The main thing to remember is not to rush your decision and shop for your loan before you start to look at cars.

Some of the variables you need to consider include:

1. Term of the loan – personal or car loans often have a term of between one and five years, although some can run for up to seven years.

2. Interest rates – these can vary wildly depending on the term of the loan, financial institution offering the loan, loan amount and whether you want a variable or fixed rate.

3. Other fees and charges – check the fine print for establishment fees, annual fees, fees for paying out the loan early and fees for defaulting on a payment.

4. Insurance – does the loan require you to take out insurance to cover missed payments?

5. Repayments – can you make repayments weekly or fortnightly? This can quite often save money over the term of the loan
    

Below I have given some different types of car loans.　

Fixed Rate Personal Loan

This type of finance gives you the assurance of a fixed interest rate for the life of the loan. You'll be protected from any interest rate rises, and your regular repayments will also remain the same. So, you can easily budget for your repayments each month.

Since the loan is unsecured, you don't need to offer security for the loan.

Variable Rate Personal Car Loan

This type of finance gives you the flexibility to make extra repayments anytime at no cost..

Since this loan has a variable interest rate, the rate may fluctuate throughout the life of the loan in accordance with changes in market interest rates. As a result, your minimum monthly repayment amount may also change.

The minimum loan amount is $10,000. Since the loan is unsecured, you won't need to offer any security.

Fixed Rate Secured Car Loan

This type of finance gives you the assurance of a fixed interest rate for the life of the loan. You'll be protected from any interest rate rises, and your regular repayments will remain the same. Plus, since your car is offered as security for the loan, the interest rate will be lower.

Offering your car as security acts as a guarantee for your loan repayments. If you cannot repay the loan, the lender can sell your car to recover the cost of the loan. If there is a shortfall after sale, you will be required to pay the lender the outstanding loan amount, including interest, fees and charges.

Hire Purchase (Car)

This type of finance is an agreement between you and the lender to acquire a car(s). During the hire period, the lender legally owns the car and you pay regular installments to the lender. When you pay off the loan in full, legal ownership is transferred to you.

The benefits:

1. You can finance 100% of the vehicle purchase price, or place a deposit.

2. You can purchase the vehicle at anytime during the term of the agreement.

3. You are protected from interest rate fluctuations during the hiring period.

4. If you use your car to generate assessable income, the interest component of the instalments and the depreciation on the car may be tax deductible.

5. If the vehicle is used by your business which is registered for GST and accounts for GST on a non-cash basis, any GST credit entitlement the business may have, can be claimed upfront via the Business Activity Statement.