Car Loan Comparison Rates – Aussie Car Loans

Car Loan Comparison Rates

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Comparison rates can play an important role when it comes to car loans. But just what are they and why are they important?

Let’s deal with the why first.

Comparison rates can provide insight into what your car loan may cost over the life of the loan. The comparison rate therefore helps you to compare one car loan against another using a set consistent formula. This enables you to compare loans on a consistent basis so that you are comparing apples to apples.

What is the comparison rate?

The comparison rate is an indicative interest rate that combines the nominal interest rate with any foreseeable fees and charges associated with the loan so you can compare what you’ll be paying. The comparison rate is calculated by taking into account:

  • the amount borrowed
  • the term of the loan
  • the frequency of repayment
  • the interest rate
  • and any ascertainable feed and charges connected with the loan excluding government charges.

For all your comparison rate needs talk to Aussie Car Loans today.

What is the comparison rate?

The comparison rate is an indicative interest rate that combines the nominal interest rate with any foreseeable fees and charges associated with the loan, to help you obtain a more comprehensive picture of what your car loan is going to cost you over the life of the loan.

While the comparison rate helps you to compare one car loan against another on a cost basis, it’s also important to consider the features of a loan such as redraw and direct debit facilities, loan portability and repayment options that increase the flexibility of your loan and can make a huge difference to the overall cost of a car loan.

What costs does the comparison rate include?

  • Nominal interest rate: the advertised interest rate before any fees.
  • Loan approval and any other up-front fees.
  • Known ongoing fees.

What does the comparison rate exclude?

  • Government and statutory fees – as these are standard regardless of lender or loan type.
  • Insurance products like comprehensive car insurance premiums.
  • Fees and charges that are event based and may or may not apply throughout the life of your loan. e.g. statement fees or early repayment fees.

How do you calculate the comparison rate?

The comparison rate is calculated in accordance with a standard formula, specified by the regulations, which takes into account;

  • The amount borrowed
  • The term of the loan
  • The frequency of repayments
  • The interest rate (see our current rates)
  • Ascertainable fees and charges connected with the loan except for government charges.

What is a comparison rate schedule?

A comparison rate schedule details the various rates that apply to the lenders products at various loan terms and various loan amounts.

Private Car Finance from 6.95% comparison 8.49%*
Dealer Car Finance from 6.95% comparison 8.49%*
Commercial Car Finance from 6.45% comparison*
Use our car finance calculator for an indicative look at what your repayments would be or for a more accurate quote, fill out our easy to use online application form.
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