How Many People In Australia Take Out Car Loans?
There’s no denying that cars are a big expenditure. In fact, aside from your home they are probably the biggest purchase you’re likely to make. Millions of Australians purchase cars every year – and a huge number of them do it with car loans.
What is a car loan?
A car loan refers to a personal loan, which is taken out with the purpose of buying either a new or used motor vehicle. Usually, the loan is paid back over a period of between two and seven years. Car loans can be secured or unsecured.
How many people take out car loans?
The majority of people in Australia who purchase a car will take out a car loan.
In 2017, 90 per cent of all car sales were arranged through finance. This was split between loans from dealers and those from other sources.
Around 40 per cent of car loans in Australia were arranged through dealerships with the remainder of people using other sources for their loans.
The reason that car loans are so common is that buying a car outright requires a lot of cash upfront. Most people either don’t have access to this kind of money or find it far more manageable to pay the cost of the car back in smaller monthly instalments.
What types of vehicles are bought using car loans in Australia?
Car loans are used by Australians on a daily basis for different types of vehicles, both new and used. In 2017, the statistics for car loans in Australia looked like this:
- Around 25% were for new cars for personal use
- Approx 20% were for used cars for personal use
- Around 45% were used for commercial vehicles
Car trend forecasters have noticed a huge rise in the number of SUVs and utes in recent years. This could be reflected in the loans used by Australians who are wanting bigger vehicles with more features and high-quality design.
It’s useful to be aware of the different types of loans, which include:
If you’re feeling overwhelmed by the number of options on offer, speak to Positive Lending Solutions to find out which is the best car loan for you. We can discuss options with you and will help guide you in the right direction to finding the perfect car loan.
Finance commitments of car loans in Australia
Did you know that new finance commitments for motor vehicles last year were estimated at over $35 billion? Car loans in Australia are incredibly common.
This figure equates to approximately four per cent of all new finance commitments – with others including housing, leases, and commercial.
Finance commitments for motor vehicles equated to approximately two per cent of nominal GDP in 2017.
Interestingly, car loans are seen as the biggest expense related to vehicles and are higher than maintenance, repair, and fuel costs.
Lenders and car loans
It’s important to be aware of the people involved in a car loan, these include:
- Car dealers
- Finance companies
- Finance brokers
One of the advantages of working with car loan brokers is that we have access to a wide range of lenders offering different types of loans and working with people in a variety of situations.
We can search for the right lender for you and save you time and money by quickly and efficiently finding the best car loan for your situation.