One of the first questions everyone asks about car finance is "what rate can I get?" The honest answer? It depends. But here's what you need to know about car loan rates in 2026.
Current Car Loan Rates in Australia (2026)
As of early 2026, car loan interest rates in Australia typically range from:
- New cars: 5.99% - 12% p.a.
- Used cars (dealer): 6.99% - 14% p.a.
- Used cars (private sale): 7.99% - 15% p.a.
That's a wide range — and where you land depends on several factors we'll cover below.
What Affects Your Interest Rate?
1. Your Credit Score
This is the big one. Lenders use your credit score to assess how risky you are as a borrower. A higher score = lower risk = better rate.
- Excellent credit (800+): Access to the best rates
- Good credit (700-799): Competitive rates available
- Average credit (500-699): Higher rates, fewer lender options
- Poor credit (below 500): Specialist lenders only, significantly higher rates
2. The Vehicle (New vs Used, Age)
Newer vehicles typically get better rates because they're worth more as security. Older vehicles are higher risk for lenders (they depreciate faster, more likely to have issues).
- New cars: Best rates
- Used cars under 5 years: Good rates
- Used cars 5-10 years: Higher rates
- Used cars 10+ years: Highest rates, some lenders won't finance
3. Loan Amount and Term
Very small loans (under $10,000) often have higher rates because they're less profitable for lenders. Very long terms (7+ years) can also attract higher rates.
4. Your Employment and Income
Stable employment with consistent income = lower risk = better rates. Self-employed borrowers or those with irregular income may pay slightly more.
5. Secured vs Unsecured
A secured loan (where the car is used as collateral) will almost always have a lower rate than an unsecured personal loan for the same purpose.
What's a "Good" Rate in 2026?
Here's a rough guide:
Rate Benchmarks (Secured Car Loans, 2026)
Excellent: Under 6.5%
Good: 6.5% - 8.5%
Average: 8.5% - 11%
Below average: 11% - 14%
High risk: 14%+
If you're being quoted significantly higher than these ranges, it's worth shopping around or talking to a broker.
Fixed vs Variable Rates
Most car loans in Australia are fixed rate — meaning your rate stays the same for the life of the loan. This makes budgeting easy and protects you if rates rise.
Variable rate car loans exist but are less common. They can be lower initially but carry the risk of increasing.
Comparison Rate vs Advertised Rate
Always look at the comparison rate, not just the advertised rate. The comparison rate includes fees and charges, giving you a truer picture of the loan's cost.
A loan with a low advertised rate but high fees might actually cost more than a loan with a slightly higher rate and lower fees.
How to Get the Best Rate
- Check your credit score before applying — fix any errors
- Pay down existing debt — lower debt = better borrowing position
- Save a deposit — borrowing less reduces lender risk
- Choose a newer vehicle — better security for the lender
- Use a broker — we compare multiple lenders to find the best fit
- Don't just accept the first offer — rates vary significantly between lenders
Don't Obsess Over Rate Alone
While the interest rate matters, it's not everything. A loan with a slightly higher rate but more flexibility (early payout without penalty, for example) might be better for your situation.
Focus on the total cost and whether the loan fits your circumstances.
The Bottom Line
Interest rates vary widely based on your circumstances. The best way to know what rate you can get is to apply and find out. A good broker will tell you upfront what's realistic for your situation.
Want to know what rate you'd qualify for? Get a free quote — no obligation, no credit check for quotes.