Used Car Loans: Rates, Age Limits & Private Sales

A used car loan is finance to buy a second-hand car, often secured against the car itself. Through Emu Money's panel of 50+ lenders, used car loan rates start from 5.8% p.a. (comparison rate 7.03% p.a.*). The rate you're offered depends on the car's age, the loan term, who you buy from and your credit history.

Used car loan rates in 2026

Our used car loan rates start from 5.8% p.a. (comparison rate 7.03% p.a.*), while new car rates on our panel start from 5.67% p.a. The rate you're offered depends on your credit profile and the car, and on which lender you use.

ASIC's June 2026 review of car loans covered eight lenders and, as Moneysmart reports, data from more than 350,000 loans. It found the median interest rate varied widely between them:

ASIC put the spread down to each lender's market segment, appetite for risk and mix of new and used cars. For you, it's a reason to compare: Moneysmart notes that shopping around for a car loan could save you thousands in fees and interest.

What a used car loan costs each month

Here are monthly repayments at our starting used car rate of 5.8% p.a., alongside 10%, the lowest median rate among the lenders ASIC reviewed. Figures exclude fees.

On a $30,000 loan over 5 years, the gap between those two rates is about $3,613 in interest. To run your own numbers, use our car loan calculator.

How old can the car be?

Most of the eight lenders ASIC reviewed limited secured car loans to cars no older than 15 years when the loan finishes, and a few went as far as 25 years.

That means the loan term and the car's age work together. A 9-year-old car on a 7-year loan would be 16 at the end, past a 15-year limit, while the same car on a 5-year loan would finish at 14. If you're looking at an older car, a shorter term keeps it inside the limit, and a deposit reduces how much you borrow against it.

A few lenders in ASIC's review also financed grey imports and repairable write-offs, but most didn't. If the car you're considering is either, check it's acceptable before you pay a deposit to the seller.

Buying from a dealer, a private seller or at auction

From a dealer

A licensed dealer gives you the most protection. In NSW, Victoria, Queensland and WA, an eligible car comes with a statutory warranty, and the Australian Consumer Law guarantees apply on top; our guide to used car warranty rights sets out the details for NSW, Victoria, Queensland and WA.

Finance arranged at the dealership can add protection too. ASIC notes that where the lender is a linked credit provider, the dealer and the lender may be equally liable if you suffer a loss because of a misrepresentation or a breach of contract in the sale. Dealer finance can also carry extra costs: Moneysmart lists dealership or introducer fees among the one-off fees to ask about.

From a private seller

Not every lender finances private sales. Of the eight lenders in ASIC's review, four offered loans for them, and one charged a higher establishment fee for them: $600, against $499 for a dealership sale.

With a private sale, the lender needs to be sure the car is worth what you're paying and is free of other finance. A PPSR search shows whether a security interest is recorded against the car, which means it could have money owing on it; the search costs $2 online and needs the VIN or chassis number. You also give up the dealer protections: a private sale carries neither the statutory warranty nor the consumer guarantees, as our guide to used car warranty rights explains.

At auction

Auction purchases need a lender that will fund them, and the timing can be tight because auction terms may require payment soon after the sale. Get finance approved, and confirm the lender will fund an auction purchase, before you bid.

Secured or unsecured?

A secured car loan uses the car as security: if you don't keep up the repayments, the lender can take the car and sell it. An unsecured loan doesn't, so the lender can't repossess the car, but Moneysmart notes the interest rate is often higher. For a used car, secured finance is often cheaper as long as the car is within the lender's age and value limits. Once it's too old for secured finance, an unsecured loan may be the option. Our guide to secured vs unsecured car loans compares the two.

Balloon payments on a used car

A balloon, or residual, is a lump sum left owing at the end of the loan. It lowers the regular repayments, but Moneysmart points out that you repay the lump sum with interest, so the total cost is generally higher.

On a $30,000 loan over 5 years at 5.8% p.a., a 30% balloon of $9,000 cuts the repayment from $577 to $448 a month but adds about $1,220 in interest, with $9,000 still to pay at the end.

Balloons have limits too. Most lenders in ASIC's review offered them on a sliding scale, where the newer the car and the shorter the term, the larger the balloon allowed; two didn't offer balloons at all. Before choosing one, be confident you can pay it when it falls due, by saving, selling the car or refinancing.

Don't borrow more than the car is worth

ASIC found that the price of cars bought with finance was often significantly higher than the lender's verified book value. That matters if the car is ever sold to clear the loan: among repossessed cars where four of the lenders gave ASIC the balance after sale, nearly 90% of borrowers still owed more than half the original loan.

Before you buy, check what the car is really worth, not just what the seller is asking, and consider a deposit if you're paying close to or above its value. Our free used car buying checklist scores a car on 20 inspection points and estimates its 3-year cost of ownership. If you're weighing up no deposit, see no deposit car finance.

Fees to check before you sign

The interest rate is one part of the cost. Moneysmart lists the common car loan fees as an establishment fee, a broker fee, a dealership or introducer fee, and other fees such as a monthly service fee, a default or missed-payment fee, and default interest.

Establishment fees at the eight lenders in ASIC's review ranged from $299 to $995, and one lender added a separate provider fee on top. The lender must give you a comparison rate, which combines the interest rate and fees in one figure. Compare comparison rates for the same loan amount and term.

How to get a used car loan

1. Set your budget and get pre-approved. Pre-approval tells you what you can spend before you negotiate; our guide to car loan pre-approval covers how it works and how long it lasts.
2. Check the car. Use the used car buying checklist, run the PPSR search, and before you pay, work through the final checks before buying a used car.
3. Confirm the car suits the lender. Its age at the end of the term, whether it's a private or auction sale, and its value against the loan amount.
4. Apply. You'll need ID, proof of income, your expenses and details of the car.
5. Settle. Once approved, the lender pays the dealer or seller and, for a secured loan, records its security interest against the car.

Still deciding between new and used? Our guide to new vs used car finance compares the two, and the car loans page covers the types of car finance we arrange.

*Comparison rate based on a $30,000 secured loan over 5 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

This article is general information only and is not financial advice. Rates are subject to change and to lender approval, terms and conditions.