Types of Car & Vehicle Loans Available1. Car Loans
Car loans are the most common form of vehicle finance and are typically used to purchase new or used cars.
2. Motorcycle Loans
Tailored for two-wheel enthusiasts, motorcycle loans work similarly to car loans but may involve higher interest rates depending on the lender.
3. Caravan Loans
For those dreaming of road trips and holiday freedom, caravan loans help you finance motorhomes or trailers.
4. EV Finance (Electric Vehicle Loans)
Many lenders now offer green car loans with better rates or incentives for environmentally friendly vehicles, like hybrids and electric cars.
Lower interest rate
Your car acts as collateral
Ideal for new cars or late model used vehicles
No asset security required
Higher interest rate
Often used for older or second-hand cars
Employee + employer agreement
Pre-tax payments (can reduce taxable income)
Popular with company car seekers
For individuals using the car privately
Fixed or variable interest options
For vehicles used for business purposes
Tax-deductible interest & depreciation (consult your accountant)
May include chattel mortgage or commercial hire purchase options
🚘 Lower Interest Rates: Since the lender holds your car as collateral, interest rates are typically lower compared to unsecured loans. Great if you’re buying a newer vehicle or want to keep repayments affordable. Lower risk for lenders = lower interest rate.
🧾 Flexible Loan Terms: Loan terms can range from 1 to 7 years, depending on your vehicle’s age and the lender. Some lenders even offer balloon options to reduce repayments.
⚡ Faster Approval Process: With no need for the lender to assess the vehicle, unsecured loans can be approved more quickly—ideal if you’re buying from a private seller or need funds fast. Higher risk = higher interest rate.
🚙 No Restrictions on Vehicle Type or Age: Perfect for buying older vehicles, private sales, or even when the car isn’t eligible as security (e.g., vintage cars, modified vehicles).
A novated lease is a three-way agreement between you, your employer, and a finance company that lets you lease a car using your pre-tax salary. It’s a popular option for employees looking to save on tax while driving a new or used vehicle. Your employer makes the repayments directly from your salary, and it can include running costs like fuel, servicing, and insurance—all bundled into one easy payment.
A chattel mortgage is a popular vehicle finance option for businesses and self-employed individuals. Under this arrangement, the lender provides funds to purchase a vehicle used primarily for business purposes, and you take ownership from day one. The lender uses the vehicle as security (the “chattel”) until the loan is repaid. Chattel mortgages often offer flexible terms, lower interest rates, and potential GST, depreciation, and interest deductions—making them a tax-effective choice. Always check with your accountant to ensure it suits your business structure and cash flow.
Both are eligible for finance—but the loan terms, interest rates, and approval conditions vary.
New cars = better rates, longer loan terms (up to 7 years)
Used cars = higher rates, shorter terms, stricter vehicle age conditions
Some lenders offer flexible repayments or early payout options, so it’s worth asking about these features.
A balloon payment is a lump sum due at the end of your loan term. It lowers your monthly repayments during the loan, but you’ll need to pay (or refinance) the balloon at the end.
Example:
You borrow $30,000 for a car over 5 years with a $10,000 balloon. You’ll make lower repayments on the $20,000 during the term and pay the remaining $10,000 at the end.
✅ Great if you plan to upgrade the car in a few years
✅ Pros: Lower monthly repayments
⚠️ Risky if you’re not planning ahead
⚠️ Cons: You’ll need to pay or refinance the balloon at the end
Chat with Anitha – Understand your needs (business, personal, tax strategy)
Compare Lenders – We shop 60+ lenders for the best deal
Pre-Approval – Know your budget before you hit the dealership
Loan Submission – We handle all the paperwork
Settlement & Drive Away – The funds go to the seller, and you get the keys!
Lenders look at:
Your income and expenses
Credit history
Age and condition of the vehicle
Loan amount vs car value (Loan-to-Value Ratio)
Whether it’s personal or business use
Kanova loans Tip: “Some lenders won’t finance cars over 10 years old—others will, but at higher rates. I match you to the right lender from the start.”
Typically:
New cars: Up to 7 years
Used cars: 1–5 years depending on car age
Balloon option: Often used on 3–5 year terms
Taking out a vehicle loan before buying a home can reduce your borrowing capacity for a mortgage.
Lenders assess your existing debts when calculating your serviceability.
💡 Tips if you’re planning to buy a home:
Consider delaying your vehicle purchase
Or speak to a mortgage broker about loan consolidation — it may be possible to roll your car loan into your future home loan
If you’re using your vehicle for work or business:
You may be eligible for commercial vehicle loans
Tax deductions may apply for interest and depreciation (check with your accountant)
Consider chattel mortgage or leasing options for business finance
✔ Loan Comparison: Compare interest rates, comparison rates, fees, and balloon terms
✔ Pre-Approval: Helps you know your budget before car shopping
✔ Credit Score: Better scores = better rates
✔ Total Cost of Ownership: Think fuel, insurance, rego, and maintenance
✔ Early Payout Options: Can you make extra repayments without penalty?
Don’t miss repayments — it can hurt your credit score
Keep insurance current — especially with secured loans
Review your loan annually — refinancing might save you money
Big Four Banks (CBA, NAB, ANZ, Westpac):
✅ More secure and reputable
✅ Offer bundled discounts (e.g., with your home loan)
❌ Often stricter approval criteria
❌ Can be slower processing
Private or Specialist Lenders:
✅ More flexible approval
✅ Faster turnaround
✅ Tailored options (e.g. low-doc loans, EVs, caravans)
❌ Slightly higher interest rates in some cases
Before signing, always check:
Total loan cost over time
Fees and early payout penalties
Dealer financing traps (they often mark up interest rates!)
Whether you’re eligible for a tax deduction (ask your accountant)
Whether you’re buying your first car, upgrading, or expanding your business fleet, or financing a work vehicle, Kanova Loans is here to guide you every step of the way.
📍Serving clients across Oran Park, Camden, and Greater Sydney
Let’s find the right vehicle loan for you — without impacting your long-term financial goals.»
Disclaimer: This blog is for general information only and doesn’t constitute personal financial advice. Speak to a licensed advisor or broker for guidance specific to your situation.
© Kanova Financials PTY Ltd
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Kanova Loans helps Australians access home, car, and commercial finance through expert guidance and top lender comparisons — led by trusted senior mortgage broker Anitha Varghese.
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