Finance the vehicle without letting the right one drive away.
Cars, motorbikes and other vehicles do not always appear on a convenient finance timetable. Loan Location can help you compare whether a personal loan could provide the flexibility you need while keeping the repayment, fees, loan term and total cost clear.
Quick answer
What is a vehicle purchase personal loan?
A vehicle purchase personal loan is a personal loan used to buy a car, motorbike or another acceptable vehicle. Depending on the lender and product, the loan may be secured against the vehicle or provided on an unsecured basis.
Personal loans may appeal to buyers who want flexibility around private sales, used vehicles or vehicle types that do not fit standard dealer-finance rules.
What can it fund?
Common vehicle purchases
Personal loans may be used for a variety of vehicle types, subject to the lender accepting the purpose and the borrower meeting its lending criteria.
Cars
New or used vehicles purchased privately or through a dealership.
Motorbikes
Road bikes, touring bikes and other acceptable motorcycle purchases.
Vans & utilities
Vehicles for personal use or mixed-use situations where acceptable to the lender.
Four-wheel drives
Newer or older 4WD purchases, depending on lender and security requirements.
Caravans
Caravans, campers and other approved recreational purchases.
Boats
Certain boats and marine purchases where the lender accepts the loan purpose.
Older vehicles
Personal loans may offer flexibility where standard secured vehicle finance has age limits.
Classic or collector vehicles
Specialist or older vehicles that may not fit ordinary car-finance security rules.
Why some buyers use them
Flexibility can matter when the right vehicle appears
Vehicle purchases do not always happen through a dealership. A buyer may find the right car through a private seller, an enthusiast group, an auction or another channel where dealer finance is not available.
A personal loan may provide flexibility around where the vehicle is purchased and, depending on the lender, may be suitable for older or less conventional vehicles.
Speed should not replace comparison: acting quickly can be useful, but make sure the repayment, fees, loan term and total borrowing cost still suit your budget.
Funding pathways
Personal loan or traditional car finance?
Both can fund a vehicle purchase, but the structure, security requirements and purchase rules can be quite different.
Potentially more flexible
- May suit private-sale purchases
- Can be secured or unsecured
- May accommodate older or unusual vehicles
- Funds may be available for approved related costs
- Unsecured pricing may be higher than secured vehicle finance
Designed around the vehicle
- Often secured directly against the vehicle
- May provide lower pricing where security is acceptable
- Vehicle age and condition rules may apply
- Dealer finance can be convenient at point of sale
- Product features and balloon structures may vary
Loan structure
Secured or unsecured personal loan?
The vehicle supports the loan
- The lender takes security over an acceptable vehicle
- Pricing may be lower than unsecured lending
- Vehicle age, type and value restrictions may apply
- The lender has rights over the asset if the loan defaults
Greater vehicle flexibility
- No specific vehicle is pledged as security
- Can suit some older or non-standard vehicles
- Rates may be higher than secured lending
- Approval still depends on credit and serviceability
The cheapest-looking loan is not automatically the best fit: security rules, fees, loan term, early repayment conditions and the vehicle itself all need to be considered.
Before you borrow
Important things to consider
Secured vs unsecured pricing
Rates can differ significantly depending on whether the lender has acceptable vehicle security.
Loan term
A longer term can reduce the regular repayment but may increase the total interest paid.
Fees and charges
Establishment, monthly, early payout or other lender fees may affect the overall cost.
Vehicle depreciation
Vehicles generally fall in value over time, so the loan term should be considered alongside the expected useful life and value of the vehicle.
Other funding options
Alternatives to a vehicle purchase personal loan
Personal loans are only one way to fund a vehicle. The most suitable option depends on the vehicle, employment arrangements, purchase method and broader financial position.
Dealer finance
Convenient at point of sale, but the rate, fees, balloon payments and total cost should still be compared independently.
Novated lease
May be available through some employers. Tax, payroll and vehicle-use implications should be discussed with appropriately qualified advisers.
Savings or part-cash purchase
Using savings or contributing a larger deposit may reduce the amount that needs to be financed.
How Loan Location helps
Start with the vehicle, then choose the finance
You do not need to decide in advance whether you want a secured personal loan, unsecured personal loan or another vehicle-finance product.
Loan Location can help compare the options based on the vehicle, purchase price, how you are buying it, your repayment comfort and the lender rules that apply.
Define the purchase
Identify the vehicle, purchase price, seller type and any related costs.
Review your position
Consider income, expenses, existing debts, deposit and comfortable repayment.
Compare suitable options
Review secured and unsecured personal lending and other relevant vehicle finance.
Choose the structure
Compare rates, fees, security, term and total cost before proceeding.
Common questions
Vehicle purchase personal loan FAQs
Can I use a personal loan to buy a car privately?
Potentially. Personal loans may be used for private-sale vehicle purchases, subject to lender policy, loan purpose and approval.
Can I use a personal loan to buy an older car?
Potentially. Some personal loans may provide more flexibility for older vehicles than secured car-finance products with strict vehicle-age limits.
Is a secured vehicle loan cheaper than an unsecured personal loan?
It may be priced lower because the lender has acceptable security, but the actual rate depends on the lender, borrower, vehicle and product.
Can I use a personal loan for registration or insurance as well?
Potentially. Some lenders may allow approved related costs to form part of the loan purpose, subject to their policy and loan limits.
Can I get a personal loan for a motorbike, caravan or boat?
Potentially. Acceptable purposes and security rules vary between lenders, so the type, age and value of the vehicle may affect the available options.
How much can I borrow for a vehicle?
The amount available depends on the lender, your income, expenses, liabilities, credit position, loan purpose, vehicle and serviceability.
Found the vehicle you want?
Tell Loan Location what you are buying, how much it costs and whether the purchase is through a dealer or private seller. We can compare suitable finance options and explain the differences before you commit.
Note: This is general information only and does not take into account your personal objectives, financial situation or needs. Lending criteria, rates, fees, approval timeframes and product availability can change. Approval remains subject to lender assessment. Vehicle eligibility, security requirements and acceptable loan purposes vary between lenders. Tax implications of novated leasing or business vehicle use should be discussed with an appropriately qualified adviser.