The Reserve Bank lifted the cash rate to 4.35 per cent on Tuesday. Most variable home-loan customers will feel the move within a fortnight; for vehicle finance the lag is shorter still. Major non-bank vehicle financiers wholesale-fund their books in tighter cycles than the banks, and they update consumer rate cards within 5 to 10 business days of a cash-rate move. By the time you read this, the rates quoted on most lender finance pages have already shifted.
On a typical $40,000 secured car loan over 5 years, indicative broker-panel rates this week sit between 7.45 and 8.95 per cent for prime borrowers, depending on the age of the vehicle, the loan-to-value ratio, and the lender. Dealer finance on the same vehicle is commonly between 9.95 and 11.50 per cent for the same borrower profile. The gap is the broker channel doing what it is meant to do: putting the customer in front of multiple wholesale-funded lenders rather than the one balance-sheet behind the dealer.
Where the green and EV discounts still hold
A handful of lenders still offer a 0.50 to 1.00 per cent discount for battery-electric vehicles, and a slightly smaller discount for hybrids and plug-in hybrids. The discount survived the May rate move on most green-loan rate cards we reviewed, although the underlying base rate moved up. The economics for an EV buyer therefore look like this: the headline rate has gone up by roughly 0.25 to 0.40 per cent, but the EV discount is unchanged, so the all-in rate is still cheaper than the equivalent ICE loan from the same lender by about half a percent. Worth chasing if you are buying electric.
The picture for plug-in hybrids is more mixed. The federal FBT exemption no longer applies to plug-in hybrids (it has been a battery-electric only exemption since April 2025), and several lenders quietly removed plug-in hybrid eligibility from their green-loan products through the back end of 2025. If you are looking at a plug-in hybrid for a novated lease specifically, the maths has changed materially in the last 12 months. Our novated lease coverage covers the FBT side; the lender side of the same question is the one that catches most buyers off guard.
Secured vs unsecured: the gap is widening
Secured car loans (the lender takes a registered interest over the vehicle on the PPSR) sit broadly between 7.45 and 9.95 per cent for prime borrowers in May 2026. Unsecured loans, where the vehicle is older or the borrower wants flexibility on what they can do with the asset, sit broadly between 11.95 and 16.95 per cent. The gap is the largest it has been in the cycle, partly because unsecured lenders price funding-rate moves more aggressively, and partly because the credit picture for unsecured personal lending tightened in the back half of 2025.
Practical implication: if the vehicle is under 7 years old at end of loan term, the security saves you real money. If you are buying privately and the vehicle is older, model both options before defaulting to unsecured. Some lenders will secure against a vehicle up to 12 years old at end of term; a broker can name the lenders that go furthest on age and condition.
What to ask the lender or the broker
- What is the comparison rate at my exact loan amount and term, not the published example rate? The published comparison rate is calculated on a $30,000 5-year loan with standard fees and may differ materially from yours.
- Are there any rate discounts I qualify for that are not advertised on the rate card (employer schemes, professional discounts, EV or green-loan discount, multi-asset discount)?
- What is the early-repayment policy? Can I make extra repayments without penalty? Some fixed-rate consumer finance products charge break fees on early payout that can run into thousands.
- What is the balloon or residual at end of term, if any? Balloon payments compress the monthly repayment but leave a lump-sum decision (refinance, refinance again, sell) at the end.
For a buyer choosing between a novated lease and a secured car loan in mid-2026, the cash-rate environment alone does not pick the winner. Novated leasing carries the FBT and salary-packaging benefits but locks you into employer-employee arrangements; a straight car loan keeps the vehicle separate from your employment but gives up the tax efficiency. Our novated-vs-loan piece walks through the after-tax cost on a typical income.