With no RBA rate cut, buyers seeking the lowest car loan interest rates can consider their financials, borrowing less and using a broker for more lenders. The September quarterly inflation report came as a surprise to many analysts and the Reserve Bank. The underlying inflation rate, a key indicator for the RBA when it comes to rate changes, jumped to 3%. Headline inflation is 3.2%. The RBA’s target for inflation is 2-3%. Market expectations appear to be that inflation will not ease back until well into 2026.
If there are no RBA cash rate cuts in the foreseeable future, that could mean lenders will also not be lowering their rates. Leaving buyers looking for the best vehicle finance rates looking for other ways to reduce their loan commitments.
We outline what the Reserve Bank said about future rate cuts and actions that buyers can take to ensure they secure the most affordable vehicle finance rates on the market.
When will there be an interest rate cut?
The Board of the Reserve Bank met on 4 November and announced the decision to leave the cash rate on hold at 3.6%. RBA Governor Michele Bullock said temporary factors were the reason for some of the rise in inflation in the September quarter. Ms Bullock said that while activity in the domestic economy was recovering, the outlook both domestically and globally remained uncertain.
As is usual, the media statement announcing the monetary policy decision did not include an indication as to future decisions. In the media conference following the decision, a journalist asked if the RBA needed to start tempering expectations around future cuts. Ms Bullock reply was quite technical in regard to forecasts for inflation getting back to around 2.6% by mid-2027. But noted that the further out forecasts are made, the more uncertainty is to be considered.
Based on the inflation figures and November decision, the general commentary by analysts is for no further rate cuts until 2026. For buyers planning to buy a new vehicle early next year, some analysts are commenting that a February cut may be on the cards, but not assured.
Does price affect lowest car loan interest rates?
Buyers looking for ways to achieve their best finance rates can essentially look at how much they are borrowing. Particularly in relation to the price of the vehicle. The price of the vehicle itself may not determine the rate offered, but the amount borrowed will.
Lenders will assess personal finance applications to determine the credit limit for the individual. By borrowing less than the price of the vehicle, the loan represents a lower risk to lenders. Subsequently, a better rate may be offered. To achieve a lower borrowing and potentially a better rate, buyers can consider increasing their down payment, buying a cheaper priced vehicle, or negotiating a better price with the dealer.
When looking for a better new vehicle deal, buyers may consider the less popular models. According to the November car sales figures from the FCAI hybrids are selling well but EVs not so well. Cab chassis models such as HiLux and Ranger continue to top the sales charts along with SUVs. But passenger vehicles continue to be less popular with buyers. Dealers may be in a position to offer a better deal on their less in-demand models.
One issue to keep in mind, if you’re considering waiting to buy until rates do go down, there is the possibility that vehicle prices could rise in the interim. Using a Finance Calculator to work up estimates based on different rates and different vehicle prices, may clarify the scenario and assist with buying decisions.
Do Your Financial Housework
An important aspect of achieving the best possible interest rate and overall finance conditions is to address the financials before applying. That includes debts and credit card limits and credit score. Removing errors from the credit report if they appear, having a credit card limit reduced by the bank, and finalising other loans may contribute to a better loan offer.
Why shouldn’t you shop around for lowest car loan interest rates yourself?
Shopping around the lending market for the best rate would seem a sensible thing to do. But individuals may not be aware that applying for the same loan from multiple lenders can have a negative effect on their credit score.
A more effective way to cover off on a large lending market for the best rate is to use a specialist motor vehicle finance broker. When we do the work to find the best current market rate for you, it does not affect your credit score.
We also provide access to a large lending market and lenders not available directly to buyers. Review our current rates as a guide and connect with us to have your best vehicle finance rate secured for you.
To secure your lowest car loan interest rates, contact Jade Car Loans 1300 000 003 by phone or online.
DISCLAIMER: IN REGARD TO MISREPRESENTATIONS AND ERRORS CONTAINED IN THE MATERIAL AS PRESENTED, LIABILITY IS NOT ACCEPTED. THE DETAILS AND CONTENT IS PROVIDED FOR CAR BUYERS AND INDIVIDUALS AND BUSINESS SEEKING FINANCE PURELY AS GENERAL INFORMATION. THIS IS NOT PROVIDED AS THE ONLY SOURCE OF FINANCIAL INFORMATION. ANYONE THAT CONSIDERS THAT NEED FINANCIAL ADVICE ABOUT THEIR SPECIFIC REQUIREMENTS SHOULD SEEK THEIR OWN FINANCIAL ADVISOR.
" alt="">