Compare the Best Car Finance Offers - February 2025
Avoid paying too much when applying for car finance, with offers from around 9% p.a. We outline the latest deals and compare alternatives such as leasing, balloon payments, paying in cash and the best offers from trusted lenders.
Updated 2 February 2025
Summary
In this guide, we look at the fundamentals of car financing and reveal the best deals currently available. We cover:
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 is Car Finance?
- Different Car Finance Options Compared - Car Finance vs Leasing vs Balloon Payments vs Credit Card vs Paying Cash
- Our 8 Essential Car Finance Tips and Facts
- Ten Must-Know Car Finance Facts
- What You'll Need to Apply for Car Finance
- The Best Car Finance Offers - Banks, Finance Companies and Specialist Lenders
- Frequently Asked Questions
- Examples of Car Finance - When it Goes Right, and When it Goes Wrong
- Our Conclusion
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:
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:
|
Christopher Walsh
MoneyHub Founder and Head of Research |
Know this first: Car finance can be expensive - researching car finance options will save you money
Disclaimer:
- Shopping for a car involves visits to showrooms, searching Autotrader.co.nz, Driven.co.nz and Trade Me and asking friends for their input, and for most people, it's an exciting time. However, frustratingly, few people invest the same time in finding the best car finance deal.
- Car financing options range from great deals to ripoffs - get the wrong financing and you could be stuck with crippling monthly payments for a long time.
- The right car finance for your needs is important - what you may have saved negotiating the price of your new car can easily be lost in a few months of expensive car repayments.
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.
Christopher Walsh
MoneyHub Founder |
MoneyHub's Top Car Finance Options - Avoid high interest rates and fees with our trusted lenders.
|
Current Car Lending Offers
Know this first:
- 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.
Enter Loan Information
Amount to Borrow
Repayment Period (Months)
Repayment Frequency:
1. 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:
2. ​Different Car Finance Options Compared - Car Finance vs Leasing vs Balloon Payments vs Credit Card vs Paying Cash
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.
Christopher Walsh
MoneyHub Founder |
MoneyHub's Top Car Finance Options - Avoid high interest rates and fees with our trusted lenders.
|
3. Our 8 Car Finance Tips to Help You SAVE
- Get car financing agreed in principle BEFORE you starting looking for a car – you’ll save the most on fees and interest costs and know exactly what your budget is. You can also negotiate the price you pay like a cash buyer - it makes everything easier.
- Without question, the WORST place to get financing is at a car dealership just after you’ve decided on a car. You have no bargaining power, nor will you be familiar with other options in the market.
- The cheapest interest rate deals will be on secured loans – this means the lender has a right to sell your car if you can’t make the repayments (exactly like a bank can sell a house if the mortgage isn’t repaid).
- To pay the least amount in car financing, you’ll need the lowest interest rate, lowest application fees and the shortest term with the most frequent repayments (i.e. weekly vs monthly). i.e. If your loan is $10,000 and your interest rate is 15%, you’ll pay $4,000+ in interest if you pay it back over 5 years, but only $1,600 if you pay it back in 2 years.
- Most car finance terms are up to 5 years in length. Early repayment will slash the interest costs, but check the lender’s fees and charges to know how much that will cost.
- Avoid adding a car loan to your mortgage if you can help it – you’ll pay interest on the amount for a lot longer which costs you more in the long run. For example, a $10,000 loan at 7.50% over 25 years is much more costly than a $10,000 at 12.95% over three years.
- Missing repayments gets costly – lenders charge $25+ for each missed payment, so prioritise your repayments.
- See our cheapest car finance and loan tables to pick from the best deals currently available - and visit our personal loans guide to compare
4. Ten Must-Know Car Finance Facts
Car finance is a commitment to repay for an agreed-upon time-frame
|
The finance deal with the lowest interest rate is usually the best option, but be aware of upfront feesTo 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. |
Make sure car finance is right for your income and spending habitsCar 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:
Watch out for:
|
Car finance is offered by a lot of different companiesCar 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:
Buying a new car from a manufacturer-dealership?
Buying a used car from a manufacturer-dealership? Just like a new car, if you’re buying a used car from a manufacturer-dealer, it’s also worth looking at their in-house finance options. |
​Avoid high-interest rates by making sure your finances are in orderThe interest rate you will pay will be determined by a few factors, which we detail below.
Figures provided by our Loan Amortisation Calculator
|
Make your repayments more manageableThere are a few ways to reduce your the amount you repay on car financing:
|
Don't delay acting if you notice a problem with the car
|
Know the consequences of missing a car repaymentGenerally, 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. |
Get your details organised once you know you want to proceedWhen you have found a loan that you can afford and that offers a competitive interest rate, you can apply through the lender’s website or over the phone. You will need to confirm:
Once submitted, the lender will assess your application and run a credit check on you. The lender will then make a decision and notify you; if you’re successful, you will be told the loan amount and interest rate. To be eligible to sign the loan contract, you must:
The vehicle you intend to purchase should:
|
Get familiar with our car finance checklist to help your finances stay healthyBefore committing to any car loan or finance deal, it is essential to be cautious about what you can afford - being stuck with unaffordable monthly repayments is a fast road to misery.
|
Christopher Walsh
MoneyHub Founder |
MoneyHub's Top Car Finance Options - Avoid high interest rates and fees with our trusted lenders.
|
5. What You'll 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.
6. Best Car Finance Offers - Banks, Finance Companies and Specialist Lenders
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:
Simplify
|
Harmoney (Secured Car Loans)
|
Better Finance
|
Co-operative Bank
|
AA Money
|
MTF Finance
|
ANZ Bank
|
ASB Bank
|
Finance Direct
|
GEM
|
Geneva
|
Marac
|
Unity (NZCU BayWide)
|
UDC
|