Fight the rising cost of used cars with a top-rated car loan in July

If you’ve been in the market for a used car, or even just casually glanced at car sales listings lately, you may have noticed that the cost of a second-hand vehicle is well above average. Drivers may instead want to prioritise a competitive, low-rate car loan to make this purchase more affordable.

The latest figures reported by the Australian Financial Review show that second-hand vehicle prices in Australia climbed 18.4% higher in the last year. Further data from Moody’s Analytics Used Vehicle Price Index also illustrates the growing cost of a used car. Overall increases in used car prices since early 2020 (start of the pandemic) are at a whopping 79%.

What’s driving this growth is the decrease in supply and sharp increase in demand for used vehicles. Car buyers looking for a new vehicle are facing extensive delays up to around 12-months.

The pandemic has been responsible for global supply chain issues, including the temporary shutting down of ports and factories. The Russian war in Ukraine has also caused supply chain issues for European car manufacturers. So, Australian car buyers struggling to get a new vehicle have turned to used models in the meantime.

Also, Australians were less comfortable taking public transport during the pandemic, opting for their car instead. And with most interstate or overseas flights restricted, more people turned to a road trip for a holiday, further spiking the demand for used vehicles.

So, if the price of used vehicles is higher than normal, how can you ensure your purchase is still affordable? It may be worth considering prioritising a lower-rate or lower-fee car loan.

It’s still important that you borrow what you can afford and don’t exceed your budget. However, the interest charged on a car loan is a significant factor in the total cost of the loan, so choosing a more competitive option could soften the blow of higher prices.

How do you find competitive car loans that suit your needs and budget? That’s where RateCity can lend a helping hand.

RateCity has done some of the hard work for you by ranking used car loans on the Car Loan Leaderboard using our Real Time Ratings™ system. This gives loan products a score out of five, based on cost and flexibility.

And unlike other ratings systems that rank their products once or twice a year, our Real Time Ratings™ system ranks products live as you use the site. This makes it as up to date as possible, helping you to narrow down your shortlist of used car loan options.

(Rankings are correct at the time of publishing. Please note lenders may trade places on the list as interest rates and fees change and RateCity’s tracker reflects these movements.)

Top-ranking used car loans

The top-rated car loans today for those borrowing to buy a used vehicle two years and older. Assumes a secured $20,000 loan on a 36-month loan term.

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