Luxury Car Loans Australia

It might not be as fun as browsing for your next BMW, but comparing car loans is a crucial step if you're buying a luxury vehicle. Whether you're eyeing something sleek under $100,000 or something a bit more premium, a luxury car loan can help you get there - often with competitive rates if you know where to look.

Financing a luxury car shouldn't be an afterthought, so it's worth spending time on your loan options too. Check out how luxury car loans work and learn how to compare lenders before making your move.

What are luxury car loans?

Loan options for luxury vehicles work in much the same way as regular car loans except that they are for larger amounts. Luxury cars can cost you anywhere upwards of $40,000 and a loan of that size is a serious undertaking. Luxury car loans can come as a fixed or variable rate option and secured or unsecured. There are also options for business car loans.

Types of luxury car loans

Secured car loans

These loans use the car as security, which helps keep interest rates lower. They're a good fit if you're buying new or near-new and plan to borrow the full purchase price. Just be sure the repayments fit your budget - if you default, the lender can repossess the car.

Unsecured car loans

No security required - which means more flexibility, but usually higher rates. They're worth considering if you're buying a second-hand luxury car or want to borrow for other costs like insurance or rego.

Business car loans

If you're buying a luxury car for business use, you may be able to access loans with tax advantages or flexible repayment structures based on your cash flow. Some don't require a deposit.

Chattel mortgage

This is a business loan for self-employed buyers where the car is used as security. It works like a secured loan but includes the option for a balloon payment at the end to lower your ongoing repayments.

Dealer finance

Luxury car dealers often offer finance on the spot, sometimes with a set rate and a balloon payment at the end. While convenient, it's best to compare offers before signing - dealership finance isn't always the cheapest option.

Luxury Car Tax: what you need to know

The Luxury Car Tax (LCT) is a federal tax applied to vehicles that exceed certain value thresholds. As of the 2024–25 financial year, the thresholds are:

• Fuel-efficient vehicles: $91,387
• Other vehicles: $80,567

Fuel-efficient vehicles are defined as those with a combined fuel consumption not exceeding 7.0L/100km.

The LCT is charged at 33% on the portion of the car's GST-inclusive price that exceeds the relevant threshold. You'll need to pay LCT if you're registered (or required to be registered) for GST and you import or sell a luxury vehicle - whether as a business or as an individual.

Heads up: From 1 July 2025, the definition of a fuel-efficient vehicle will change to those that use 3.5L/100km or less.

How to compare luxury car loans

• Variable or fixed rate. Luxury car loans usually come as a fixed or variable rate option. A variable rate is more of a gamble as the interest rate can increase and decrease during the loan term, which also makes it hard to budget for. A fixed rate loan allows you to lock in a specific rate for the life of the loan, although this may mean you miss out on lower rates down the track.
• Loan term. Loan terms vary between lenders, but generally you are able to borrow for between one and five years for a fixed rate loan or between one and seven years for a variable rate loan. Shorter loan terms will help to save you money in interest, but this will also mean higher monthly repayments.
• Fees. You should familiarise yourself with all fees that you may be charged before you apply for the loan. This includes upfront and ongoing account-keeping fees, including fees you may be charged for extra features such as making additional repayments.
• Repayments. Before you apply for a loan you should check the repayment options offered by the lender. Usually, you will be able to select your repayment frequency so you’re able to match it up with your pay frequency and you may also have the option to make additional repayments.
• Flexibility. You should also check how flexible the lender will be over the course of the loan. For example, will you be able to pay back the loan early, or are you able to extend the loan terms? This loan could be with you for a few years, so you want to ensure it’s as accommodating as possible.

Things to consider

As outlined above, you will also need to incorporate the Luxury Car Tax into the cost for the car. Some lenders may let you include this in your loan amount as it has to do with the purchase of your car and is included by some sellers in the actual price of the car. If you are looking to finance a luxury vehicle you should seriously consider whether this is financially responsible and whether you are actually able to afford it.

If you are borrowing a significant proportion of the purchase price then you may want to consider opting for a cheaper car, or to save up more finance in order to reduce your repayments. This is especially true if your income is unsteady because you are self-employed or your income comes from investments.

Car financing through your dealership is also an option, but again, you’ll need to compare the costs, repayments and interest to determine if you’re getting the best deal.

How to apply

If you’d like to apply for a luxury car loan you can compare your options above. Once you’ve chosen a loan, click ‘Go to Site’ to be taken through to the lender’s website. Generally, you will need to be over the age of 18, be a permanent Australian resident and have a good credit rating to apply. You will also need to provide the following:

• Proof of identity
• Personal details including name and age
• Financial details including your assets, credits, debts and liabilities
• Employment details including income and your employer’s name and contact information
• Business details if the car is being purchased by a business
• Details of the car including make, model, condition and price

Frequently Asked Questions

• What is luxury car limit?

  The luxury car tax (LCT) threshold for the 2023-24 financial year in Australia is $76,950 for fuel-efficient vehicles and $68,740 for other vehicles. Cars priced above these limits attract a 33% tax on the value exceeding the threshold.

• How to avoid LCT in Australia?

  To avoid the luxury car tax (LCT) in Australia, you'd need to purchase a new vehicle that falls below the LCT threshold or opt for a fuel-efficient vehicle, which has a higher LCT threshold. You can also buy a second-hand luxury car, as LCT is not applied to used vehicles.

• Is luxury car tax deductible in Australia?

  Luxury car tax (LCT) is generally not tax-deductible in Australia. However, businesses registered for GST may be able to claim GST credits up to the luxury car limit. It is advisable to consult with a tax professional for specific advice regarding deductions.c

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Written by

Matt Corke

Head of Publishing Ventures

Matt Corke is Finder’s head of publishing ventures. Prior to this he was head of publishing for Australia, New Zealand and emerging markets. Matt built his first website in 1999 and has been building computers since he was in his early teens. In that time, he has survived the dot-com crash and countless Google algorithm updates. See full bio