Ways to pay for a car
A car is a significant purchase. Many types of cars, especially new cars, are expensive, so saving your cash to pay the entire cost up front isn’t always an option. However, there are other ways to get behind the wheel of your dream car.
Explore car loans
A car loan is a type of personal loan you can use to buy a vehicle. Car loans can usually be used for both new and used cars.
Different loans will give you the option of fixed or variable interest rates, weekly, fortnightly or monthly repayments, and how many years you can take to pay back the loan. The interest rate you’re offered will depend on your financial situation, and loans may come with fees. Always do your research to make sure you understand all the features of your car loan.
NAB offers fixed and variable rate car loans with a maximum loan term of seven years. We don’t charge penalty or exit fees, and if you’re approved and accept your loan offer through NAB Internet Banking, your money will be ready in one business day.
Learn more about our secured and unsecured car loans.
Car dealer finance
Another option is to get finance from the dealership where you buy your car. Car dealer finance usually only applies to new cars.
Similar to car loans, you should ask the dealer about interest rates, fees, repayments and loan terms. There are a few other important questions you should ask a car dealer when exploring this option:
Leasing a car
Leasing a car means you’re renting it from a company, rather than buying it yourself. This can mean lower monthly payments, the ability to upgrade to newer models, and the possibility that servicing costs will be included.
However, you don’t own the car, which means you can’t sell it when you’re done with it. There may also be restrictions on how many kilometres you can drive per year, and penalties for wear and tear. You’ll likely also end up paying more over time – you’ll keep paying leasing costs for as long as you drive the car, unlike car loans or dealer finance where you pay off the money you borrowed over time.
There are all kinds of leasing arrangements available. Speak to a tax specialist about the tax implications before you make a decision.
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The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial and taxation advice before acting on any information in this article.