Used
Car Loans

What used cars can I finance?

Before we get to the types of used cars available on the market, all vehicles must meet a set of eligibility criteria before they can qualify for a loan. The main factors you’ll need to look out for when choosing your car are:

• Vehicle age: lenders will usually enforce an age limit on cars, which is often between ten and 15 years old by the end of the loan term. However, some extend this to 20, while others don’t have a set age limit at all.
• Write-off history: many lenders will require that a car mustn’t have been written off previously. This isn’t always the case, though, as repairable write-offs can be financed through certain lenders.
• Car value: even if your car passes all the checks, you can’t generally borrow more than its overall value. There are certain situations where you may be able to do this, such as covering on-road costs like insurance, registration and stamp duty.

The types of used car

There are three main categories when it comes to used cars on the market. These are:

Demo cars

Demonstrator (or ex-demonstrator) models, commonly referred to as demo models, are usually display or test drive vehicles at dealerships. They’ll often have a few hundred to a few thousand kilometres on the odometer, meaning they aren’t brand new but are newer than other used cars.

Because of the low mileage, you can pick one up for less than a brand-new model, making them an attractive option if you want something near-new without paying full price. That said, demo cars are usually the priciest of the used options.

Used cars from a dealership

Buying from a used car dealership includes a warranty, covering mechanical issues for a set period (usually three months). This adds peace of mind, as the vehicle is likely to be inspected and maintained. A thorough independent check is still wise before committing to the purchase.

You can also trade in your current car to reduce the purchase cost and remove the headache of selling your vehicle. However, prices through a dealership are usually less negotiable due to dealer margins, and you may encounter unnecessary upselling from sales staff.

Used cars from a private sale

The number one benefit of buying privately is the cost of the car. Without any overheads or sales targets to meet, a private vendor can choose to sell their car at whatever price they like. This could mean major savings for you and a smaller loan as a result. 

What it doesn’t give you is much protection. If you bought a lemon, you’d likely be stuck with it. Because of this, it’s especially important to conduct vehicle history and finance checks and get the car independently inspected before any money changes hands.

It’s also worth noting that while making contact with the seller and agreeing on a price might be easier, the admin involved in selling a car is up to the two of you to sort out. When you buy through a dealership, a salesperson will be able to do this for you.

Buying a used car: dealership vs private seller

Used car loan interest rates

As of August 2025, the best used car loan interest rates available through Savvy’s lending partners are:

As you can see, rates change based on the age of your car, as well as a range of other factors. This includes whether you’re a property owner, your credit score, the type of car you buy, whether you buy from a used car dealership or private seller and more.

Although you can see the minor differences on offer from certain lenders, you should always unpack what that might mean for your car loan. We’ve taken a look at three example lenders to see how minor differences in interest rate can impact your repayments:

In the above example, a difference of just 0.75% p.a. between Lenders A and D adds up to more than $525 in interest. That’s why it’s so important to compare rates before you formally apply, which your Savvy broker will do for you when you go through the process with us.

What’s the minimum loan size for a used car?

When it comes to car loans through Savvy, the smallest available loan size is $5,000. Lenders won’t consider any amount less than this to be financially viable and therefore won’t approve such applications. If you’re after an amount under $5,000 and don’t have any cash, you may have to consider using a credit card or payday loan.

You might only need a small car loan if your deposit is 50% or more of the purchase price, or if you’ve found a great deal through a private seller. The smaller your loan, the less you’ll pay in interest over the life of the agreement.

How much do people borrow for used cars?

How to apply for your car loan with Savvy

Whether you’re just having a poke around at a few dealerships to see what’s available or you’ve locked in your sale price with an online vendor, Savvy is here to help you finalise your used car purchase. Here’s our process:

1. Apply online

   Fill out our quick web form.

2. Submit documents

   Verify your income, employment and more.

3. Chat to your broker

   Discuss the options available over the phone.

4. Track down your used car

   Through our in-house car broker.

5. Have your application prepared

   Your broker submits your form for approval.

6. Signed, sealed, delivered

   Get approved and have your loan settled.

Get a free quote

What is a good rate on a used car loan?

As mentioned, the lowest rate available for a used car loan through Savvy is 6.48% p.a. (7.74% p.a. comparison) as of August 2025, based on a $30,000, five-year loan for a two-year-old car. The average rate for used car finance was 10.45% p.a. for customers who financed cars five years old or less and had an average or better credit rating. However, if this is stretched out to include cars up to ten years old, that rate creeps out to 13.23% p.a.

Because everyone’s profile is different, though, a good rate for one person might not be great for another. You can speak with your Savvy broker about your loan options and what the best rates on offer for your profile are.

Used car buying tips

• Always ask questions

  When it comes to used cars, the more questions you ask, the better. If you’re buying from a private seller, finding out why they’re selling the car could potentially help you expose a lemon before you get further down the track. Asking questions can also help you find out if a seller is being dishonest when further checks are completed later.

• Test drive before you buy

  You should always take the car for a spin before you agree to anything, whether you’re buying from a dealer or private seller. Not only will it give you a feel for the car and if it’s a nice drive, but it may also expose potential issues. Listen out for knocking sounds or any issues with the handling of the vehicle. Starting it cold will give a better indication of these issues.

• Conduct checks yourself

  Before you get a professional inspection, run your eye over the car yourself. This is especially valuable if you know a thing or two about cars. Look for scratches and dings on the outside, check what sort of condition the tyres are in and pop the bonnet to look for any evidence of leaks or dirt. Dealership sales are usually well-maintained, but there are no guarantees.

• A professional inspection is worth it

  Regardless of where you’re buying your used car from, getting a professional to inspect it will give you peace of mind that you aren’t saddling yourself with a ticking time bomb. It’s especially important to do so if you’re buying from a private seller and they’re unable to produce documents confirming the car’s servicing and repair history.

Are new car loans cheaper than used car loans?

In most cases, car loans for brand-new vehicles come with lower interest rates than used car finance but are more expensive to purchase. Some vehicles go up in value over time, but this isn’t the case for most.

However, just because a new car loan costs more doesn’t mean it’ll be more expensive to finance. The following table shows the difference in overall cost between loans for popular vehicle models from the hatch, sedan, SUV, ute and luxury segments:

Most popular cars in Australia: new vs used

MG ZS Excite 2WD

Year	Price	Interest rate	Monthly repayment	Overall interest
2023	$17,990	6.48% p.a.	$352	$3,120
2026	$22,990	5.50% p.a.	$440	$3,359

2023 2026

$17,990 $22,990

6.48% p.a. 5.50% p.a.

$352 $440

$3,120 $3,359

Toyota Corolla Sedan ZR HEV

Year	Price	Interest rate	Monthly repayment	Overall interest
2023	$38,990	6.48% p.a.	$763	$6,762
2026	$40,260	5.50% p.a.	$770	$5,881

2023 2026

$38,990 $40,260

6.48% p.a. 5.50% p.a.

$763 $770

$6,762 $5,881

Toyota RAV4 Edge AWD Hybrid

Year	Price	Interest rate	Monthly repayment	Overall interest
2023	$55,000	6.48% p.a.	$1,076	$9,538
2026	$58,360	5.50% p.a.	$1,115	$8,525

2023 2026

$55,000 $58,360

6.48% p.a. 5.50% p.a.

$1,076 $1,115

$9,538 $8,525

Ford Ranger Raptor 3.0 4X4

Year	Price	Interest rate	Monthly repayment	Overall interest
2023.5	$79,990	6.48% p.a.	$1,565	$13,871
2026	$90,690	5.50% p.a.	$1,733	$13,248

2023.5 2026

$79,990 $90,690

6.48% p.a. 5.50% p.a.

$1,565 $1,733

$13,871 $13,248

Mercedes-Benz EQE 350 4MATIC Sedan

Year	Price	Interest rate	Monthly repayment	Overall interest
2023	$99,000	6.48% p.a.	$1,937	$17,168
2026	$155,400	5.50% p.a.	$2,969	$22,700

2023 2026

$99,000 $155,400

6.48% p.a. 5.50% p.a.

$1,937 $2,969

$17,168 $22,700

Calculations are for illustrative purposes only and do not include other car-buying costs. Model costs obtained through CarsGuide. Used car costs are examples based on listings obtained from carsales from August 2025. All figures are rounded up to the nearest dollar. Interest rates are reflective of the minimum available rate for each car age as of August 2025. The rate you receive on your car loan may be different to the rates listed above.

The hidden cost trap with used car loans

"Because older cars are more likely to break down or depreciate rapidly, rates tend to be higher. This can create a hidden cost trap. That “bargain” older car might seem affordable upfront, but higher interest over the loan term can add thousands to the total cost. That’s why you should always factor financing costs into your vehicle selection. Sometimes, paying more for a newer car with better financing terms results in lower overall costs."

Phil Goedecke, Savvy Car Loans Expert

Phil Goedecke

Savvy Car Loans Expert

What are the best used cars to buy?

Like interest rates, the best car for one person will be different from the next. That makes it impossible to declare one car as the best over the others without some pretty clear parameters. Here are the most popular used car makes and models financed through Savvy across the 2024-25 financial year:

According to AADA’s Mid-Year Automotive Insights Report 2025, the most popular used car models sold in Australia as of the end of June are:

Another way to consider which car manufacturer is best when it comes to used cars is by looking at recall statistics. Recalls are common and can range from very minor tweaks at a mechanic to significant structural issues. The following tables show the vehicle makes that have been most impacted by recalls across 2023 and 2024:

Total number of vehicles impacted by recalls: 2023-24

Total number of vehicle recalls issued: 2023-24

You can search for different vehicles, including the one you might be looking at from a private seller, to see if they’re impacted by a recall.