Fixed Rate Loans
Your interest rate stays the same for the entire loan term. Monthly repayments are predictable, making budgeting easy. Currently, fixed rates in Australia sit around 6.5-9% for used cars. Best for: people who want certainty and are locking in during a low-rate period.
Variable Rate Loans
Your interest rate can change based on market conditions. Repayments may go up or down. Often start lower than fixed rates. Best for: people who can handle payment fluctuations and want the option to pay off early without penalty.
Balloon Payments
Some loans offer lower monthly repayments with a large final payment (balloon). This can make a more expensive car affordable month-to-month but means you'll owe a significant amount at the end. Best for: people who plan to trade up or refinance before the balloon is due.
Loan Terms
Typical car loan terms are 3-7 years. Shorter terms mean higher monthly payments but less total interest. A 5-year loan at 7% on a $30,000 car costs about $3,500 more in interest than a 3-year term.
Getting the Best Rate
Shop around between banks, credit unions, and dealer finance. Your credit score, employment history, and deposit size all affect your rate. At NORTH Motor, we work with multiple lenders to find the most competitive rate for your situation.