The Australian vehicle finance platform Driva says new data tells it that more consumers are seeking car loans but there has been a decrease in the average amount borrowed.
Driva says it is also receiving fewer applications from mortgage holders, suggesting that homeowners are feeling the financial pinch.
It also says that its data shows monthly search queries for a vehicle loan rose to 67,600 in the third quarter of 2022, up 41% from a year earlier. The average amount borrowed for a consumer car loan fell to $21,714, down 22% compared to February of this year.
NSW is leading car loan demand according to Driva, with car loan queries from that state up by nearly 2% in the July to September period.
Loan queries for used vehicles accounted for 2.2k monthly search volume during the third quarter, up from 1.6k a year earlier, representing a 38% increase. The most popular model of car for finance in the third quarter was the Toyota Hilux, with 5.6% of Driva customers seeking loans for this particular light commercial vehicle.
Figures suggest that mortgage holders are feeling the crunch the most. Driva says its data shows the number of applicants with a mortgage has dropped from 26.62% to 22.70% in the three months to September 2022, compared to the same period in 2021.
Driva co-founder William Brown says demand for car loans was holding strong, but getting approved at a great rate was becoming more difficult as lending policies have become more conservative.
Brown says that Australians can save on car loan interest and repayments by improving their credit score, extending the length of their loan and – most importantly – doing their research.
“The average interest rate has risen from 10.08% to 12.96%, compared to the same period in 2021, making it more important than ever to shop around. Using Driva, the average customer saves $6,694, which more than offsets the interest rate rise,” Brown says.
“With rising rates and stricter lending criteria, it’s more important than ever to shop around to ensure you’re getting the best deal. Driva is a car loan matchmaker that provides customers with tailored rates based on their unique profile.
We take the hassle out of the loan application process and make it easy for car buyers to make the best choice for their individual circumstances,” he says.
