The regulator reviewed more than 350,000 loans across eight car finance providers and found that the true cost of a loan can vary sharply depending on the lender, distributor and customer circumstances. In one example highlighted by ASIC, fees exceeded $9,000 on a loan just under $50,000. That is the kind of extra cost that can turn a seemingly competitive offer into an expensive commitment.

For everyday buyers, the lesson is not to avoid finance altogether. A car loan can still be a practical way to buy a safe, reliable vehicle for work, family and essential travel. The key is to compare the full structure, not just the interest rate. Establishment fees, monthly account fees, broker or dealer costs, early repayment rules and balloon payments can all change the real price you pay over the life of the loan.

This is especially important for used car buyers, self-employed applicants and borrowers with imperfect credit histories, who may be offered different rates or conditions. Before signing, ask for a written breakdown of all upfront and ongoing charges, check the comparison rate, and use a car loan repayment calculator to test whether repayments still fit your budget if your income changes or other household costs rise.

If you are arranging finance through a dealer or broker, it is reasonable to ask how they are paid, which lenders they considered, and whether any fees are negotiable. A transparent process should make it easier to understand why one loan is being recommended over another.

• Compare the interest rate and the comparison rate.
• Ask for every fee in writing before you apply.
• Model repayments across several loan terms.
• Be cautious with balloon payments that lower monthly costs but increase the final amount due.
• Seek help early if repayments become difficult.

The broader message from ASIC’s review is simple: a low rate is only one part of a good car loan. The best outcome is finance that is affordable, clearly explained and suitable for the way you actually use your car.