What is a consumer car loan?
A consumer car loan is the everyday way to borrow for a car you’ll use mainly for yourself or your household. It is the most protected kind of car finance in Australia, and the simplest.
How it works
You borrow the price of the car (less any deposit or trade-in), and repay it over a set term, usually between one and seven years, at a fixed rate. Most car loans are secured: the lender holds the car as security until the loan is paid, which is why secured rates are lower than unsecured personal loans.
Some loans let you add a balloon, a lump sum due at the end, which lowers the regular repayments but leaves money owing. Without one, the car is yours outright when the last payment is made.
The protections you get
Because it is consumer credit, the National Consumer Credit Protection laws apply:
- Responsible lending: the lender and any broker must make reasonable inquiries about your situation and assess that the loan is not unsuitable.
- A comparison rate alongside any advertised rate, so fees are counted.
- Clear disclosure of the costs before you sign.
- The right to ask for a hardship variation if you hit trouble.
- Access to the Australian Financial Complaints Authority (AFCA) if a complaint isn’t resolved.
What lenders check
Your identity, income, regular expenses and existing debts, and your credit file. At Navo much of this comes straight from your bank data with your consent, rather than from paperwork.
When it suits
A consumer loan suits most people buying a car for themselves, especially when there’s no salary packaging at work, the job may change, or you want to own the car with nothing owing. If your employer packages and the car is electric, compare a novated lease too.
Worked examples
Open an example in the Navo engine, add your own income, and see the figures for every way to pay.
A first car for a new job
No salary packaging, a used small car, owning it outright.
A family SUV with a trade-in
No packaging at work, a new hybrid SUV, the old car traded in.
Questions
What is the difference between a car loan and a personal loan?
A car loan is usually secured by the car, so the rate is lower. A personal loan is usually unsecured and can be used for anything, at a higher rate.
What is a comparison rate?
A single rate that includes the interest rate and most fees, worked out on a standard example, so loans can be compared. Your own cost depends on the amount and term.
Can I pay off a car loan early?
Usually, though some fixed-rate loans charge an early payout fee. Check before you sign.
Does applying affect my credit file?
A formal application records a credit enquiry on your file. Navo shows your options first with no credit check; the check only happens when you apply.
Reviewed 7 October 2026. General information only. Subject to credit assessment and lender criteria.