If you're shopping for a used car in Queensland, the finance side of the deal is rarely as straightforward as the sticker on the windscreen suggests. Used cars get financed by a different mix of lenders than new cars, with different rate structures, different age caps, and different rules for dealer versus private sale. After 8 years brokering car loans across the state, here's what I tell every customer before they sign anything.
Why used cars complicate financing
The fundamental issue with used-car finance is depreciation. The lender has to estimate what the car will be worth at the end of the loan term, because that's their fallback if you stop paying. A new car has predictable depreciation. A 5-year-old Camry has predictable depreciation. A 12-year-old project ute has not-very-predictable depreciation.
That's why used-car loans get assessed against three things the dealer doesn't usually mention:
- Age at end of loan term. Most lenders cap at 12–15 years old at end of term. A 5-year loan on a 7-year-old car works at most lenders. A 7-year loan on a 9-year-old car gets harder.
- Make and model. Mainstream Toyotas, Mazdas and Hondas hold value predictably. Specialist or low-volume European cars don't, and lenders price the risk accordingly.
- Kilometres and condition. Most lenders set soft caps around 200,000–250,000 km depending on the vehicle.
A broker doesn't make these caps go away — but knowing which lender writes which combination of age, make and km is most of the job.
Dealer vs private seller — does it really matter?
For finance purposes, less than you'd think.
Most major lenders (the major banks plus most non-banks) write dealer purchases and private sales on equivalent terms. The interest rate doesn't change based on where the car came from. What does change is the paperwork and the timing.
Dealer purchases. Dealer provides the tax invoice, transfer paperwork, roadworthy certificate (where required) and any prior-finance payouts. Settlement usually happens 1–2 days after lender approval — you drive away straight from the lot.
Private sales. You become responsible for verifying that the seller has clear title (no outstanding finance encumbrance — check PPSR), that the rego is current, and that there's a roadworthy where required. Settlement happens by EFT directly to the seller after we verify the chassis number and registration. Adds a day or two but doesn't change the rate.
Where dealer purchases can become more expensive is in the dealer's finance offer — which is a separate question from the car itself. The dealer's finance department is paid commission on the loan, and the rates are usually 1–3 percentage points above what an independent broker can write on the panel. So: buy from whoever has the right car at the right price, but get the finance independently.
Loan amount caps and how depreciation affects what you can borrow
Most lenders write up to 100% of the car's market value for newer cars (typically 0–5 years old). For older cars, the loan-to-value ratio (LVR) tightens — lender might cap at 90%, 80%, or in some cases 70% of the assessed market value.
What this means in practice: if you're buying a 9-year-old ute for $32,000 cash, the lender might value it at $28,000 and lend $25,000. You'd need to bring $7,000 cash or a trade-in to settle. This is one of the most common surprises in used-car finance, and it's worth knowing before you put down a deposit.
A broker can usually find the lender with the most generous valuation methodology for your specific car — but the math doesn't change: older car = lower LVR.
What to ask before you sign
Five questions worth asking before you commit to either the car or the finance:
- What's the all-in rate, including the comparison rate? The headline interest rate doesn't include lender establishment fees, monthly fees, or PPSR fees. The comparison rate combines them so loans are easier to compare. Ask for both.
- Is there a balloon or residual payment? Some lenders structure loans with a lump sum at the end (a balloon) which makes monthly payments lower but costs you more in total interest.
- What are the early-payout penalties? Some loans charge a discharge fee if you pay out early; others don't. If you're likely to refinance or pay early, this matters.
- Is the loan secured against this car or against you? A secured car loan (against the vehicle) carries a lower rate. An unsecured personal loan for a car (against you) is more expensive. Always ask which you're being offered.
- Who's actually lending you the money? Especially with dealer finance — the dealer is the introducer, but the lender behind the deal is what matters for terms, conditions and customer service.
Used car finance FAQs
Can I finance a used car older than 10 years?
Often yes, but the lender shortlist narrows. Specialist non-bank lenders (Pepper Money, Liberty, FinanceOne) write older cars more confidently than major banks. Rates are slightly higher to reflect the depreciation risk.
Will I get a better rate from a dealer or from a broker?
Almost always from a broker. Dealer finance is a profit centre — the dealer's finance department is paid commission and tied to one or two lenders. A broker works a 40+ lender panel for the sharpest rate available for your file.
Do I need a deposit for a used car loan?
For newer used cars (0–5 years), often no — most lenders write 100% finance. For older cars, you may need a deposit or trade-in to bring the loan-to-value ratio inside the lender's policy. We can quote both ways before you commit.
Can I finance a private-sale used car?
Yes, on essentially the same terms as a dealer purchase. The process needs clear title (PPSR check), current registration, and a roadworthy certificate where required. Settlement happens by EFT to the seller after we verify the asset.
How long does used-car finance take to settle?
Clean files: indicative rate the same day, formal approval inside 48 hours, settlement 1–2 days after that. Private sales add a day or two for title verification. So roughly 3–5 business days end to end.
The short version
Get a broker quote before the dealer talks you into their finance. Make sure the rate quoted is for a secured car loan, not an unsecured personal loan. Check the comparison rate, not just the headline rate. And know the lender's age and LVR caps before you put down a deposit on an older car.
Need a real rate on a used car you're shopping for? Call us on (07) 3130 1674 or drop your details — usually back to you the same day.