A car loan is a type of personal loan used for buying a vehicle such as a car, ute or motorbike. This can be a handy way to cover the upfront cost of a vehicle if you don’t have the full amount saved. You can then repay the cost of the vehicle with interest over a set period of time.
So how many Australians take out car loans to finance their new ride, and how much do they owe? We used data from Finder’s Consumer Sentiment Tracker along with external data to take a closer look at the state of car loans in Australia.
How many Australians have a car loan?
According to Finder’s Consumer Sentiment Tracker, a live survey of over 12,000 respondents, around 14% of Australians currently have a car loan as of March 2021. That’s equivalent to 2.7 million people.
Around 19% of Australians have previously taken out a car loan to purchase a vehicle at some point.
How much are Australians borrowing on average?
Research by loan provider Plenti shows that the average car loan size in Australia is approximately $31,738.40. Those who take out a car loan are more likely to purchase a used car (70%) than a new one (30%).
Meanwhile, ABS figures from January 2021, show that new vehicle lending is currently at $1.2 billion, as of January 2021, increasing from $1.1 billion in January 2020.
Source: Australian Bureau of Statistics, Lending indicators January 2021
Car loans by age group
Millennials are the most likely to have a car loan, with a quarter of people in this age group (25%) currently paying off their vehicle in instalments. This is followed by 26% of gen Z.
Baby boomers are the least likely to have a car loan, with just 2% currently paying off their vehicle.
Source: Finder’s Consumer Sentiment Tracker survey of 12,175 respondents, March 2021
Car loans by location
Motor finance customers are the most likely to live in New South Wales, where 18% of residents have a car loan. This is followed by 16% of both Western Australian and Queensland residents.
South Australians are the least likely to rely on finance to purchase a vehicle. Here, just over 1 in 10 residents (11%) currently have a car loan.
Source: Finder’s Consumer Sentiment Tracker survey of 12,175 respondents
How many new cars were sold in Australia in 2020?
According to the Federal Chamber of Automotive Industries (FCAI), 916,968 new vehicles were sold nationally in 2020. This has dropped by 13.7% from 1,062,867 new vehicle sales in 2019.
This decline in vehicle sales can largely be attributed to the financial impact of COVID-19 on both household spending and new lending.
Source: Federal Chamber of Automotive Industries (FCAI)
Vehicle popularity in Australia
FCAI’s research also shows that sports utility vehicles (SUVs) have significantly increased in popularity over the past year. SUVs claimed 46.9% of the market during 2020, with 454,701 new vehicles sold. This is an increase of 45.5% since 2019.
Light commercial vehicles continue to remain popular in Australia, with a 22.4% market share in 2020 (205,597 vehicles sold). Passenger vehicles also accounted for 24.2% of the market in 2020 (222,103 vehicles sold).
| Class | Jan-20 | Feb-20 | Mar-20 | Apr-20 | May-20 | Jun-20 | Jul-20 | Aug-20 | Sep-20 | Oct-20 | Nov-20 | Dec-20 | TOTAL |
| Passenger | 20,504 | 22,660 | 21,783 | 9,158 | 13,839 | 25,043 | 18,156 | 14,758 | 17,720 | 17,794 | 20,711 | 19,977 | 222,103 |
| SUV | 35,383 | 39,273 | 39,162 | 18,022 | 28,649 | 51,924 | 36,553 | 32,378 | 32,647 | 41,220 | 50,016 | 49,474 | 454,701 |
| Light commercial | 14,035 | 15,542 | 18,165 | 9,436 | 14,791 | 28,645 | 14,898 | 11,234 | 15,772 | 19,152 | 21,252 | 22,675 | 205,597 |
| Heavy commercial | 1,809 | 2,465 | 2,580 | 2,310 | 2,615 | 4,622 | 2,898 | 2,616 | 2,846 | 3,054 | 3,226 | 3,526 | 34,567 |
| Total | 71,731 | 79,940 | 81,690 | 38,926 | 59,894 | 110,234 | 72,505 | 60,986 | 68,985 | 81,220 | 95,205 | 95,652 | 916,968 |
Source: Federal Chamber of Automotive Industries (FCAI)
What brands are the most popular in Australia?
In 2020, the brand with the most sales was Toyota, which sold 204,801 vehicles in total and maintained a market share of 22.3%. This was followed by Mazda, with 85,640 vehicles sold, and Hyundai (64,807 vehicles sold).
Source: Federal Chamber of Automotive Industries (FCAI)
Car loan customers are satisfied on the whole
According to Finder’s research, the majority of car loan customers (60%) feel they’re getting good value for money on their current loan product. Despite this, 1 in 4 customers (25%) think they could be getting a better deal elsewhere, with 16% switching car loan providers within the past 6 months, and 29% switching within the past month.