Clear definitions of key Australian Australian car loans and vehicle finance terms. Use this glossary alongside our calculator to understand your results.
A lump sum due at the end of a car loan term — typically 20-30% of the vehicle price. Reduces monthly payments but costs more in total interest.
A business car finance product where the lender takes a mortgage over the vehicle. Used by ABN holders to claim GST and depreciation.
The true annual cost of a car loan including most fees. Required by Australian law alongside the advertised rate.
Full vehicle insurance required by most lenders as a condition of a secured car loan.
Finance arranged through a car dealership, typically funded by the manufacturer's finance arm or a bank. Often more expensive than bank finance.
The total price of a vehicle including all on-road costs — registration, stamp duty, CTP insurance and dealer delivery fees.
A one-off fee charged by the lender to set up the loan. Included in the comparison rate calculation.
A conditional approval from a lender confirming the maximum amount they will lend. Obtained before visiting a dealer.
Insurance covering the difference between an insurance payout and the remaining loan balance if a vehicle is written off.
A vehicle lease arrangement where an employer makes payments from an employee's pre-tax salary, creating significant tax savings.
A national register showing whether a vehicle has existing finance or is stolen. Check at ppsr.gov.au for $2.
The estimated value of a vehicle at the end of a lease or loan term. Used to calculate balloon payment amounts.
Now that you understand the terminology, use our free Car Loan Calculator to calculate your results. All terms above appear throughout the calculator and our guides.
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