How to Choose The Right Car Loan in NZ


Many great things come with getting a new car: updated technology, a feeling of accomplishment, that new car smell, and the ability to accommodate a growing family. Regardless of the reason for purchasing a car, it’s important to consider the available options for car loans in New Zealand.

It is almost as important to the car-buying process to research the best car loans out there as it is to carefully think through which car to purchase. While many consumers cannot cover the full cost of a new car without taking out a loan, they also should not overpay by choosing the wrong loan option.

This guide will explain all there is to know about car loans, which companies offer them, and how to find the best ones out there. Because every person’s situation is unique, the loan process is also unique in each case.

What is a Car Loan?

A car loan is a lump sum of money that a borrower receives from a lender for the express purpose of purchasing a vehicle. This money is paid back to the lender over time, with interest. Borrowers take out car loans so they can purchase their vehicles immediately, without having to save for months.

The Benefits of Taking Out a Car Loan

While car loans might not fit everyone’s needs, they can help many types of consumers in various ways.

  • There are a lot of lenders to choose from. Because of this, it is easy to find a lender for a car loan.
  • A buyer can drive off the lot immediately. Borrowers do not have to wait until they’ve saved up enough personal capital before taking their new cars home. As soon as they’ve signed for the loan, they can drive their new vehicle off the lot and pay for it over time.
  • The car doesn’t remain in the lender’s claim forever. Once the loan is paid off, the car is owned outright by the borrower.

The Risks of Taking Out a Car Loan

It’s important to know the risks ahead of time to better understand the requirements for a car loan. These risks could determine if a car loan is really the best option.

  • Interest rates can be high. Interest payments mean the borrower will end up paying a lot more than the original price for the car over time.
  • Car loans may require a co-signer. A co-signer could be required if the borrower’s credit does not meet the minimum requirements.
  • The vehicle will be used as collateral against the loan. If a borrower defaults on the loan, the car can be used as collateral, and the lender can seize the vehicle as a form of payment.

10 Best Car Loans in New Zealand

Purchasing a car can be exciting. But before heading out to purchase that perfect car, decide what would be the best option amongst these best car loans in NZ.

1. Simplify

Simplify is an online company that acts as a middle man for borrowers looking for the best auto loans. It compares and negotiates with different lenders to find the best rates. It also offers negotiating services for borrowers, so that there is no pressure to haggle for the best deal.

Interest rates and fees: Interest rates vary from 7.5% up to 14.5%. Additional charges include an establishment fee of $276, a $500 referral fee, and a $10 registration fee.

Requirements: To apply for a loan, applicants must be at least 18 years old, be citizens or permanent residents of New Zealand, and make at least $500 per month.

How to apply: Fill out the quick quote form to get started with the application process with Simplify. An email containing the final quote will be sent out, and borrowers can choose to continue the process from there.

2. CarFinance2U

CarFinance2U, also known as CF2U, which provides car financing and insurance, will consider borrowers with bad credit who are applying for auto loans. CF2U provides loans for most credit levels. Borrowers can purchase from any dealer they choose, and CF2U will finance them upon approval.

Interest rates and fees: Current car loan rates and fees will be provided after requesting a quote.

Requirements: To apply, applicants must show a current driver’s license in addition to providing the last 30 days of their banking statement.

How to apply: Complete an application in as little as five minutes, and receive an answer as soon as 30 minutes later.

3. CarPow

CarPow is an online car loan service that offers second chance financing (meaning that if an applicant has bad credit, he or she still has a chance to get approved with CarPow). It offers direct payouts, so borrowers can receive a vehicle within 24 hours. CarPow negotiates rates and terms on the borrower’s behalf.

Interest rates and fees: Rates fall between 7.95% and 23.95%. There is a broker fee of $995, a credit check charge of $19.49, and an establishment fee of $495. There are other possible administrative charges, as well.

Requirements: A combined income of at least $500 per week is required. Bank statements are needed at the time of application, to verify income and expenses. A valid driver’s license is required of the applicant or a co-borrower.

How to apply: Fill out the application form on the CarPow website to begin the process for being approved for car loans with bad credit.

4. Lending Crowd

Lending Crowd is a peer-to-peer lending platform that removes the need for a financial institution. Borrowers looking for car loans in NZ can use Lending Crowd to be matched with a lender who is willing to help them with financing. Lending Crowd doesn’t penalize borrowers for making early repayments.

Interest rates and fees: Rates can be as low at 5.03% and go up to 20.26%. Depending on the loan amount, the platform fee starts at $200 and goes up to $1,450.

Requirements: Applicants must be 18 years old or older to apply. Proof of NZ residency is required. Applications must also include bank statements, to demonstrate income stability.

How to apply: Apply with Lending Crowd using the quick quote feature, and receive an idea of the loan approval in as few as eight minutes.

5. UDC

UDC is a New Zealand-only finance company that generates automobile loans with accredited dealers. It offers loans for no less than $10,000. Because this company’s car loan rates are very low, borrowers can save money in the long run.

Interest rates and fees: Interest rates will be between 8.95% and 9.95%. There is an establishment fee of $195, Personal Property Security Register of $10.35, monthly maintenance charge of $2, and a variable fee for early repayment.

Requirements: UDC is available to only NZ citizens or permanent residents who are 18 years old or older who can show proof of income and expenses.

How to apply: Fill out an application on the UDC website in fewer than 10 minutes. A representative will request any additional documents needed.

6. Heartland Bank

Heartland Bank is an online institution offering car loans in NZ. It provides zero-deposit financing for those looking for 100% financing options. This company’s vehicle loans can also be applied to boats, jet skis, caravans, and motorbikes.

Interest rates and fees: Rates begin at 7.95% and go up to 14.95%. There is also a $205 establishment fee, $500 broker fee, $7.39 property security charge, and an early repayment fee.

Requirements: Applicants must be at least 18 years old, be able to meet repayment loan terms based on income, be NZ residents or citizens, and be able to verify their identity.

How to apply: Click Apply now and fill out the four-page application on the Heartland Bank website to apply.

7. MyFinance

MyFinance offers car loans to Kiwis. Its vehicle loans can be put toward cars, campervans, boats, and motorbikes. It also accepts car loan applications from individuals with bad credit.

Interest rates and fees: Interest rates range from 13.95% to 24.95%. Establishment fees also apply, depending on the loan amount, and will vary from $250 up to $450. Property security registration fee of $8.05, a monthly administration charge of $2.50, and a $125 early repayment fee also apply.

Requirements: Applicants must be at least 18 years old. A restricted license is required, in addition to proof of income, to ensure payments can be made.

How to apply: A MyFinance loan application can be completed in just a few minutes on their website.

8. QuickLoans


Quick Loans is a financial institution that operates online in New Zealand. This company offers quick funding within 24 hours or less, and considers applicants with less than perfect credit, no deposit required. QuickLoans does not charge an early settlement penalty.

Interest rates and fees: Rates vary between 9.95% and 23.95%. Establishment fees can be anywhere from $95 up to $595. An administrative fee of $12 per month is also charged, plus $3 if using a direct debit service.

Requirements: Applicants must be 18 years old or older, show proof of residency in NZ, and provide income and expenses information.

How to apply: Fill out the five-page application on the QuickLoans website.

9. Admiral Finance

Admiral Finance gives New Zealanders fast approval on small car loans. It offers same-day financing and zero-deposit loans. Newer loans are no longer charged an early settlement fee.

Interest rates and fees: The rates for a car loan ranges from 13.95% to 23.95%. Establishment fees are $125 up to $595, depending on the loan amount. A $12 per month charge is also applied for account administration.

Requirements: To be considered, applicants must be at least 18 years old, have an income of $450 minimum each week, and be residents or citizens of NZ. Applicants between 18-21 will need a guarantor to sign with them.

How to apply: Apply in as little as five minutes with the Admiral Finance online application.

10. Harmoney

Harmoney is an online lending institution that offers unsecured car loans, meaning there is no requirement to have a collateral attached to the loan. It also does not penalize borrowers for early repayment. The rate borrowers get during the loan process is fixed, so it will not fluctuate for the life of the loan.

Interest rates and fees: Interest rates vary from 6.99% to 24.69%. Establishment fees also range from $200 to $450, depending on the loan.

Requirements: To be approved for car loans in NZ through Harmoney, applicants must be at least 18 years old, be New Zealand citizens or permanent residents, and have a stable income.

How to apply: Select the ‘Apply Now’ button on the site and begin an application using Facebook, Google, or an email address.

What You Should Know Before Choosing an Auto Loan

Many New Zealand companies offer a variety of options when it comes to choosing from the best car loans. Before making the final decision, here are some things to know.

Are there car loans for New Zealanders with bad credit?

A credit score can help lenders determine if a borrower is trustworthy enough to pay back the loan. It is based on the borrower’s history, and will be lowered if there is a history of late payments or if there is no history at all. But there are options for people who need car loans but who have bad credit.

What are the average car loan rates in NZ?

Car loan rates range from as low as 5.03% and go up to 24.95%. Auto loans for bad credit will lean toward the higher end of the spectrum.

Are there alternatives to taking out a car loan?

Consumers looking to purchase a new vehicle can avoid taking out a car loan by saving up enough money to purchase the car outright, buying a used car instead of a new one, or asking for donations or a loan from family members or friends.

Additionally, some companies offer subscription car services that allow New Zealanders to borrow a car for a short amount of time without having to outright purchase the car.

How to Pick an Affordable Car Loan

  • Finding the right loan doesn’t have to be difficult. All it takes is some research done ahead of time to determine which company will offer the best deal.

  • Decide what car is the right choice and how much it will cost. Determine monthly income and expenses to better understand if a car is affordable right now. If it is, then finding the right repayment plan is the next step.

  • Understanding the requirements from each lender will also be helpful in picking the right lender. Shop around with different lenders, compare interest rates and fees, then decide which one offers the best car loans in NZ.