What's a good interest rate for a car loan in 2026?

For new cars with good credit, expect 6-8%. Used cars typically attract 8-12%. Rates above 12% suggest you should shop around or improve your credit.

Should I get a 5 or 7 year car loan?

Shorter is usually better. A 5-year loan costs significantly less in total interest than 7 years. Only extend the term if you genuinely can't afford the higher payments.

Is dealer finance a good option?

Sometimes, especially if they're running promotional rates. Always compare with bank and credit union rates before accepting. Dealers often earn commission on finance.

Car Loan Calculator

Calculator

Calculate your car loan repayments, total interest, and compare loan terms

Free to useNo data storedAI insightsUpdated: February 2026

Planning to buy a car? Use our calculator to work out your repayments based on the vehicle price, deposit, interest rate, and loan term. See how different options affect your budget.

Enter Your Details

Real-World Examples

New SUV Purchase

Sarah is buying a $45,000 SUV with $10,000 deposit at 7.5% over 5 years.

Inputs Used:

price:45,000deposit:10,000rate:7.5term:5

Loan amount: $35,000. Monthly payment: $701. Total interest: $7,060. Total cost: $42,060.

Budget Used Car

Tom needs a reliable $18,000 used car with $3,000 deposit at 9% over 3 years.

Inputs Used:

price:18,000deposit:3,000rate:9term:3

Loan amount: $15,000. Monthly payment: $477. Total interest: $2,172. Paid off quickly!

Frequently Asked Questions

Glossary

Balloon Payment

A large final payment due at the end of your loan, reducing regular repayments but requiring a lump sum.

Secured Car Loan

The car is used as security for the loan, typically offering lower interest rates.

Comparison Rate

A rate that includes the interest rate plus most fees, giving a truer cost comparison.

On-Road Costs

Additional costs like registration, stamp duty, dealer delivery, and CTP insurance.

Related Tools

Loan Comparison Calculator

Compare multiple car loan offers

Affordability Calculator

How much car can you afford?

Balloon Payment Calculator

Understand balloon payment options

How to Use

1Enter the vehicle purchase price
2Add your deposit or trade-in value
3Set the interest rate (check current rates)
4Choose your loan term
5Select your preferred repayment frequency

Key Information

Australian car loan rates typically range from 6-12% in 2026
Shorter loan terms mean higher payments but less total interest
A 20% deposit can help secure better rates
Balloon payments reduce regular payments but require a lump sum at the end

Pro Tips

Get pre-approved before visiting dealerships for stronger negotiating position
Compare secured vs unsecured car loans - secured often has lower rates
Factor in on-road costs (registration, stamp duty, insurance) beyond the price
Consider fortnightly payments to pay off faster without noticing

Avoid These Mistakes

Focusing only on monthly payment without considering total loan cost
Not factoring in running costs (fuel, insurance, servicing)
Accepting dealer finance without comparing bank/credit union rates
Choosing the longest term to minimize payments (costs much more overall)

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026