🚗 Car Finance Calculator
Calculate your monthly car loan repayments with or without a balloon payment. See total interest and the true cost of your finance.
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A balloon payment reduces monthly repayments but you must pay this lump sum at the end of the loan.
Car finance in Australia — what to watch out for
Australians love cars. With limited public transport outside major cities and vast distances between them, a car is often a necessity rather than a luxury. But car finance can be expensive if you don't understand the terms.
The key number to watch is the comparison rate, not just the advertised interest rate. The comparison rate includes most fees and better reflects the true cost of the loan. Under Australian law, lenders must display the comparison rate alongside the headline rate.
- Secured vs unsecured: Most car loans are secured against the vehicle. Lower rates but the lender can repossess the car if you default.
- Balloon payment: A lump sum due at the end of the loan term. Reduces monthly repayments but means you pay more total interest and must either pay the balloon or refinance.
- Dealer finance: Often convenient but not always the cheapest. Getting pre-approved from a bank or credit union gives you negotiating power.
- Novated leasing: A popular option for employees — pre-tax salary is used to cover vehicle costs, potentially saving on income tax. Requires employer participation.
🦘 Fun fact: Australians are among the world's most car-dependent populations. The average Australian drives around 13,000 km per year. Darwin residents drive the most; inner Sydney and Melbourne residents the least. Unsurprisingly, the cities with the best public transport also have the lowest per-capita car ownership.