A used car can be financed, but the loan often changes when the car does. The age of the vehicle and whether you buy from a dealer or a private seller can change the rate, the longest term and which lenders will consider the loan. This guide sets out what changes and what to check before you commit.
loan-o is a Brisbane finance broker based in Milton. We compare car and vehicle finance across a panel of 50+ bank and non-bank lenders. This guide is general information, so check the details of any offer and your rights as a buyer with your state's fair trading office.
Financing a used car: what to know before you buy
Dealer or private sale: what changes for the finance
Some lenders treat a private sale differently from a dealer purchase, particularly in how the car's condition, value and history are checked. A few finance products are only available for dealer purchases, so check this before you settle on a car. A private sale often means more paperwork from you.
Your rights as a buyer also differ between a dealer and a private seller. Check what applies in your state with the fair trading office before you buy.
How the car's age affects the loan
- A used car is generally seen as higher risk security than a new one, so lenders often charge a higher rate. The gap varies by lender and by how old the car is.
- Many lenders cap how old a vehicle can be by the end of the loan term. An older car may only qualify for a shorter term, which raises the regular repayment even before any rate difference.
- A used car loan with a higher rate but a shorter term can still cost less overall than a longer new car loan, or the reverse can be true.
Checks before you buy, especially in a private sale
If the car turns out to be different from what you described to your lender, the finance outcome can change.
- Get an independent inspection of the car.
- Ask for the service history, and the kilometres, in writing.
- Search the Personal Property Securities Register (PPSR) to confirm that no finance is owing on the car.
- Ask the lender what it needs for a private sale, such as a contract of sale and proof of the seller's details.
Where to find a used car
Digger's Marketplace, a sister site of loan-o, lists cars for sale from Australian suppliers. A listing is a starting point, so the checks above still apply. Digger's Marketplace is not a lender.
- Digger's Marketplace Cars for sale from Australian suppliers.
Deposit, trade-in and how the seller is paid
Many car loans do not need a deposit, but a lender can ask for one, particularly for older cars, higher kilometres, private sales or a thinner credit file. A trade-in works the same way as a cash deposit, because its agreed value is deducted from the amount you need to finance. For a private sale, ask how and when the seller will be paid before you agree to buy.
What the whole loan costs
Compare the repayment, the term, any balloon, fees and the total you will pay. On a personal car loan, the comparison rate folds in most fees alongside the interest rate, which gives a fuller picture than the advertised rate.
Questions to ask before you sign
- Will you finance a car of this age and with these kilometres, and for what term?
- Is there any difference in the loan because it is a private sale?
- What will the repayments be, including any balloon, and what is the total I will pay?
- What fees apply, now and at the end of the term?
- What happens if I want to pay it out early or sell the car?
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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. It should not be treated as personal financial, tax, legal or credit advice.
Last reviewed: 9 November 2026. 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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Yes, lenders do finance used cars. The age and kilometres of the car can change the rate, the longest term and which lenders will consider the loan.
Not necessarily, but some lenders treat private sales differently and check the car's condition, value and history more closely, and a few products are only available for dealer purchases. Check before you commit to a car.
A used car is generally seen as higher risk security than a new one, so lenders often charge a higher rate. Age limits can also mean a shorter term and a higher repayment.
Get an independent inspection, ask for the service history and kilometres in writing, and search the PPSR to confirm that no finance is owing on the car.
Not always, but a lender can ask for one, particularly for older cars, higher kilometres or private sales. A trade-in can be used the same way as a cash deposit.
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