Purchasing a new or used auto is a big decision, one involving a lot of time, test driving, and consideration of your financial situation. Finding affordable car loans and car finance options are important to ensure you are awarded a low interest rate.

1. Car Loans and Financing in Sydney, Melbourne and Surrounding Areas
Purchasing a new or used auto is a big decision, one involving a lot of time, test driving, and
consideration of your financial situation. Finding affordable car loans and car finance options are
important to ensure you are awarded a low interest rate. Other considerations include passing a
credit check regardless of bad credit history, or having no credit for a lender to go off of.
For car buyers in Sydney, Melbourne and other areas across Australia, cheap auto loans are just
as important as they car they’re going to purchase. When starting your search for the perfect
vehicle, it’s important to know the financing options you’ll have available before you approach the
dealer to ensure you get the best value for your money during purchase of new cars or looking for
a used model.
Loan Categories
The first step to searching for cheap car loans is to determine which type of financing is
appropriate for your financial situation. There are two main types of car loans and each function in
a different manner.
Unsecured Loan
Unsecured loans are those that use nothing but the borrower’s credit as collateral. Examples of this
would be a signature or personal loan from a bank, or purchasing a car on a credit card.
Oftentimes, these types of loans will limit the type of vehicle one can buy as they’re not able to
get as much funding for a new vehicle over a used. While no repossession can take place, using a
credit card to purchase a vehicle or securing a personal loan can still be risky. Failure to repay will
cause credit damage, and make it that much harder to secure a loan in the future when you’re
working with bad credit.

2. Secured Loans
A secured loan is a loan that is granted with an asset in your possession as security for repayment
of the financing. Many types of car loans granted from banks and other financers are secured, and
as such offer lower interest rates than with unsecured options.
When completing an application for a secure loan, a promissory note will spell out the type of
asset (usually the car) that is being used as collateral for granting the loan. If the loan cannot be
paid consistently on time, or the loan holder falls behind on payments the collateral specified in
the promissory note can be repossessed by the bank. Typically, if repossession happens, the lender
will sell the vehicle or other collator to the highest bidder at an auction. If a balance remains after
the sale, that balance still belongs to the name of the party on the loan and the amount can be
submitted to collection if left unpaid. This can be very damaging to your credit history, and can
make it difficult to get loans on other items (such as a house or another auto) later on.
As mentioned above, a majority of the loans taken out for new cars are secured loans, and there
are plenty of places that offer them. Some have different benefits than others, and you should be
aware of those benefits to determine which type of car finance option would be right for you.
Lenders and Sources for Car Loans
Secured loans are offered usually through a financial institution of sorts, though many used and
new auto dealers work with lenders to provide low interest loans to those with bad credit, or
instant approval with a quick credit check. Below are the primary resources for auto loans around
Sydney, Melbourne and other areas in Australia.

3. Standard Car Finance Loan
Often granted through a bank, credit union, or similar institution, the financer lends a buyer the
money to purchase their new or used auto. These loans are simple and easy to understand for first-
time buyers, but do require a credit check prior to approval. The positive features of these loans
are:
• Ability to add in on-road repair costs into the loan
• Set monthly payments for the term of the loan
• Variable or fixed low interest rates secured against the value of the car
• Flexible repayment times available to make borrowing easier and the monthly payment
cheap
Some banks or credit unions will offer unsecured loans to existing customers, but they often come
at a higher interest rate. New Cars and used cars purchased with a standard loan are required to be
fully insured until the balance is paid off.
Financed Lease
In this type of loan, the financer purchase the vehicle then leases it to the driver. They can use the
car immediately with little or no capital involved. Many leases are available to business owners
where the car will be used to perform business transactions. Positive features of this style of loan
are:
• Repayments can be tax deductible depending on business usage
• Fixed low interest rates as the financing is secured against the vehicle value
• Immediate use of the car with now down payment required.
Those who lease vehicles are responsible for monthly payments and any maintenance or repairs
the car would require. At the end of the period, the driver has the option to return the car, refinance
for another lease, or buy the car for the amount left under the financing contract.

4. There are other types of lease options which are similar to a financed lease that buyers can take
advantage of depending on their needs.
• Novated Lease - a lease involving wage reduction for an employee who has leased a car
directly from a financer. The employer is obligated to pay the lease out of the employees’
wages. This agreement can appeal to those who require a car for business purposes.
• Operating Lease – a financer purchase vehicle and rents it to the motorist for a set period
of time. The motorist is not responsible for repairs or risks associated with the car, and at
the end of the term they can continue to rent the car or change to a newer model.
Choosing Your Loan
Discussing your individual finance situation with a lender is often the best way to determine
which loan option is right for you. Many banks and lenders have access to a car loans calculator
to provide customers with an estimated interest rate for their purchase. Depending on how soon
you need the vehicle, sometimes talking directly with a dealer is the best option as often you can
walk of the lot the same day with a new or used car and begin driving right away.
For assistance with car loans on new cars or used vehicle purchases in Sydney, Melbourne, and
the surrounding areas contact Need Finance to discuss options with one of our certified financing
professionals. We offer low interest rates, quick credit check, and support for those with bad
credit history in obtaining a loan for new cars or used autos. Contact us today to begin the search
for your new vehicle!