Vehicle loans, often referred to as car loans or auto loans, are very popular as an alternative to the financing offered by most car dealerships. Find out more below...


What is a Vehicle Loan?

A vehicle loan is a loan designed to help you purchase a car or other vehicle. This type of loan is offered by independent lenders and there are many to choose from, mostly online. Vehicle loans are an alternative to the financing offer which your car / vehicle dealer might provide.

Many people argue that an independent lender could offer a better interest rate and loan terms than a car dealer might but this is up to your discretion. Use a comparison site like this to look at all the different features offered by each lender or loan broker and compare these with the offers from your car dealer.

What Types of Vehicle Loans Can I Find?

There are various types of car loans, including:

  • Personal loans (unsecured borrowing)
  • Secured loans (car used as collateral for the loan)
  • Business loans
  • Bad credit loans
  • Loans for all vehicle types: cars, motorcycles, marine vehicles (boats, yachts), caravans and historical vehicles.

As you can see there are many loans to choose from so it is worth spending some time going through your options before you make an application.

Where Can I Apply?

You can apply for car and other vehicle loans on the internet. There are plenty of independent lenders and banks that offer their loans online, with simple application forms. An alternative is to go via a loan broker; they can search the loan market on your behalf to find you the most suitable loan.

You can find many vehicle loan types on Which Way To Pay New Zealand, and if you have found one which suits you, you can apply via the site. By clicking on the blue More Info button on our comparison charts, you will be taken through to the next simple steps set out by each lender / provider. However, you are not in any way obligated to apply you can simply request information.

Leasing VS Purchase

Often you will be given the option to buy or lease your car. What exactly does car leasing mean?

Both leasing and purchasing present a way of financing a vehicle: by leasing a car, you are essential financing the use of it while a purchase means you are actually buying the vehicle.

By purchasing a vehicle you are paying for the full cost of it and the amount of miles you drive in the car will not have an effect on the cost. A purchase involves a down payment and tax is usually added to the loan (though you can opt to pay in cash). Interest is of course also added to the loan and this is usually determined based on your credit history so be prepared for a full credit check.

By leasing a car, you are not paying the entire cost of the vehicle you are just paying a percentage of it. Some people think leasing is the same as renting, but by leasing a car you are not renting it. Usually you are given the option to pay a down payment and you may be asked to pay a security deposit. By the end of the lease period, you are usually given the option to buy the vehicle in full at its 'depreciated' value, or to return the car to the dealer.

Generally, leasing a car is seen as a good option if you want lower monthly payments and like to change your car every few years. Buying is seen as a more beneficial option if you want to really own your car and don't mind paying slightly higher instalments each month. Purchasing could also be a better option if you drive more miles than the average level.


Please note that Which Way To Pay New Zealand ( is not authorized to give personal financial advice under New Zealand's financial services regulations, including the Financial Advisers Act (Securities Commission New Zealand).

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