Many Australian car loans do not require a deposit at all - lenders will finance the full purchase price for an eligible vehicle and borrower. Where a deposit is required or chosen voluntarily, it is commonly somewhere between 10% and 20% of the vehicle price, though the exact figure depends on the lender, the vehicle's age and your credit profile.
Why some car loans need no deposit
Because the vehicle itself secures the loan, many lenders are comfortable financing 100% of the purchase price for newer cars bought from a dealer, provided the borrower meets standard credit and income criteria. This is especially common for personal and business car finance structured as a chattel mortgage, where the vehicle is the security from day one.
When a deposit is more likely to be required
- Older or higher-kilometre vehicles, which some lenders see as higher risk
- Private sales, which can carry less certainty around condition and value
- Thinner credit files or a shorter time in a current job or business
- Larger loan amounts relative to the borrower's income or turnover
What a deposit actually changes
Putting down a deposit reduces the amount you need to borrow, which has a few flow-on effects worth understanding before you decide how much (if any) to put down:
- Lower regular repayments, since you are financing less
- Less total interest paid over the life of the loan
- A lower loan-to-value ratio (LVR), which some lenders weigh when assessing risk and pricing
- Reduced risk of owing more than the car is worth in the loan's early years
A trade-in vehicle can be used the same way as a cash deposit - its agreed value is simply deducted from the amount you need to finance.
Deposit vs balloon payment: two different levers
A deposit and a balloon payment pull in opposite directions. A deposit reduces your loan amount upfront and lowers total interest. A balloon payment lowers your regular repayments but leaves a lump sum owing at the end of the term. Some borrowers combine a smaller deposit with no balloon for a straightforward, fully amortising loan; others prefer a smaller deposit and a balloon to keep repayments lower along the way. Neither is right or wrong - it depends on your cash flow and how long you intend to keep the vehicle.
The takeaway
Do not assume you need a deposit to get approved - many borrowers do not put one down at all. But if you can, a deposit of around 10-20% will typically lower your repayments, reduce total interest, and reduce the risk of negative equity early in the loan. The right amount depends on your situation, not a fixed industry rule.
Finance is subject to lender approval, lending criteria, terms, conditions, fees and charges. The information in this article is general and does not take into account your personal or business needs.
Last reviewed: 1 September 2026. This article was prepared using information available from the Australian Securities and Investments Commission and Moneysmart. This content provides general information only. It should not be treated as personal financial, tax, legal or credit advice.
Frequently asked questions.
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Not always. Many lenders approve car loans with no deposit at all, especially for newer vehicles, provided the loan amount fits your borrowing capacity and the lender's criteria.
There is no fixed rule, but 10-20% of the vehicle price is a common range. A larger deposit reduces your loan amount, which usually lowers your repayments and the total interest paid over the loan term.
Yes. A trade-in vehicle's value can be applied against the purchase price the same way a cash deposit would, reducing the amount you need to finance.
It can, depending on the lender. A larger deposit lowers the loan-to-value ratio (LVR), which some lenders factor into their risk assessment and pricing - but it is not guaranteed across every lender and product.
They solve different problems. A deposit reduces the loan amount from the start and lowers total interest. A balloon payment reduces regular repayments but leaves a lump sum owing at the end. Some borrowers use a smaller deposit and no balloon; others do the opposite. It depends on your cash flow and how long you plan to keep the vehicle.
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