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Can I get a car loan for a used car?

In short, yes. It’s definitely possible to get a car loan for a used car. In fact, it’s incredibly common. To help give you a clearer idea of your used car loan options here in Australia, we’ve rounded up what you need to know before you head down to the dealership or chat with a private seller.

What is a used car loan?

Let’s start with the basics. A used car loan is money borrowed by an individual to buy a second-hand vehicle no surprises there

You borrow a fixed amount from a lender, then repay it in regular instalments, plus interest, across the term of your loan. Your loan will be repaid in full at the end of your loan term if you keep up with your repayment schedule. 

There are two types of loans that can be put towards buying used cars:

  • Secured car loans

  • Unsecured car loans

Depending on the car you want to purchase and your financial situation, you may find that one loan type is more suitable than the other. 

So, what’s the difference? Let’s get into it.

Secured car loans vs unsecured car loans

In the battle of secured car loans vs unsecured car loans, the one that’s right for you will come down to your finances and the car you’re hoping to buy. 

Secured car loans: The car you’re purchasing acts as security for the loan. If you fail to make the repayments, the lender has the right to repossess the car. Secured car loans often have lower interest rates because the lender is taking on less risk.

  • Loan is secured against your car

  • Wisr offers secured car loans from $10,000 up to $147,000

  • Wisr offers loan terms of 3, 5 or 7 years 

  • Interest rates can be lower than with unsecured loans

  • Usually restrictions on the age of the car

Unsecured car loans: These loans don’t require the car as collateral. As they’re riskier for the lender, they tend to have higher interest rates. However, unsecured loans provide more flexibility, as there are less restrictions with the age of the vehicle and selling the car before you’ve fully repaid your loan.

  • Loan is not secured against your car

  • Wisr offers unsecured car loans from $5,000 up to $62,000

  • Wisr offers loan terms of 3, 5 or 7 years 

  • Interest rates can be higher than with secured loans

  • No restrictions on the age of the car

What to think about before applying for a used car loan

Here’s what to keep in mind before applying for a car loan for used cars:

1. Age of the car

Lenders may have restrictions on the maximum age of the car you're purchasing, especially if the loan is secured against your car. This is because older cars usually have more maintenance issues and could decrease in value quickly, making them a riskier security for the lender.

While this varies from lender to lender, at Wisr we offer car loans for used cars that have a maximum age of 20 years at the end of their loan term. 

2. Loan term

At Wisr, we offer loan terms of 3, 5 and 7 years. So, which one should you pick?

Well, the right loan term for you will ultimately depend on you and your financial situation. The shorter the loan term, the higher your monthly repayments will be. However, opting for a shorter loan term will generally save you money on interest over the life of the loan.

If you choose a longer loan term, your repayments will be smaller, but you’ll end up paying more interest overall. So, what’s right for you will depend on how much you can comfortably afford to repay each month vs how quickly you want to repay your used car loan.

Want to get a clearer idea of how loan terms affect your monthly repayment amount? Use our handy car loan calculator to see the impact. 

The good news is that here at Wisr, we don’t charge any early repayment fees for making extra repayments or repaying early in full. So, if you opt for a long loan term and your circumstances change, you can increase your repayment amount and repay your used car loan quicker to save on interest. 

3. Loan amount

The loan amount you can borrow in Australia depends on the value of the car you're buying, the type of loan you choose, your creditworthiness, and your income. 

As we mentioned earlier, at Wisr we offer maximum loan amounts of $62,000 for unsecured loans and $147,000 for secured loans. 

However, how much you’ll actually be able to borrow depends on how much you can comfortably afford to repay each month and whether or not you have a good credit score.

Not sure how your credit scores are shaping up? View them for free on Wisr App and get personalised insights into how you can take yours to the next level. 

4. Interest rates

Interest rates for used car loans in Australia can vary depending on whether you're taking out a secured or unsecured loan. As mentioned earlier, secured loans tend to offer lower interest rates since they are backed by the car as collateral.

That said, the interest rate that you’re offered by a lender will depend on how strong your credit score is. The better your credit score, the better the interest rates you’ll have access to. Other factors that can influence your interest rate include whether you’re a homeowner and the age of the vehicle you want to buy if it’s a secured loan

The most accurate way to find out what interest rates are available to you is to get a rate estimate. At Wisr, our rate estimate won’t affect your credit score, so you can assess your options at no cost to you. 

Want to know more about all things car loans? Check out our Smart Guide: The complete guide to car loans in Australia

Top tips for buying a used car 

Ready to start car hunting? Here are our top tips for finding the right used car for you in Australia.

1. Decide whether a dealership or private sale is right for you

Often you can get a better price if you purchase a used car through a private sale. However, a dealership is likely to offer you warranties and guarantees with your second-hand car purchase. They’ll also usually take care of the paperwork and a reputable dealership will have inspected the car beforehand to make sure it’s in good condition. 

So, the route that’s right for you will usually come down to how knowledgeable you are about cars and how much time you have to put into your search.

2. Get a PPSR check

A PPSR Personal Property Securities Register check is just $2 and allows you to find out if there are any security interests over the car - aka whether the car you want to buy is recorded as free from debt, has been stolen or has been written off. 

If you’re buying a used car, a PPSR check is a good way to make sure you don’t purchase a vehicle that could cause you problems later.

3. Check the car’s service history

It’s always a good idea to check the car’s service history and make sure the seller has been taking proper care of the car you want to buy. It’ll also tell you if the vehicle has undergone any major repairs that could signal potential problems down the line. 

4. Match the car’s serial numbers to the paperwork

This isn’t just a box-ticking exercise. Irregularities in the car’s VIN, identification number, engine number or registration number could suggest the car is stolen. You’ll find the:

  • VIN on the metal plate inside the engine bay

  • Engine number on the engine 

  • Registration number on the car’s number plate


Up to speed on how to get a car loan for used cars? Great. If you’re ready to see your car loan options with Wisr, simply get a rate estimate and find out your options.

Did you find this content helpful?

Disclaimer: This article contains general information only, and is not general advice or personal advice. Wisr Services does not recommend any product or service discussed in this article. You must get your own financial, taxation, or legal advice, and understand any risks before considering whether a product or service discussed in this article may be appropriate for you. We have taken reasonable efforts to ensure that the information is accurate at the time of publishing, but the information is subject to change. We may not update the article to reflect any change.

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