Used Car Finance

In some ways, both new and used car finance are the same but in some respects there are differences. Personal loans and business finance are available on both new and used cars but the actual loan offer made is dependent on the guidelines and requirements of individual lenders. Both used and new cars can be financed with: Secured Personal Auto Loan; Chattel Mortgage; Leasing and Commercial Hire Purchase. Differences may occur in regard to the interest rate offered and any conditions such as minimum and maximum loan amounts applied by individual lenders. The age, condition and value of a used vehicle are taken into account when a car loan offer is made and this can cause differences from a new motor vehicle loan.

Applying for a used car loan – either personal or business – is the same process as applying for a new vehicle loan. Loans for used cars are offered by a range of finance companies and banks, subject to their internal guidelines around used motor finance. You can apply for a loan over the phone or apply via an online form. For personal vehicle loans, you will be required to provide a range of information around your employment, income and expenditure, financial situation in regard to assets/property and the details of the car. For business vehicle finance you will need an ABN and as much financial documentation as you can provide plus details of the motor vehicle.

There are a number of reasons that motor vehicle finance brokers consider that they may offer a better finance deal than a buyer can achieve through a car dealer. Brokers usually have access to a large number of lenders including the major banks and with more choices have more opportunities to source you the cheapest loan. Dealer finance can be priced higher than you can achieve through brokers. Dealer finance is usually associated with one lender – either a third party or the manufacturer’s finance arm. This may limit your options to get the cheapest loan. Requesting a loan quote is not an obligation to proceed. So you can ask a broker for a quote on your loan and have that to compare with what the dealer offers and then make your own decision.

The age, condition and value of used cars are taken into account when lenders assess their loan offers for Secured Car Loans. Some lenders will have specific age limits on vehicles and others will assess each individually and take into the condition or mileage of a vehicle as well as model year. There is a minimum loan amount for car loans and the price of a second hand car may not meet that threshold. If your loan amount or the age of the vehicle does not meet the requirements of a Secured Loan, you can source a quote for an Unsecured Personal Loan. There is no general rule around the age of cars in terms of model year.

Lenders may request a deposit be paid to the seller when the loan amount being requested does not meet their guidelines in relation to the perceived value of the car or the individual application. For some applicants and for some older cars, the lender may request the applicant reduce the total amount being requested by way of paying a deposit to the seller. These guidelines are based on Secured Vehicle Loans. Where an applicant does not achieve an offer for a secured loan for a particular vehicle, an alternative is to apply for an unsecured personal loan. This type of loan does not have security offered so the vehicle itself is not an issue.