Car finance options

The pros and cons of using a personal loan, home loan redraw, car dealer finance, or car manufacturer finance to buy a car.
Learn more

01.Your finance options


There are essentially four different ways to pay for a car:

  • Car manufacturers' deals such as zero per cent interest, for instance, can lure in even the wariest of car buyers - but check the fine print. Large (up to 50% or more of the RRP of the car) lump sum payments can apply after the loan period is up.
  • Personal loans are often a great way to finance a car, holiday, or other major expense. They’re available for periods between one and seven years and usually have minimum amounts between $1000 and $10,000. The longer the period and the less you borrow, the lower the repayments.
  • Car dealer finance is used by a third of people who buy a car at a dealership with interest rates comparable to personal loans. But there are traps, such as large commissions or unnecessary insurance added on to the loan.
  • Home loan redraws are usually a much less expensive way to finance a car than a personal loan, as long as you pay the redraw back over the same period.




Sign up to our free

Receive FREE email updates of our latest tests, consumer news and CHOICE marketing promotions.

Your say - Choice voice

Make a Comment

Members – Sign in on the top right to contribute to comments