You can still get a car loan if your vehicle is secondhand. Compare offers below.
A pre-owned vehicle can make a good choice if you need a first or next car. You can get a good deal because you’re not buying it brand new and there can be more room to negotiate if it’s a private sale. If you don’t have the full amount ready to make your purchase, you have a range of finance options available to consider.
Read our used car loans guide below and find out all the options available.
From rate 100% confidential application Apply today to get approved for a secured car loan up to $200,000.
Lending Crowd Car Loan
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Apply today to get approved for a secured car loan up to $200,000.
Low rate used car loans available on Finder
How does a used car loan work?
A used car loan works the same way as a new car loan. It uses the vehicle you’re purchasing as security, and in return, you receive a competitive interest rate. You can either apply for your loan first and get pre-approval, so you know how much money you have to spend on a vehicle, or you can find the car you want to purchase and then apply for a loan. Either way, the lender needs all the vehicle’s details before it can entirely approve you.
You can apply for a loan of between $2,000 and $70,000 and have between one and five years to repay. Lenders have restrictions on the type of car you can finance, for example, you may not be able to fund a vehicle which is over twelve years old at the end of the loan term.
Repayment flexibility differs between lenders, but you can typically select weekly, fortnightly or monthly repayments. You may be able to repay your car loan early without penalty or make additional payments without additional fees.
If you receive approval for a loan, the lender may prefer to pay the car seller directly or may send the funds to you to pay the seller. Discuss this with your lender before you apply.
How old a car can I finance with a used car loan?
If you want to use your used car as security for the loan, each brand has different criteria. Here are the age limits for some of the lenders you can compare in the table above:
|Lender||Loan||Maximum age of car||Loan amount||Find out more|
|Harmoney||Peer-to-Peer Car Loan||No collateral needed||From $2,000 to $70,000 unsecured||Details|
|Admiral Finance||Car Loan||No max. age. Appraised value > loan amount||From $1,000 to $50,000||Details|
|AA Car Loans||Car Loan||Not more than 12 years||From $5,000 to $75,000||Details|
|Heartland Bank||Car Loan||Up to 12 years||From $5,000 to $50,000|
|Co-Operative Bank||Vehicle Loan||From $3,000 to $30,000|
|ASB||Car Loan||Minimum of $2,000|
|Kiwibank||Personal and Car Loan||Not more than 20 years||Minimum of $2,000 (unsecured) and $6,000 (secured)|
|Westpac||Car Loan||Not more than 7 years||From $4,000 to $50,000 (unsecured)|
From $10,000 to $100,000 (secured)
|Finance Direct||Auto Finance|
|QuickLoans||Car Loan||No max. age. Appraised value > loan amount||From $1,000 to $20,000||Details|
What types of used car loans are available?
There are two types of used car loans, a secured and an unsecured used car loan.
- Secured car loan. These loans offer the most competitive rates as it requires you to provide the car as security for the loan. Check that your used car is eligible as security and remember it’s likely you can only borrow as much as the value of the vehicle.
- Unsecured car loan. If your vehicle doesn’t qualify as security for a lender or you want to borrow additional funds for something else, you might want to consider an unsecured car loan. These loans come with slightly higher rates but more flexibility in how you can use the loan.
- Dealership finance. When you’re shopping for a car, you’ll see a lot of dealership finance deals advertised, and they are another option to consider. This finance works by you paying low interest and repayments for the majority of your term and then a balloon payment, usually a few thousand dollars, at the end of the term. Make sure you find out all the details of the finance before you apply.
How do I compare used car loans?
Securing the right finance is as essential as finding the right car. Some car loan terms extend up to five years so it can be with you a long time. Here’s what to look at to find the right finance:
- Interest rate. The interest rate is the first thing you should consider when you are comparing used car loans. Compare loans with similar features to ensure you get a competitive rate and make sure you look at the comparison rate also as it includes fees as well as interest.
- Fees. Lenders can charge a range of fees with used car loans. These can include upfront fees such as application fees, ongoing expenses such as monthly and annual charges and penalties such as early repayment fees.
- Flexibility. Find out how flexible your loan is. Can you make additional and lump-sum payments during your loan term? Can you repay the loan early without penalty? If you do make extra repayments, can you get these back using a redraw facility, and are there any restrictions regarding this?
Common questions we’re asked about financing a used car
Should I buy a car that’s under finance?
Buying a car from a private seller that is currently under finance carries more risk. You need to make sure you have proof the seller has paid off the remaining balance of the loan before you finalise the sale.
How do I receive my loan funds?
Lenders differ on how they send you the loan funds. Some lenders may prefer to send the funds directly to the car seller, while others may transfer the loan funds to your nominated bank account. Check how the lender will handle this before you apply.
Can I check the safety ratings of a used car?
Yes. RightCar NZ lists used car safety ratings that you can check before you purchase your vehicle.
How do I inspect a used car?
If you aren’t confident with cars, then it’s best to get the vehicle inspected by a mechanic. If you have a good understanding of vehicles, then you can do the inspection yourself.
Is it better to buy a used car from a dealership or through a private seller?
There are benefits and drawbacks to both. A used car dealer checks the quality of vehicles before selling them so you know you there are unlikely to be massive faults or damage with the car. However, you may find there is less room to negotiate, and you may not get as good a deal. With a private seller, there is no quality control, and if you don’t have the vehicle thoroughly checked you could purchase a faulty car, but there is more chance of a bargain.
* The offers compared on this page are chosen from a range of products finder.com/nz has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms ‘Best’ and ‘Top’ are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing products.