history, and the age of the vehicle. Newer cars generally attract lower rates. A good broker can match you with the lender most likely to approve you at the best rate — without damaging your credit score with multiple applications.

New vs. Used Cars

Finance for used cars (especially those over 7 years old) can be harder to obtain and may come at a higher rate. If you’re buying a used car privately, make sure you factor this into your budget.

Get Pre-Approved Before You Shop

Knowing exactly how much you can borrow before you walk into a dealership puts you in a much stronger negotiating position. You can focus on the price of the car rather than the monthly repayment — which is exactly what dealers want you to focus on.

Quick and Easy Car Finance with Claire

Claire can arrange car finance quickly — often within 24–48 hours — with competitive rates from her panel of lenders. Fill out the quick car finance form and she’ll be in touch with your options.