Best Car Finance NZ 2026: Compare Loans & Save - June 2026
Compare the best car finance and loan offers and save. We list lenders offering low rates and share tips and deals to help finance your car at the best price, with offers from around 7% p.a.
Updated 6 June 2026
Summary
In this guide, we look at the fundamentals of car financing and reveal the best deals currently available. We cover:
Know This First: How much can I afford to borrow for a car loan?
Our video below explains everything you need to know to make an informed decision. MoneyHub Founder Christopher Walsh walks you through the guide and helps you understand the key aspects of borrowing to buy a car:
Summary
- Our guide to the best car finance options has everything you need to know to get the right deal and slash the cost of car finance. We make it easy to compare interest rates and fees, and help you get the best deal to keep the ongoing repayments low.
- If you need to buy a car and don’t have the money to pay for it upfront, car finance can be a cost-effective option to get you in the driver’s seat. But you need to pick an affordable lender.
In this guide, we look at the fundamentals of car financing and reveal the best deals currently available. We cover:
- What Our 2026 Comparison Taught Us About Car Financing Costs: Key Findings and What You Need to Know
- What is Car Finance?
- Different Car Finance Options Compared - Car Finance vs Leasing vs Balloon Payments vs Credit Card vs Paying Cash
- Car Finance for Popular Models: Ranger, Hilux, Outlander, Corolla, Aqua, Rav4 and Beyond
- Our Eight Essential Tips to Save on Car Finance
- What You Need to Apply for Car Finance
- The Best Car Finance Offers Available Right Now
- Frequently Asked Questions
- Real Stories: When Car Finance Goes Right (and Wrong)
- Our Conclusion: Finance Smarter in 2026
Know This First: How much can I afford to borrow for a car loan?
- A good rule is to keep monthly payments under 10% of your pre-tax income. For example, if you earn $5,000/month, it's common to aim for payments below $500/month.
- With a car loan interest rate of 10% p.a. repaid over 5 years, $500/month lets you borrow around $23,500, which is sufficient for a reliable used car like a Toyota Corolla. Use our Car Finance Calculator to estimate your budget.
- New Zealanders are becoming aware of the need to compare lenders in advance - our Simplify vs MTF vs UDC vs Heartland - Which Car Loan is Best comparison is a helpful starting point.
Our video below explains everything you need to know to make an informed decision. MoneyHub Founder Christopher Walsh walks you through the guide and helps you understand the key aspects of borrowing to buy a car:
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Christopher Walsh, MoneyHub's Founder and Head of Research, shares his views on car finance:
Important: If you have a history of bad credit, this guide is not for you
Add-on Insurances: Car Lenders may offer you Mechanical Breakdown Insurance (MBI), Payment Protection Insurance (PPI) and Guaranteed Asset Protection Insurance (GAP). Our view is simple:
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Christopher Walsh
MoneyHub Founder and Head of Research |
Disclaimer:
- Borrowing money to buy a car is a serious decision and needs to be carefully planned and budgeted for. This step-by-step guide outlines everything you need to know about getting a car loan and gives tips to make it as cheap and stress-free as possible.
- In the interests of full disclosure, MoneyHub may earn a referral bonus for anyone that’s approved through some of the below links. We publish the best publicly available car loan offers that we can find, irrespective of any pre-existing commercial arrangement. Rates vary based on individual credit profiles.
Current Car Lending Offers
Know this first:
June Alert: Simplify Slashes Rates - now from 6.85% p.a.
For borrowers with decent credit and affordability (we believe if you're reading and comparing on MoneyHub, there's a greater chance that's you), Simplify just dropped its rates to the lowest we've seen in some time:
Many readers checking multiple lenders and reading guides already have the credit profile these rates require - you can confirm this in 1-2 minutes using Simplify.
- The repayment amounts exclude any upfront fees and/or ongoing fees a lender may charge.
- The interest rates below represent each lender's lowest rate. This is not necessarily the rate you will receive, and for this reason, we suggest considering your options carefully.
June Alert: Simplify Slashes Rates - now from 6.85% p.a.
For borrowers with decent credit and affordability (we believe if you're reading and comparing on MoneyHub, there's a greater chance that's you), Simplify just dropped its rates to the lowest we've seen in some time:
Many readers checking multiple lenders and reading guides already have the credit profile these rates require - you can confirm this in 1-2 minutes using Simplify.
Enter your loan details
Repayment frequency
Important: Calculations use the standard amortisation formula and reflect the interest rate only. Establishment fees, monthly account fees, and other lender charges are not included and may apply on top of these figures. Interest rates shown are advertised rates and may vary based on your credit profile, the loan amount, and the asset being financed. Always confirm current rates and fees directly with the lender before applying.
In partnership with Simplify, MoneyHub's favourite car loan broker
Thinking about finance? Compare every major lender in one go
If you're weighing up a car loan, it pays to see what's on offer before you walk into a dealer or your bank. With Simplify, a licensed New Zealand finance broker, you can compare rates and weekly repayments across all the major lenders at once.
Get my rate
Free quote, no obligation
All major car lenders
Feefo 4.9/5 (3,000+ reviews)
A decision in minutes
Trusted, award-winning broker
Popular with MoneyHub readers
Our View
- A fast way to see the spread of rates across lenders - better than applying to one lender blind.
- Look at the comparison rate, not just the weekly number. A low weekly payment over a longer term can cost you far more overall.
- Check the rate you're offered against your own bank before you sign.
- Simplify is one strong option, not the only place finance exists.
How this works. MoneyHub is independent. We're not a lender, broker or financial adviser, and nothing here is personalised financial advice. We've partnered with Simplify, a licensed New Zealand Financial Service Provider, and we earn a fee if you take out a loan through them. This never changes the rate or fees you're offered.
Rates & privacy
Quotes shown are indicative only. Your actual rate depends on your circumstances and currently ranges from 6.85% to 29.95% p.a.
When you request a quote, your details are shared with Simplify so they can assess your options, and if you proceed they may share relevant information with their panel of lenders.
Why Pay 15% When You Could Pay 8%? NZ's Two Top Car Lenders
Fact: The average New Zealander overpays thousands on car and personal loans by not shopping around.
As a reminder, our research identified two lenders consistently beating banks by 4-10% and known for fair rates and reliable service
Typical Example: $20,000 loan over 5 years:
Why waste money on high interest? The rate you lock in today determines how much you'll pay every single week.
Advertising Disclosure: We may earn a commission from loans, but our top picks are always based on rigorous research and your best interest.
As a reminder, our research identified two lenders consistently beating banks by 4-10% and known for fair rates and reliable service
- Check your rate with Simplify’s Low-Rate Car Loan in under 2 minutes – customers save significantly, usually $50-$150+ per month, and Simplify receives rave reviews from our readers. Get your rate instantly.
- Harmoney: Offers an instant personalised rate. Check your rate.
Typical Example: $20,000 loan over 5 years:
- Major bank or car dealer: 14% p.a. = $465/month
- Challenger Lender: 9% p.a. = $415/month
- You may save: $50+ per month ($3,000 total over the life of the loan)
Why waste money on high interest? The rate you lock in today determines how much you'll pay every single week.
- Instant rate checks: It takes around 1-2 minutes - Simplify and Harmoney make it easy.
- No obligation: Checking won't affect your credit score or credit history
- Transparent: See your actual rate, not "rates from..."
Advertising Disclosure: We may earn a commission from loans, but our top picks are always based on rigorous research and your best interest.
1. What Our 2026 Comparison Taught Us About Car Financing Costs: Key Findings and What You Need to Know
MoneyHub’s research team analysed financing costs for twelve of New Zealand’s most popular financed cars - Ford Ranger, Toyota Hilux, Mitsubishi Outlander, Toyota Corolla, Toyota Aqua, Toyota RAV4, Suzuki Swift, Mazda CX-5, Toyota HiAce, Nissan X-Trail, Toyota Prius, and Mazda Axela. Our research revealed how lender offers impact your total loan expense.
Without transparent online quotes, car financing can feel like a gamble. MoneyHub’s research reveals that car yard salespeople often ask about your job, home ownership, and existing car finance commitments to determine how much they can mark up the lender’s interest rate - sometimes by 5%, 7%, 10% or more, costing you thousands extra. This leaves you with little control over your final rate. Pre-approved finance offers avoid this and let you take charge and save thousands.
We compared dealer financing rates to pre-approved loans from trusted lenders like Simplify, Harmoney, First Credit Union, MTF and other lenders, using varying loan amounts for drivers with good credit across Auckland, Wellington, and Christchurch. Here's what our research revealed:
1) Dealer Financing: A Costly Trap Which Usually Costs Thousands Extra
2) Pre-Approved Car Loans: Save Thousands, Know Your Costs Upfront
3) New Car 0% Dealer Offers: The Exception to the Rule
4) Toyota Corolla: Easiest to Finance, But Dealers Still Overcharge
5) Ford Ranger and Toyota Hilux: Dealer Rates Make Tradies Pay
Compare Car Finance with Trusted Lenders
MoneyHub's 2026 research proves that pre-approving your car finance with trusted lenders like Simplify, Harmoney, and First Credit Union (FCU), among others, empowers you to take control, save money, and secure your dream car with confidence. Here's why pre-approval is the smartest way to finance your next car:
Important: Please don't let dealers dictate your interest rate - by getting pre-approved, you are best prepared to potentially save thousands.
Without transparent online quotes, car financing can feel like a gamble. MoneyHub’s research reveals that car yard salespeople often ask about your job, home ownership, and existing car finance commitments to determine how much they can mark up the lender’s interest rate - sometimes by 5%, 7%, 10% or more, costing you thousands extra. This leaves you with little control over your final rate. Pre-approved finance offers avoid this and let you take charge and save thousands.
We compared dealer financing rates to pre-approved loans from trusted lenders like Simplify, Harmoney, First Credit Union, MTF and other lenders, using varying loan amounts for drivers with good credit across Auckland, Wellington, and Christchurch. Here's what our research revealed:
1) Dealer Financing: A Costly Trap Which Usually Costs Thousands Extra
- MoneyHub research found that dealer financing for used cars averages well over 15% p.a., compared to starting rates of around 8% p.a. from direct lenders/brokers such as Simplify.
- For a $20,000 loan over 5 years, dealer financing at 15% p.a. costs $29,160 ($486/month), while Simplify's 8% p.a. rate would cost $24,780 ($413/month)—a $4,380 difference.
- High-demand utes like the Ford Ranger and Toyota Hilux faced even steeper dealer rates, averaging around 16% p.a., costing $29,580 ($493/month), a $4,800 gap compared to Simplify.
- As we outline below, pre-approved finance is the only way to avoid these markups.
2) Pre-Approved Car Loans: Save Thousands, Know Your Costs Upfront
- MoneyHub's research shows that pre-approval with transparent lenders and brokers lets you lock in a low rate and know your total cost before you go any further with buying a car.
- For a Toyota Corolla, a pre-approved loan at 9.99% p.a. costs $25,380 ($423/month), while a dealer's 14.95% p.a. rate costs $29,160 ($486/month)—saving you $3,780. Pre-approval also gives you cash-buyer negotiating power, potentially slashing thousands off the car price. The worst approach is to a car yard without financing arranged - you have nothing to compare the rate you're offered to, there is pressure to "sign and drive today", and
3) New Car 0% Dealer Offers: The Exception to the Rule
- Our analysis confirms that 0% of dealer offers for new cars (e.g., Toyota, Mazda) can be a steal, but they're rare for used cars. Used models like the Mazda CX-5 and Nissan X-Trail saw dealer rates of 15% p.a. or more, costing $29,580 ($493/month) for a $20,000 loan. Unless you're buying new with a 0% offer, dealers are rarely the best choice - pre-approval is the only way to save.
4) Toyota Corolla: Easiest to Finance, But Dealers Still Overcharge
- The Toyota Corolla was likely to be one of the cheapest cars to finance due to its low-risk profile, and borrowers tended to be more financially stable than drivers of other cars. However, pre-approved car finance remained the best way to lock in the best rate for this popular hatchback as interest rates between dealers varied.
5) Ford Ranger and Toyota Hilux: Dealer Rates Make Tradies Pay
- Utes are in high demand, and we believe car dealers capitalise on this. We suggest anyone looking to finance a Ford Ranger and Toyota Hilux is best to shop around - if you're planning to borrow $40,000, the difference between a 15% loan and a 9% p.a. loan is close to $10,000 - tradie-targeted markups need to be avoided.
Compare Car Finance with Trusted Lenders
MoneyHub's 2026 research proves that pre-approving your car finance with trusted lenders like Simplify, Harmoney, and First Credit Union (FCU), among others, empowers you to take control, save money, and secure your dream car with confidence. Here's why pre-approval is the smartest way to finance your next car:
- Gives You Negotiating Power: Pre-approval lets you walk into a car yard as a cash buyer, knowing your budget and interest rate. This gives you leverage to negotiate the car price down—potentially saving thousands—without the pressure of on-the-spot dealer financing.
- No Impact on Your Credit Score: Getting pre-approved typically involves a soft credit check, which doesn't affect your credit score. You can compare rates from Simplify, Harmoney, FCU and anyone else without risk, ensuring you lock in the best deal before committing.
- Saves You Money in Almost Every Case: Our research shows pre-approved loans save $3,780–$4,800 on a $20,000 loan over 5 years compared to dealer rates (14.95%–16% p.a+.). For a $40,000 Toyota Hilux loan repaid over five years, a 6% lower rate (e.g., 9% p.a. vs 15% p.a.) saves nearly $10,000.
- Helps You Secure Your Car with Confidence: Pre-approval means you know your rate, monthly payments, and total cost upfront - everything is transparent, and you have time to consider it. Whether you want car finance for a Ford Ranger for work or a Toyota Corolla for the family, you can shop around with certainty, avoiding dealer markups and securing the car you want on your terms.
Important: Please don't let dealers dictate your interest rate - by getting pre-approved, you are best prepared to potentially save thousands.
In partnership with Simplify, MoneyHub's favourite car loan broker
Thinking about finance? Compare every major lender in one go
If you're weighing up a car loan, it pays to see what's on offer before you walk into a dealer or your bank. With Simplify, a licensed New Zealand finance broker, you can compare rates and weekly repayments across all the major lenders at once.
Get my rate
Free quote, no obligation
All major car lenders
Feefo 4.9/5 (3,000+ reviews)
A decision in minutes
Trusted, award-winning broker
Popular with MoneyHub readers
Our View
- A fast way to see the spread of rates across lenders - better than applying to one lender blind.
- Look at the comparison rate, not just the weekly number. A low weekly payment over a longer term can cost you far more overall.
- Check the rate you're offered against your own bank before you sign.
- Simplify is one strong option, not the only place finance exists.
How this works. MoneyHub is independent. We're not a lender, broker or financial adviser, and nothing here is personalised financial advice. We've partnered with Simplify, a licensed New Zealand Financial Service Provider, and we earn a fee if you take out a loan through them. This never changes the rate or fees you're offered.
Rates & privacy
Quotes shown are indicative only. Your actual rate depends on your circumstances and currently ranges from 6.85% to 29.95% p.a.
When you request a quote, your details are shared with Simplify so they can assess your options, and if you proceed they may share relevant information with their panel of lenders.
Compare Car Finance with Our Top Two Lenders – Simplify and Harmoney
- Our comprehensive research has identified Simplify and Harmoney as leading options in car finance based on competitive rates and borrower-friendly terms.
- Simplify offered low rates and a proven service, which can save up to $4,380 on a $20,000 loan over 5 years (if borrowed at around 8% p.a. vs borrowing at around 15% p.a. from a used car dealer).
- Important: Simplify offers flexible terms with no early repayment fees for many borrowers, making paying off your loan faster and saving on interest easier. Harmoney provides a streamlined online application with no early repayment fees and a low $150 establishment fee, which helps to secure fast hassle-free finance.
2. What is Car Finance?
If you’re buying a new or used car and need to borrow to pay for it, there are two main finance options available.
What's the difference?
Our video below explains how you can get the best car loan by understanding what impacts the overall cost:
- A personal loan – this is a loan offered by banks and finance companies that is unsecured or one that is secured against your car.
- A car finance agreement – this is a loan that is specifically for car purchase, and is offered by banks, finance companies and car dealers.
What's the difference?
- With both options, you will own the car outright – this means you’ll need to insure it too unless you are prepared to risk an accident that would write off the value of your investment while still leaving you with the loan.
- If your loan is secured, meaning the lender as a security interest in your car, then you still own the car. However, if you become unable to make the repayments, the lender has the power to repossess your car to help pay off the debt you owe.
- Our guide to personal loans outlines the options available whether you are considering a secured or unsecured personal loan.
- If you are thinking about getting a guarantor on a car loan, our Car Loan Guarantors guide outlines what you need to know.
Our video below explains how you can get the best car loan by understanding what impacts the overall cost:
3. Best Car Finance Options: Loans, Leasing, and More
Generally, there are five different ways to pay for a car. We outline the key differences in the table below:
Finance Type |
Typical Length of Agreement? |
Deposit Required? |
Who Owns the Car? |
Mileage Restrictions? |
Debt Type |
None (pay for car with savings) |
N/A |
N/A |
You |
None |
N/A (No Debt) |
Credit Card |
Interest-free for 45-55 days |
No |
You |
None |
Unsecured |
Car Finance |
6 months to 5 years |
No |
You |
None |
Secured |
1 to 5 years |
Yes |
You |
Yes (in most cases) |
Secured |
|
2-3 years |
Yes |
Leasing Company |
Yes |
Unsecured |
Which option is best?
There is no 'best' option as each person's circumstances and requirements are different. Our guide below outlines more information on each option, as well as a comparison of the latest lending offers if you believe car finance to be the best option for your situation.
There is no 'best' option as each person's circumstances and requirements are different. Our guide below outlines more information on each option, as well as a comparison of the latest lending offers if you believe car finance to be the best option for your situation.
Cash savings – the cheapest option for almost every car purchase
If you've got the savings, buying a car in one payment means you'll avoid interest costs, loan fees, and you'll own the car from day one. However, if you're buying a new car, many models depreciate 25% to 40% in the first year, meaning leasing can work out to be cheaper.
Credit Card - a savvy way to finance a car (if you can pay it off quickly)
If you have a sufficient credit card limit and know you can repay the balance immediately (or within 1-3 months), credit cards are an affordable way to finance a car. Many dealers accept credit cards, and you can also send money to a bank account using a credit card by using a money transfer service. A low-interest credit card can help reduce the overall costs.
Car loans - usually the cheapest financing if you need to borrow and want to own the car outright
Interest rates range from around 9-10% p.a. to as high as 25% p.a., plus lending fees: the better your financial situation, the lower the interest rate. Once approved, the lender sends you the money or pays the person you're buying the car from directly. From there, repayments are made weekly, fortnightly or monthly over one to five years. At the end of the repayment period, the loan is cleared.
Balloon Payment financing - a risky and often costly way to finance a new car
Mostly offered by dealers, balloon payment financing can be suitable if you want to get a new car every few years. But the arrangements require a sky-high final payment, as well as interest costs and an upfront deposit. For all of these reasons, standard car loans will, in most cases, be a cheaper alternative.
Car leasing - a cheap way to access a car (but you'll never own the car)
Car leasing is essentially a long-term rental; you'll never own the car, and there will be mileage restrictions. The costs are simple - you pay an initial deposit and then an ongoing fee to drive the car. The standard length of a car lease contract is one to three years. Once the contract ends, you return the car and pay for any damage or excess mileage. Examples of manufacturers offering leasing include Honda, Toyota (see our review of Toyota Finance), Lexus and Hyundai, among others. Our guide to vehicle leasing has more information.
4. Car Finance for Popular Models: Ranger, Hilux, Outlander, Corolla, Aqua, Rav4 and Beyond
It's easy to believe that the car you choose sets your finance cost, and that a Ranger, a Hilux, or a Corolla each comes with its own "finance deal." Dealers advertise "finance from $X a week" against specific models, and there's a model-finance page for nearly every car online. But things are not always what they seem.
Know This: The advertised price is one of the smaller factors in your total cost. What actually moves your rate and your total cost is mostly about you and how the loan is structured, not which model you pick.
What drives the cost of finance includes:
Where the car's make and model genuinely does matter (less than you'd think):
Our View: Stop shopping for finance by model - we believe the finance advertised per week by a car model on webpages and calculators is mostly marketing.
Instead, sort your deposit, know where your credit stands, borrow as little as you can for the shortest term you can afford, and get pre-approved before you walk into a yard so you can hold any car up against a rate you already have. That, not the car price, is what saves you money when you finance a car.
Know This: The advertised price is one of the smaller factors in your total cost. What actually moves your rate and your total cost is mostly about you and how the loan is structured, not which model you pick.
What drives the cost of finance includes:
- Your credit history: The single biggest lever on the rate you're offered. A clean record gets you the advertised low rates. Defaults or missed payments push you to the high end or to a decline.
- Your affordability: Lenders have to check that you can comfortably make repayments from your income after accounting for existing commitments. This determines whether you're approved, and often the rate and terms too.
- Your deposit: More money down means a smaller loan, less risk to the lender, and less interest over the life of the loan. It can also be the difference between approved and declined.
- The amount you borrow: This tracks the car's price, so price matters, but because it sets the size of the loan and the interest on it, not because of the model. A $40,000 loan costs more than a $20,000 one at the same rate.
- The loan term: The quiet cost driver almost everyone underestimates. Stretching a loan from three years to five lowers the weekly payment but can add thousands in interest. Always look at the total repaid, not just the weekly number.
Where the car's make and model genuinely does matter (less than you'd think):
- The vehicle does play a part, but mostly through its age, mileage and how easily it resells, not its make.
- On a secured loan, the car is the lender's collateral, so a newer, common, slow-depreciating car is lower risk and can mean a slightly better rate, a longer available term, or no deposit needed.
- An older, high-mileage or hard-to-resell vehicle (some imports included) is riskier security, so it can mean a higher rate, a shorter term, or a required deposit.
- Brand-new cars occasionally carry genuine 0% manufacturer offers.
Our View: Stop shopping for finance by model - we believe the finance advertised per week by a car model on webpages and calculators is mostly marketing.
Instead, sort your deposit, know where your credit stands, borrow as little as you can for the shortest term you can afford, and get pre-approved before you walk into a yard so you can hold any car up against a rate you already have. That, not the car price, is what saves you money when you finance a car.
5. Our Eight Essential Tips to Save on Car Finance
1) Car finance is a commitment to repay for an agreed-upon time-frame
2) The finance deal with the lowest interest rate is usually the best option, but be aware of upfront fees
To make an informed decision, you simply need to compare the annual interest rates offered between the lenders – the one with the lowest percentage is the best deal. Fees to get the loan will vary between lender, but the interest rate is the biggest factor in getting the best loan. Pick the wrong lender and you can easily pay $100 more every week on a $10,000 car.
For the purposes of this guide, we compare personal loans and car finance together (referring to it as “car finance”), as both operate near identically and the differences are largely indistinguishable to a borrower.
3) Make sure car finance is right for your income and spending habits
Car finance may not suit everyone. If you have trouble paying debts in general, car finance could end up an expensive mess if you default. The benefits include:
However, you'll need to watch out for:
4) Car finance is offered by a lot of different companies
Car financing is a very competitive market – you shouldn’t go with the first quote you get. Look at all the options and be open-minded to financing beyond traditional banks - it can at times be cheaper. Car finance lenders include:
5) Car finance is offered by manufacturer-dealerships
6) Avoid high-interest rates by making sure your finances are in order
The interest rate you will pay will be determined by a few factors, which we detail below.
7) Make your repayments more manageable
There are a few ways to reduce your the amount you repay on car financing:
8) Know the consequences of missing a car repayment
Generally, missing one repayment isn’t too serious – your lender will just follow up with a reminder and probably charge a small fee as a penalty. But, if you fail to make repayments one after another, your lender will take action and start legal proceedings to repossess your car.
The faster the lender can then sell your car, the less it will lose so your car is at risk of immediate seizure. You will also have a “default” put on your credit history. This will affect any further financing you need such as phones, other cars, mortgages etc.
- Car Finance is a debt you agree to for the sole purpose of paying for a car. You agree on an amount to borrow, an interest rate and a term of repayment (i.e. 1 year, 5 years). Once your loan is successful, either the party selling you the car will receive the money, or you will receive it directly. The lender will register an interest in your car (if the loan is secured).
- You then repay the loan with fixed payments, either weekly, fortnightly or monthly. Paying weekly incurs less interest costs than paying fortnightly or monthly as there is less debt outstanding.
- If you fail to keep up payments the finance company is entitled to seize the car - you must be certain that you can afford the repayments before you go ahead.
- Once repaid in full, your car finance agreement is terminated and the lender's interest is removed.
2) The finance deal with the lowest interest rate is usually the best option, but be aware of upfront fees
To make an informed decision, you simply need to compare the annual interest rates offered between the lenders – the one with the lowest percentage is the best deal. Fees to get the loan will vary between lender, but the interest rate is the biggest factor in getting the best loan. Pick the wrong lender and you can easily pay $100 more every week on a $10,000 car.
For the purposes of this guide, we compare personal loans and car finance together (referring to it as “car finance”), as both operate near identically and the differences are largely indistinguishable to a borrower.
3) Make sure car finance is right for your income and spending habits
Car finance may not suit everyone. If you have trouble paying debts in general, car finance could end up an expensive mess if you default. The benefits include:
- You can spread the cost of the car, so you don’t need all the money upfront and can get a better car by paying for it over time
- Most lenders offer financing that is simple to understand and arrange.
- You have flexibility in the term – you decide on whether you need 6 months or up to 5 years to repay
- Once you repay the car in full, the lender no longer has a claim to it.
- Buyers with poor credit history can apply, but will pay a higher rate of interest
However, you'll need to watch out for:
- High interest rates – the lower, the better in ALL cases
- Ongoing 'maintenance' fees for having car financing in place
- Late payments have fees and penalties which will add up
- If you fail to keep up with the repayments the lender can repossess the car to pay your debt.
- Early repayment fees - some lenders charge them, but others don't.
4) Car finance is offered by a lot of different companies
Car financing is a very competitive market – you shouldn’t go with the first quote you get. Look at all the options and be open-minded to financing beyond traditional banks - it can at times be cheaper. Car finance lenders include:
- Banks - Every bank in New Zealand offers personal loans and/or car loans. Banks may offer preferential interest rates to existing customers, as well as offering the option of including a car loan in a mortgage.
- Finance Companies and Credit Unions - Most Finance Companies and Credit Unions offer personal loans and/or car loans.
- Specialist Car Financing Companies - Companies exclusively offering car finance are most visible online with big claims of offering the best deals, but it's not always the case.
- Car Dealerships - Dealership car finance is offered and arranged by almost every car dealer in New Zealand – it’s a lucrative side-business on top of the commission from selling cars.
5) Car finance is offered by manufacturer-dealerships
- If you buy a new car, finance deals are usually arranged through the manufacturer’s car finance division, such as Holden Finance for Holden and Toyota Financial Services for Toyota.
- It’s definitely worth finding out what manufacturer-dealerships can offer you on a finance deal – it will usually be cheaper (but do compare).
- When you negotiate your new car, only mention finance options at the LAST possible moment - you want your conversation to be on dropping the sticker price, not the repayment costs. You can talk about financing options and interest rates once you have a confirmed price.
- If you’re buying a used car from a manufacturer-dealer, it’s also worth looking at their in-house finance options.
6) Avoid high-interest rates by making sure your finances are in order
The interest rate you will pay will be determined by a few factors, which we detail below.
- Your credit history – if you have been good with previous repayments (credit cards, phones, mortgage, loans etc) you’ll get a lower interest rate than someone with defaults or missed payments.
- Your deposit – if you want a $10,000 loan, having a $2,500 deposit is better than having $0. How much of a difference it makes depends on the lender’s risk assessment.
- The car’s model - if your car is a common model, this can mean a lower interest rate, as there is an improved chance of quick resale should you default so your loan is less risky.
- Consider taking a shorter loan period - the longer the term of the loan, the more interest you'll pay - the table below shows the total cost of a $10,000 loan at a 15% interest rate over a 1 year, 3 year and 5 year loan term. As outlined below, the total interest cost for a 5 year loan is more than five times the cost of a 1-year loan.
7) Make your repayments more manageable
There are a few ways to reduce your the amount you repay on car financing:
- Put down a larger deposit – the loan size will be reduced and so will the repayments you have to make.
- Agree to a longer repayment period – the repayments will be smaller, but you’ll pay more in interest charges which ultimately makes the loan more expensive.
- Make early repayments – the size of the loan will fall and subsequent repayments will be smaller, but check the fees involved in early repayments or overpayments.
8) Know the consequences of missing a car repayment
Generally, missing one repayment isn’t too serious – your lender will just follow up with a reminder and probably charge a small fee as a penalty. But, if you fail to make repayments one after another, your lender will take action and start legal proceedings to repossess your car.
The faster the lender can then sell your car, the less it will lose so your car is at risk of immediate seizure. You will also have a “default” put on your credit history. This will affect any further financing you need such as phones, other cars, mortgages etc.
6. What You Need to Apply for Car Finance
Lenders are focused on affordability. To determine this, they look at many different factors around your income. In many cases, they will ask for:
Other details you'll need to supply:
- Two or three recent payslips
- The most recent IRD return
- Your after-tax income
- Employer's details
Other details you'll need to supply:
- Lenders will also look at your ongoing expenses, current debts/loans, and any assets you own.
- You'll also need to prove your ID by submitting your driver's licence, passport or birth certificate.
- Finally, if you know what vehicle you want to buy, the lender will likely ask for its number plate (to get the make, model, year and colour), VIN (as outlined here) and the for sale or purchase price.
Do I need a deposit to get a car loan?
This depends on the customer's risk profile. For example, if the lender thinks the profile warrants a deposit, they will ask for one. Examples include a young person in their first job - the risk is higher than someone more established, so the lender may ask for 10% or 20% to give them more comfort. But, again, what you'll be offered is unique and can only be determined in the application process.
Generally, there is never really a fixed percentage amount the lender wants as part of a deposit - it is all case by case. As a result, low-risk borrowers will often be able to borrow 100% of the car purchase price.
Generally, there is never really a fixed percentage amount the lender wants as part of a deposit - it is all case by case. As a result, low-risk borrowers will often be able to borrow 100% of the car purchase price.
7. The Best Car Finance Offers Available Right Now
We've put together the best deals currently available, and list their upfront fees. Each lender will assess your ability to make repayments differently, which means you will most like be offered a range of interest rates by different lenders. What matters is that you can meet the repayments, understand terms and any associated fees.
A popular option is to contact a range of lenders for a non-obligation interest rate quote. Be clear on the amount you want to borrow upfront and what your income is, as well as all other loans/credit card balances you have.
Do you have a solid credit history and the income to make repayments without any foreseeable issue?
If you have good credit, we suggest contacting these two lenders for quotes:
Important: The interest rates stated above (and below) are the best offers - each borrower will be assessed for suitability, whereby an interest rate offer will be provided if the loan is approved. This interest rate may be higher than those disclosed below.
We suggest reading about Mechanical Breakdown Insurance, Payment Protection Insurance and GAP Insurance as these may be offered with a car loan either at dealer or with a lender directly. The more informed you are, the cheaper you car finance will be.
A popular option is to contact a range of lenders for a non-obligation interest rate quote. Be clear on the amount you want to borrow upfront and what your income is, as well as all other loans/credit card balances you have.
Do you have a solid credit history and the income to make repayments without any foreseeable issue?
If you have good credit, we suggest contacting these two lenders for quotes:
- Simplify - specialist car lending
- Harmoney - specialist personal lending with a dedicated loan for cars
Important: The interest rates stated above (and below) are the best offers - each borrower will be assessed for suitability, whereby an interest rate offer will be provided if the loan is approved. This interest rate may be higher than those disclosed below.
We suggest reading about Mechanical Breakdown Insurance, Payment Protection Insurance and GAP Insurance as these may be offered with a car loan either at dealer or with a lender directly. The more informed you are, the cheaper you car finance will be.
Current Car Finance Options Available Throughout New Zealand - Rates, Fees and Details:
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Simplify
June Alert: Simplify Slashes Rates - now from 6.85% p.a. For borrowers with decent credit and affordability (we believe if you're reading and comparing on MoneyHub, there's a greater chance that's you), Simplify just dropped its rates to the lowest we've seen in some time: Many readers checking multiple lenders and reading guides already have the credit profile these rates require - you can confirm this in 1-2 minutes using Simplify. |
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Harmoney (Secured Car Loans)
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Better Finance
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Co-operative Bank
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AA Money
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MTF Finance
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ANZ Bank
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ASB Bank
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Finance Direct
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GEM
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Geneva
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Marac
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Unity (NZCU BayWide)
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Turners
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UDC
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Driva (Car Loan Broker)
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Westpac
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In partnership with Simplify, MoneyHub's favourite car loan broker
Thinking about finance? Compare every major lender in one go
If you're weighing up a car loan, it pays to see what's on offer before you walk into a dealer or your bank. With Simplify, a licensed New Zealand finance broker, you can compare rates and weekly repayments across all the major lenders at once.
Get my rate
Free quote, no obligation
All major car lenders
Feefo 4.9/5 (3,000+ reviews)
A decision in minutes
Trusted, award-winning broker
Popular with MoneyHub readers
Our View
- A fast way to see the spread of rates across lenders - better than applying to one lender blind.
- Look at the comparison rate, not just the weekly number. A low weekly payment over a longer term can cost you far more overall.
- Check the rate you're offered against your own bank before you sign.
- Simplify is one strong option, not the only place finance exists.
How this works. MoneyHub is independent. We're not a lender, broker or financial adviser, and nothing here is personalised financial advice. We've partnered with Simplify, a licensed New Zealand Financial Service Provider, and we earn a fee if you take out a loan through them. This never changes the rate or fees you're offered.
Rates & privacy
Quotes shown are indicative only. Your actual rate depends on your circumstances and currently ranges from 6.85% to 29.95% p.a.
When you request a quote, your details are shared with Simplify so they can assess your options, and if you proceed they may share relevant information with their panel of lenders.
8. Frequently Asked Questions
Car finance isn't complicated, but there are pitfalls. We strongly suggest asking a lender anything you're unsure of BEFORE signing up to any loan. This is the best way to lower the risk and ensure you can afford the loan repayments. Our selection of common questions helps explain car finance in further detail:
The lender advertised “from 9.99%”, but I was quoted a much higher rate - why is this?
What the lender advertises and what it offers to most people are entirely different. Your interest rate will depend on your credit history, the vehicle you are buying, your income and other factors.
Can I get car finance with bad credit?
Yes, but rates will be higher (20%+ p.a.), and terms may be stricter. Our Bad Credit Car Loans guide offers specific advice for borrowers with credit challenges.
What’s the difference between secured and unsecured car loans?
Secured loans use your car as collateral, offering lower rates (e.g. around 8% p.a.) but with repossession risk if you miss payments. Unsecured loans have higher rates (e.g., 14% p.a. or more) but no collateral risk. You need to compare your options to find the best fit.
What happens if I want to pay off the outstanding balance early?
You can do this at any time, but check the fees you’ll pay – some lenders charge, some don’t. If you plan to repay early then it's best to look at loans that offer this free of charge. The easiest way to arrange early repayment is to contact the lender.
Do I need to take out insurance and where should I get it?
Yes, even if your car finance isn't secured, having insurance protects you from financial loss if you cause damage to another vehicle. Our car insurance guide outlines the best policies available.
How long does it take for an application to be assessed?
Many lenders offer same-day responses, so you'll be able to get a loan in principle for when you decide to go ahead with a car purchase. Some lenders even offer instant or same-hour approvals.
What happens at the end of the finance deal?
Nothing changes other than you stop making your regular repayment to the lender. Any security over the car will be discharged (either for free or at a fee). This means you will be free to sell the car later on without any complications.
What should I watch out for with "zero deposit" car loans?
Zero deposit loans mean you don't pay anything upfront, but they come with higher risks and costs. Your loan amount will include the full cost of the car plus interest, making repayments larger. Since you haven't invested anything upfront, you'll owe more than the car is worth (negative equity) as it depreciates. This could be a problem if you need to sell or refinance the car before the loan is repaid.
Important: We suggest reading an external guide, bad credit car loan refinance, if this applies to you, given the costs and risks of high interest car loans.
Important: We suggest reading an external guide, bad credit car loan refinance, if this applies to you, given the costs and risks of high interest car loans.
Can I refinance my car loan if I find a better deal later?
Yes, but it is expensive. Even though a lower interest rate might seem attractive, you are paying interest all over again and facing break fees or early repayment charges from the original lender.
Can I sell my car while it's under finance?
Yes, but it's complicated. If your car loan is secured, the lender holds a security interest in the vehicle, and you must repay the loan in full before transferring ownership to a buyer. You'll need to cover the shortfall if you sell for less than the loan amount. This trusted guide to selling a car under finance explains what you need to know.
What happens if I can't make my repayments?
If you miss repayments, lenders will almost always charge late fees, increase your interest rate, or repossess your car if you don't make repayments after a certain period. If you're struggling, do not delay talking to your lender - ignoring the problem and not making payments will worsen it.
Are 0%, 1%, 3% and 4% interest car finance offers from Toyota, Mazda, and other manufacturers and dealers too good to be true?
0% and low interest rate offers can be an excellent deal, but they are usually only available for new cars and often require a substantial deposit or shorter loan terms (e.g., 12-24 months). Furthermore, there are some limitations:
0% offers can be attractive if:
- Eligibility requirements: You'll typically need to be in a strong financial position with no negative credit history. The manufacturers may want to sell a car, but they restrict those who get 0% finance, given that they take the risk of repayment.
- Restricted models and pricing: 0% offers are often tied to specific models, and you may be unable to miss out on negotiating the purchase price, as the 0% interest is already factored into the deal.
- Fees: While there's no interest, some 0% loan offers charge loan setup, administration fees and early repayment fees, among others.
- Opportunity cost: New cars depreciate significantly, meaning a 0% interest rate won't offset the loss in value from buying a new car. This is why used cars are popular with sensible New Zealanders looking for an upgrade without paying for depreciation.
0% offers can be attractive if:
- You've already planned to buy a new car.
- You can comfortably meet the deposit and repayment terms, be aware (and accept) of the car's depreciation, and still see long-term value.
Why Pay 15% When You Could Pay 8%? NZ's Two Top Car Lenders
Fact: The average New Zealander overpays thousands on car and personal loans by not shopping around.
Our research identified two lenders consistently beating banks by 4-10% and known for fair rates and reliable service
Typical Example: $20,000 loan over 5 years:
Why waste money on high interest? The rate you lock in today determines how much you'll pay every single week.
Advertising Disclosure: We may earn a commission from loans, but our top picks are always based on rigorous research and your best interest.
Our research identified two lenders consistently beating banks by 4-10% and known for fair rates and reliable service
- Check your rate with Simplify’s Low-Rate Car Loan in under 2 minutes – customers save significantly, usually $50-$150+ per month, and Simplify receives rave reviews from our readers. Get your rate instantly.
- Harmoney: Offers an instant personalised rate. Check your rate.
Typical Example: $20,000 loan over 5 years:
- Major bank or car dealer: 14% p.a. = $465/month
- Challenger Lender: 9% p.a. = $415/month
- You may save: $50+ per month ($3,000 total over the life of the loan)
Why waste money on high interest? The rate you lock in today determines how much you'll pay every single week.
- Instant rate checks: It takes around 1-2 minutes - Simplify and Harmoney make it easy.
- No obligation: Checking won't affect your credit score or credit history
- Transparent: See your actual rate, not "rates from..."
Advertising Disclosure: We may earn a commission from loans, but our top picks are always based on rigorous research and your best interest.
9. Real Stories: When Car Finance Goes Right (and Wrong)
Getting a car loan has its risks and rewards. Below, we share stories from everyday New Zealanders to help you make the best decision for your needs and plan for the repayments.
1) Sophie's Smart Choice with Car Finance
Key Points:
Sophie shares her experience:
"I understood the importance of not overspending on a car. By finding a loan that fit my budget, I was able to comfortably manage my payments without sacrificing other financial goals".
Mike's Hasty Decision Leads to Car Finance Troubles
Key Points:
Mike shares his experience:
"I was so excited by the car that I didn't think about the long-term impact of the loan. The repayments quickly became a burden, affecting my overall financial health".
Learning from These Experiences:
1) Sophie's Smart Choice with Car Finance
- Sophie, a 32-year-old nurse from Dunedin, needed a reliable car for her daily commute. She carefully considered her budget and financing options.
Key Points:
- Loan Amount and Purpose: Financed $12,000 for a dependable, used car.
- Research: Sophie compared various lenders for the best interest rates and terms.
- Credit Profile: Good credit history, enabling her to secure a 9.50% p.a. interest rate.
- Repayment Plan: Chose a 5-year term, fitting comfortably within her budget.
- Outcome: Acquired a reliable vehicle for work without overstretching her finances.
Sophie shares her experience:
"I understood the importance of not overspending on a car. By finding a loan that fit my budget, I was able to comfortably manage my payments without sacrificing other financial goals".
Mike's Hasty Decision Leads to Car Finance Troubles
- Mike, a 27-year-old retail manager from Napier, was enticed by a new sports car. He rushed into a high-interest car loan without thorough consideration.
Key Points:
- Loan Amount and Purpose: Borrowed $35,000 for a new sports car.
- Impulsive Decision: Mike chose the first financing option offered by the dealership.
- Credit Profile: Good earnings, but some credit card debt resulted in a high interest rate of 19.99% p.a.
- Repayment Plan: Opted for a 5-year term, underestimating the financial strain.
- Outcome: Struggled with large monthly payments, impacting his ability to save and invest.
Mike shares his experience:
"I was so excited by the car that I didn't think about the long-term impact of the loan. The repayments quickly became a burden, affecting my overall financial health".
Learning from These Experiences:
- Consider All Aspects: Understand the total cost of ownership, including loan repayments, insurance, and maintenance.
- Don't Rush: Take time to research and compare different financing options.
- Fit Within Budget: Ensure the loan fits within your budget without compromising other financial obligations. Car loans need to be repaid month after month, so it's critical can afford that comfortably.
- Be Realistic: Choose a vehicle that meets your needs and is within your financial means.
10. Our Conclusion: Finance Smarter in 2026
Car Finance is relatively easy to obtain, but it has long-term costs. Before agreeing to any loan deal, please be aware of the following:
- It's easy to compare deals and get quotes; please spend time sourcing quotes upfront. You'll save money by doing so, whereas if you give the job to the car dealer, you'll probably pay a lot more and have nothing to compare with.
- Some car finance deals come with hidden costs and strings attached. Please read the fine print and understand all charges and potential future liabilities.
- Car finance, if not managed correctly, can have long-term impacts, and many people get into financial hardship when their car loan is unaffordable. Don't over-borrow - the risks are too high.
- While not always feasible, paying in cash is often the simplest and most transparent method, ensuring that there's no interest or additional charges to worry about in the future.
In partnership with Simplify, MoneyHub's favourite car loan broker
Thinking about finance? Compare every major lender in one go
If you're weighing up a car loan, it pays to see what's on offer before you walk into a dealer or your bank. With Simplify, a licensed New Zealand finance broker, you can compare rates and weekly repayments across all the major lenders at once.
Get my rate
Free quote, no obligation
All major car lenders
Feefo 4.9/5 (3,000+ reviews)
A decision in minutes
Trusted, award-winning broker
Popular with MoneyHub readers
Our View
- A fast way to see the spread of rates across lenders - better than applying to one lender blind.
- Look at the comparison rate, not just the weekly number. A low weekly payment over a longer term can cost you far more overall.
- Check the rate you're offered against your own bank before you sign.
- Simplify is one strong option, not the only place finance exists.
How this works. MoneyHub is independent. We're not a lender, broker or financial adviser, and nothing here is personalised financial advice. We've partnered with Simplify, a licensed New Zealand Financial Service Provider, and we earn a fee if you take out a loan through them. This never changes the rate or fees you're offered.
Rates & privacy
Quotes shown are indicative only. Your actual rate depends on your circumstances and currently ranges from 6.85% to 29.95% p.a.
When you request a quote, your details are shared with Simplify so they can assess your options, and if you proceed they may share relevant information with their panel of lenders.
Related Guides:
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Car Finance Company Reviews:
- Simplify Review
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- Toyota Finance Review
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- MTF Finance Review
- AA Money Review
- Better Finance Review
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Business Car Financing:
