Compare car loans in Perth and WA

Whether you’d like to take a trip to Fremantle, head to Cottesloe Beach or embark on a tour of some of Perth’s finest museums, this is a city that’s easy to get around. Swan Valley Tourist Drive (203) is just one of several routes favoured by visitors keen to take in as many of the popular sights as possible.

If you’re in the market for your first or next car, it may be worth considering taking out a car loan to get you on the road faster. Whether you want a car, a caravan or motorcycle, you should be able to find a loan deal that suits.

Getting a car loan in Perth is as simple as obtaining it elsewhere in Australia, in that you need to meet a lender’s eligibility criteria and apply online or even at a car dealership.

There are a range of Western Australia-based car loan lenders, including Commonwealth Bank subsidiary: BankWest. However, you are not limited to applying to lenders based in Perth, and can apply to national lenders, online lenders, credit unions and other car financing options if you meet the criteria.

Choosing to take out a car loan is one of the most popular ways you can finance your Perth vehicle. However, it’s still crucial you weigh up the pros and cons of taking out a car loan and assess them against your financial situation and budget.

Benefits of a car loan in WA

• Explore WA. Western Australia is the largest state in the country, and one of the best ways to see it is via car. By taking out a car loan to finance your vehicle, you’re able to hit the road and explore.
• Vehicle access. You gain access to a vehicle you otherwise would not have been able to afford. This can be essential if you use your car for business purposes.
• Affordable repayments. The car is repaid over time (also called the loan term), so you’re not expected to fork over a lump sum up front.

Risks of a car loan in WA

• Security. Car loans are almost always secured against the vehicle. If you default on the car loan the lender has the right to seize the vehicle.
• Borrowing capacity. The amount you may borrow is limited to your borrowing capacity and creditworthiness. this means you may not be approved for an amount that pays for your dream car, compared to if you saved up for it instead.
• Car insurance costs. There are a range of natural disasters that may impact your vehicle over a year in Western Australia, including cyclones, earthquakes, bushfires, and severe storms. You may need to consider the extra cost of insurances for these events when purchasing your car.

Comparing your car loan options is one of the best ways to ensure you’re choosing the right car loan for your financial needs and situation. RateCity provides a range of tools that may help you in your comparison journey, including:

Comparison tables

Comparison tables allow you to filter down and view car loan options in the market based on your specific requirements. You can specify the car loan size, repayment term, interest rate type and even smaller details like whether you are a 457 Visa Holder. Comparison tables are a way to compare apples with apples, as you can see how each loan stacks up to one another.

Car loan calculators

Calculators, such as the Borrowing Power Calculator and the Repayment Calculator, may also be helpful tools in your search for your best car loan. A Borrowing Power Calculator may help you analyse how much you can afford to borrow with a car loan based on what you could afford to repay within your current budget; before you ever apply for pre-approval. Next, a Repayment Calculator may show you what the estimated repayments are for different car loan options, helping you to cut down your short list.

Real Time Ratings^TM

Real Time Ratings^TM is another comparison tool that helps you narrow down your short list of car loan options. It is RateCity’s world-first rating system that ranks car loans based on your individual requirements. Each car loan is given a score out of five, based on loan costs and flexibility.

The car loan interest rate you may be offered will depend on a few key factors, including whether the loan is secured, what rate type it is and your credit rating.

Firstly, a secured car loan is typically much more affordable than an unsecured car loan, on average. If you’re looking to find a cheap car loan option, securing your vehicle to the loan may result in a lower interest rate. This is because there is generally less risk placed on the lender that you may default if you might lose your car if you miss your repayments.

The type of interest rate you choose may affect the car loan rate as well. Fixed rate car loans may allow you to lock in an interest rate for the loan term, protecting your repayments from any potential rate fluctuations. A variable rate car loan is subject to market fluctuations, but if interest rates decrease, so too does your car loan repayments. Generally speaking, most car loans are fixed, but you can choose to shop around for a variable rate option.

Further, your credit score and credit history will also affect the interest rate you may be offered. Lenders will look at several factors when determining whether to approve you for a loan, including your credit history. Borrowers with good to excellent credit scores typically have a higher chance of loan approval. And the higher your credit score, the less risky you may appear to a lender, meaning they may offer you a lower interest rate than a car buyer with a bad credit score.  

There is more to a car loan than the advertised interest rate. It’s worth comparing a range of factors, including:

1. Comparison rates. Comparison rates may show a “truer” cost of the loan, as they factor in the advertised car loan rate, as well as most fees, based on a 5-year, $30,000 car loan.
2. Fees. Speaking of fees, a lender may charge you a multitude of car loan fees that can increase the total cost, including loan application fees, ongoing fees, and late payment fees.
3. Features. Some car loans come with helpful features, such as the ability to make extra repayments and a redraw facility. These features will generally come with a higher-rate car loan than a more basic option, so keep this in mind.
4. Loan term. A short car loan term (1-3 years) may result in higher monthly repayments, but less interest charged overall compared to a long term car loan (4-7 years), which may have lower monthly repayments as your payments are more spread out, but higher interest charges over the life of the loan.
5. Loan type. As mentioned above, a car loan may either be secured, with the vehicle used as collateral, or unsecured. A secured loan may result in your vehicle being seized if you default on repayments, but generally comes with lower interest rates on average than an unsecured loan.
6. Vehicle age. The age of the vehicle will also come into play. A new car loan refers to vehicles often less than a year or two old. A new vehicle may be more expensive in total, but new car loans on average come with lower interest rates. A used car loan may help you purchase a car older than two years, but some lenders cap the age at 10-12 years old by the end of your car loan term. Used cars may be more affordable, but used vehicle loans may come with higher interest rates on average.

If you’re considering alternative ways to finance your next vehicle purchase, you could consider a home equity loan if you have an existing mortgage. If you are approved, you may be able to draw down on some of the equity you’ve built up in your home loan over the years to pay for the car.

If you’re looking for further assistance in getting car financing in Perth, it may be worth speaking to a local expert. This may mean reaching out to a car finance broker, who may be able to offer local knowledge and expertise about your financial situation. This may be particularly useful if you are self-employed or are not an Australian citizen or permanent resident.