Car Loans

New and used vehicles can be financed differently: a vehicle’s age and expected remaining life can affect the maximum loan term and the lender’s approach to the finance.

Whether the vehicle is for personal use or business use can affect the structure, documentation and sometimes the finance product available. If you’re financing a vehicle for a registered business, mention this early, as the pathway can differ from a standard consumer car loan.

A deposit or trade-in reduces the amount financed. How much is required, if any, depends on the vehicle, its age and the lender’s own policy.

Terms are generally shorter than a home loan and are often matched to the vehicle’s expected useful life, particularly for used vehicles.

Some car loans include a balloon payment: a lump sum owing at the end of the term. This can reduce your regular repayments, but the balloon remains payable at the end, and the total interest paid over the loan may be higher than a structure without one. Consider what you’ll do at the end of the term: pay it out, refinance it, or sell the vehicle; each carries its own risk if the vehicle’s value has changed.

Establishment, ongoing and early payout fees can vary by lender and product, which is worth checking alongside the advertised rate.

Car loans are typically secured against the vehicle itself, which can affect the rate and terms compared with an unsecured product.