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8 March 2022 | By Lending People

Know your options when buying your next vehicle

Purchasing a vehicle is a big commitment, which is why it’s important to know all your options, so you can make the decision that’s best for you

The freedom you feel when you get behind the wheel of your first car is such a fantastic thing. It changes your life. Suddenly, you are no longer bound to other people, relying on lifts or public transport to get places.

You have the ability to get yourself there, when you want, and the way you want. But, as always, when circumstances change, you may need to replace your vehicle with one better suited to your new needs. Whether that’s for work, because you have a new family to think of, or need something to get the dogs around in.

Know your options

If you’re in the market for a new vehicle, it’s important to know your options, and the pros and cons that go with them:

1. Buying new Some people’s ideal is to get a new car, straight from the manufacturer. While this may seem like the best way to ensure you get a pristine car with everything you need, there’s no two ways about it – a new car is expensive. And annoyingly, on average, it’s worth less as soon as you buy it. This can be offset by the manufacturer’s warranty period, meaning any issues or initial maintenance may be covered. But those warranties often come with prerequisite requirements and obligations to be applicable.


  • Brand new
  • Warranty cover
  • Latest in technology and safety systems


  • Very expensive
  • Depreciation, lowering your car’s value quickly
  • Warranty can be void if obligations aren’t met

2. Buying Used Unless you were quite lucky, most people’s first car is a family hand-me-down or a used car. The immediate draw of a used car is price – you’re usually getting a car at a fraction of what it once cost. But the reason it costs less is because it’s been out and about for a while, experiencing wear and tear. Older cars may also lack some of the latest life-saving features, like ABS brakes and air bags. There are ways to find safer cars, though. The Australian New Car Assessment Programme (ANCAP) ranks a model’s safety based on a 1 to 5 star rating, with 5 being the safest. The AA recommends you try to get the highest-rating car you can afford.


  • Lower cost
  • Proven vehicle
  • Lots of options to choose from


  • May not be as safe as newer cars
  • Potentially unknown faults, damage or service/maintenance records
  • May need replacement parts that are hard to source

3. Financing a vehicle An option that’s becoming more and more popular is vehicle financing. This allows people to buy newer and safer vehicles without having to pay the high prices a new car costs straight off the bat. Instead, they get a loan they use to buy the vehicle, then pay that loan off over a period of time that suits them. This way, you’re able to get a new car, with all the advantages it comes with like warranties and safety, without the cons of having to pay a large upfront cost. However, you are agreeing to make consistent repayments on this loan, and missing a repayment can have consequences.


  • You can get a new car without having to pay a large upfront cost
  • You’re likely covered by similar warranties that new cars get
  • Better safety ratings than a used car
  • For new cars, you’ll likely have lower maintenance and servicing costs


  • Missed repayments could lower your credit score, or even see the car get repossessed
  • You may not ‘own’ the car until the final repayment is made

Picking the right choice for you

It’s important you examine your own circumstances and decide what will best suit your needs. As you can see, there are pros and cons to new, used and financed vehicles.

If you’re considering a financed vehicle, make sure you reach out to our Advisers – we’ll be able to deliver unbiased, impartial advice that puts your needs first.

This blog is provided for general information purposes and is not a recommendation you enter into or exit any particular loans or insurance policy. Information on the website does not consider your particular circumstances, including your objectives, financial situation or needs. We recommend you seek advice from a financial adviser before taking any action as appropriate. The Lending People Limited (FSP240365) is a licensed financial advice provider and can provide advice on some types of personal loans. Find out more about The Lending People and how we may be able to help you.

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¹All approvals are subject to responsible lending inquiries. If you sign your loan contracts before 3:00 pm on a weekday, you will receive the funds on the same day. While bank processing times differ, funds usually show up in your account by early evening.

²Annual Interest Rate (AIR) and Annual Percentage Rate (APR): Unsecured interest rates range from 13.90% p.a. to 23.90% p.a.

³Minimum and Maximum Repayment Terms: Repayment terms range from 1 year to 5 years.

⁴Fees: Where Lending People is the creditor, we charge a $174 establishment fee. Lending People does not charge a monthly fee or early repayment fee. Where another provider is the creditor, provider-specific establishment fees, monthly fees, and early repayment fees may apply.

⁵Terms and Conditions: Our services are provided in accordance with our Application Terms & Conditions.

Representative Example of the Total Cost of a Loan: If you borrow $10,000 over a repayment term of 36 months at an AIR of 14.95% p.a., your total repayments will be $12,631.60 (made up of $10,000 principal, a $174 establishment fee, and interest charges of $2,457.60). This example is based on amortised scheduled weekly repayments with a fixed interest rate for the term of the loan.

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