From Research to Road: How to Find the Best Car Loans in Australia

Car loans in Australia can be confusing. They’re full of jargon, complex choices, and pesky fees that sneak up on you. If you don’t know what to look for, you can get stuck with higher costs, repayments that don’t meet your budget, and a loan that doesn’t fit your needs. But you don’t have to let the finance maze trip you up.

Here at Fox Finance Group, we have over 17 years’ experience providing customers with stress free car finance. We cut through confusion and offer tailored guidance and solutions, so you can drive away with confidence.

We understand that a little extra knowledge and the right questions, can significantly improve your car finance experience. So, we are here to provide answers to some of the most common questions we see from customers, that can help to give you the clarity and confidence you need.

How Much Can I Borrow for a Car Loan?

When working out how much you can borrow, lenders look at a handful of factors—your income, debts, and credit score, plus their own unique criteria. But don’t overlook the Loan-to-Value Ratio (LVR). This ratio can pack a serious punch on your borrowing power, so keep this in mind when looking for your perfect loan.

An explanation of LVR

LVR, or Loan-to-Value Ratio, might sound complicated, but it’s simply a measure of how much you borrow compared to what the car is worth—expressed as a percentage. For instance, if you’re eyeing a $20,000 car and borrow $16,000, your LVR is 80%. The lower the LVR number, the less risk the lender takes on – and that can mean more favourable interest rates (or the option to borrow more). Be sure to read the fine print when you see those eye-catching low rates, though. Often, there’s a required deposit to keep the LVR low so the lender can keep their risk as low as possible.

At Fox Finance Group, we simplify the lending process by carefully evaluating every factor that could affect how much you can borrow. This allows us to tailor our car loan recommendations to your unique needs and circumstances, ensuring you receive a finance solution that truly works for you.

We often encourage clients to use our handy Car Loan Repayment Calculator. This tool gives you a clear picture of your repayments based on your budget, allowing you to plan effectively when determining how much you want to borrow.

What’s The Difference Between Secured & Unsecured Car Loans?

Generally speaking, car loans in Australia fall into two categories: secured and unsecured loans.

• Secured Loans: These use the vehicle as collateral, which often results in lower interest rates due to the reduced risk for the lender. In a secured loan if payments are not made the lender can repossess the car to try and recover their losses.
• Unsecured Loans: These don’t require collateral but typically come with slightly higher interest rates due to the increased risk for lenders. If someone decides to stop paying their unsecured loans, lenders have nothing to repossess or recover their losses with.

Both options have their pros and cons. If you’re eyeing an older or classic car, some lenders may not offer finance – or might quote a higher rate – because the vehicle’s booking value might be lower due to its age. In these cases, an unsecured loan can sometimes be the smarter choice, since the car itself isn’t factored into the lender’s assessment and won’t influence your loans interest rate.

On the flip side, if you’re buying a new vehicle and considering a residual or balloon payment, a secured car loan is generally your best bet. These loans often come with a lower interest rate and let you include a balloon—a feature you won’t find with unsecured loans.

At Fox Finance Group, we don’t just chase the lowest rate from our panel of 50+ lenders. Instead, we look at each lender’s products and features to make sure you’re getting the right fit for your needs. That way, you end up with a loan that’s not only competitive but also tailored to help you hit the road with confidence.

Does My Credit Score Impact Car Loan Approval?

Yes, your credit score plays a crucial role in determining your eligibility for a car loan, the amount you can borrow and the interest rate you’ll be offered. All lenders assess risk, and a credit file is a lenders way of determining risk based on a borrower’s financial history. A higher credit score often leads to more favourable terms, lower rates and higher loan limits, while a lower score may limit your options or decrease your borrowing limit and come with higher rates.

We understand that Australians seeking the best car loans want quick and clear answers about their eligibility as well as their Credit File. Our blog on improving and protecting your credit score provides valuable insights into how to prevent any issues that can lower your score, and ways you can enhance it. At Fox Finance Group, we are able to do a soft touch on your credit file as part of our assessment, which not only allows us to see exactly what a lender see’s and avoid any surprises but also doesn’t impact your score.

As part of our service to our customers, we not only guide you through your credit file, but also provide a free copy of your credit file to ensure you are up to date with all your important financial information.

Are There Special Loans for Buying an Electric Car?

Green vehicle loans are a specific loan product designed to encourage and support the purchase of eco-friendly vehicles, such as hybrid or electric cars. These loans often come with lower interest rates or special incentives to reward environmentally conscious choices, making it more affordable for buyers to reduce their carbon footprint.

It is important to note that different lenders have different qualifications for what a ‘green vehicle’ is. Some lenders only count full electric vehicles as green, whereas others will consider hybrid vehicles and may have restrictive terms around age and LVR as previously mentioned.

At Fox Finance Group we stay up to date with all our lenders product offerings, including green vehicle loans, ensuring that clients interested in green vehicle purchases can benefit from potential savings. We’ll do the heavy lifting and leg work to find out not only which lenders can provide great deals on green vehicle purchases, but also which lenders will accept the specific vehicle you are looking at and provide all the other features you are looking for in your car finance.

Can I Use My Current Car as a Trade-In for a New One?

Absolutely. Trading in your current car can be a straightforward way to lower the cost of your new ride. Here’s how it works: the dealer values your vehicle, and its assessed worth gets deducted from the price of the new one.

If there’s still finance owing on the car you’re trading in, the dealer will apply the trade-in amount to settle that loan first. Only after the existing finance is cleared will any remaining funds go toward your new purchase.

In cases where the trade-in amount doesn’t fully cover what’s owed, some lenders let you roll the shortfall—often called “negative equity”—into the new loan, so long as it doesn’t push the loan amount or Loan-to-Value Ratio (LVR) too high. For more details on how trade-ins work, be sure to visit our blog: The Role of Trade-Ins in New Car Financing

What Hidden Fees Should I Watch for with Car Loans?

It’s easy to get caught up in the excitement of buying a new car and before you know it you’re caught off guard by hidden fees, which can quickly add up and make your car loan more expensive than anticipated. Some common fees of lenders include:

• Establishment/Application Fees: A one-time fee to set up the loan.
• Direct Debit Fees: Charged when payments are processed.
• Early Payout Fees: A fee payable if the loan is paid out before the end date.
• Risk Fees: A fee charged by a lender to offset added risk (for example higher LVR)
• PPSR Fees: Fees charged by the lender to check whether a vehicle in encumbered with finance, and to register their security on the vehicle.

At Fox Finance Group, we believe in transparency. Every lender is different and has different fees depending on the products and features. Which is why we ensure when talking you through your options that we break down break down all fees and costs for you. Our commitment to clarity means you’ll understand every detail of your car loan and there will be no nasty surprises.

Can I Pay Off My Car Loan Early?

Good news: in many cases, you can. A lot of lenders let you clear your loan ahead of schedule without penalty. Since you only pay interest while the loan is active, for example, paying off a five-year loan in three years could save you two years of interest.

Just remember, not all lenders are the same. Some have early-payout fees that can eat into those potential savings, so it’s crucial to know your options and check the fine print before signing up.

At Fox Finance Group, we’ll help you choose a car loan that aligns with your long-term financial goals—so you can make the most of your money without facing unwelcome surprises.

Does Making Credit Enquiries Affect My Credit Rating?

Making credit enquiries can lower your credit score and affect your loan approval eligibility. Every loan enquiry made whether you are approved declined, or don’t proceed, reduces your overall credit score and is listed on your credit file for other lenders to see. This means, if you are making several enquiries in a short period of time, your credit score can drop significantly- which can also mean you qualify in a lower tier with the lender that offers lower max lends, higher rates and less flexible loan terms.

What Are The Benefits of a Low Doc Car Loan?

Low doc car loans are designed especially for self-employed people who don’t have the usual proof of income – like income tax returns or business activity statements – that standard lenders require. Instead, they allow alternative forms of income verification, making the application process simpler and more efficient.

Because they bypass traditional income checks, low doc business car loans do come with other eligibility requirements. To learn the ins and outs, head over to our blog on Low Doc Business Car Loans, where you’ll discover how these products work and how they can benefit both you and your business.

Our team of highly qualified Lending Specialists are experts in commercial lending. We take the time to assess your unique circumstances, then match you with the right lender to get you approved. We also know that your time is best spent in your business – not on the phone or online arranging finance. That’s why we make it our mission to find you the best options on the market, without all the hassle.

How Does Car Loan Refinance Work?

Car loan refinancing allows you to replace your existing car loan with a new one, often to secure a lower interest rate, reduce monthly payments, or a combination of both. This process can save you money over the life of the loan and improve your cash flow for other expenses.

Refinancing can be especially beneficial if your credit score has recently improved, as it may enable you to access a lower rate and repayment, as well as better terms, such as lower establishment fees or loans without early payout penalties. At Fox Finance Group, we specialise in connecting clients with Australia’s best car loan options, tailored to their unique needs. Our expertise simplifies the refinancing process, making it easy for you to enjoy the benefits of a more favourable loan.

Let Fox Finance Group Be Your Guide To The Best Car Loans In Australia

Finding the best car loans on the market doesn’t have to be overwhelming when you have Fox Finance Group on your side. As experts in car finance, we are ready to answer any questions you may have. With personalised loan structures tailored to your individual needs, expert guidance, and a wide range of lender options, we’ll help you secure the best car loans in Australia. Contact us today and make the most of our free pre-approval service—it won’t cost you a cent, doesn’t lock you in, and lets us do the heavy lifting by comparing the best deals on the market, all without impacting your credit score.