Short answer: Be wary if the offer is only described as a weekly repayment, if add-ons have been slipped into the loan, if there's a large balloon you didn't ask for, or if you're pushed to sign before you've seen the full contract. A good deal holds up when you look at the total cost and read the fine print.
1. You only hear about the repayment
"Just $99 a week" says nothing about the rate, the term, the fees or the balloon. Ask for the interest rate, the comparison rate, the term, all fees and the total amount you'll repay. For consumer loans, all of that has to be in the contract.
2. There's a balloon you didn't ask for
A balloon lowers repayments by leaving a lump sum owing at the end. You pay interest on it the whole way through, and you'll need to pay it, refinance it or sell the car when the loan ends. If a balloon has been used to make a car look affordable, the car may be more than your budget really allows.
3. Add-ons have been built into the loan
Extended warranties, tyre and rim cover, paint protection, GAP cover and loan protection insurance are sometimes added at signing. Financed add-ons cost you interest too. Most add-on insurance can't be sold to you on the spot when you buy the car, so if you're told you must take it today, that's a warning sign. Ask for an itemised list and remove anything you don't want.
4. The term is longer than the car's useful life
A 7-year loan on an older used car can leave you still paying when the car needs major repairs, or owing more than it's worth if you want to sell. Match the term to how long you'll realistically keep the car.
5. Fees you can't explain
- Establishment or application fees
- Monthly account-keeping fees
- Early payout or termination fees
- Dealer or broker fees added on top
Each may be legitimate, but you should be told about them clearly and they should show up in the comparison rate or the contract.
6. Pressure, promises or shortcuts
- Being told approval is "guaranteed" before anyone has looked at your finances
- Being encouraged to round up your income or leave out a debt. That's your risk, not theirs
- Being asked to pay an upfront fee before any approval
- Being rushed to sign today, or not being given a copy of the contract
Licensed lenders and brokers must make reasonable inquiries about your finances, and you can take the contract home to read. If something has gone wrong, you can complain to the lender first and then to the Australian Financial Complaints Authority (AFCA). Moneysmart's car loan guide covers your rights.
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General information only. This isn't financial advice. Finance the Ride is a referral service and doesn't hold an Australian Credit Licence. Last reviewed September 2026.
