You’ve found the car. The test drive went well, the price seems manageable, and someone at the dealership says they can arrange the finance today.
That last part deserves more thought than it often gets.
In June 2026, ASIC released Report 832, Lifting the bonnet: ASIC’s review of car loans. The regulator examined data from more than 350,000 loans from eight lenders. Its findings raise uncomfortable questions about what some borrowers paid, how some loans were sold, and what happened when repayments became difficult.
The report doesn’t say every car loan is a bad deal. It does show why the finance paperwork deserves as much attention as the car itself.
Losing the car did not always end the debt.
If you can’t keep up with a secured car loan, the lender may repossess and sell the vehicle. It’s easy to assume the sale will wipe most of what you owe. ASIC’s findings suggest you can’t rely on that.
Four lenders gave ASIC detailed information on 267 repossessed loans. In nearly 90 percent of those cases, borrowers still owed more than half the original loan amount after the car was sold. In the most severe examples, the remaining debt was greater than the amount originally borrowed.
That figure comes from a specific subset of repossessed loans, not all 350,000 loans in the review. Even so, the outcome is confrontational: no car, but a substantial debt still to pay.
One borrower paid more than $9,000 in establishment fees.
ASIC documented a loan of $49,162 that included $9,154 in establishment fees. Those fees covered amounts paid to the lender and the broker.
ASIC also found that loan costs varied widely and that fees were often added to the amount borrowed. When that happens, you may pay interest on the fees as well as on the money used to buy the car.
This was a striking example, not a typical fee for every borrower. The practical lesson is to ask for a full list of charges before you agree to finance. A repayment that looks comfortable on its own doesn’t tell you what the loan will cost in total.
Early missed repayments raised questions.
One lender stood out in ASIC’s review. More than 64 per cent of its reviewed loans recorded at least one default during the review period. Of the loans that defaulted, 82 per cent did so within the first six months.
That doesn’t prove every one of those loans was unaffordable from the start; people’s circumstances can change quickly. But ASIC said early defaults can be a warning sign, and it examined whether lenders were doing enough to understand borrowers’ expenses and ability to repay.
The sales conversation matters too.
ASIC looked beyond interest rates and fees. It raised concerns about high-pressure sales tactics and training designed to overcome customers’ objections to certain finance products. It also found weaknesses in how some lenders monitored dealers and brokers distributing their loans.
If you want flexibility to pay a loan off early, or you don’t want restrictions attached to a particular product, that should shape the finance you choose. It shouldn’t become an objection for someone to talk you out of.
The good news is that ASIC’s review has already prompted improvements at participating lenders, including changes to hardship processes and oversight of distributors. The less comforting news is that those changes don’t remove the need to read your own offer carefully.
What to check before you sign
ASIC’s Moneysmart car loan guide recommends comparing finance options before you start shopping. If you already have an offer in front of you, take the time to get clear answers to these questions:
- What is the total amount I will repay? Look beyond the weekly or monthly figure.
- What fees am I paying, and to whom? Ask whether any fees are being added to the loan.
- What is the comparison rate? Compare offers using the same loan amount and term.
- Is there a balloon payment? A smaller regular repayment may come with a large amount due at the end.
- What happens if I need to sell the car or struggle with repayments? Understand your options before you need them.
If you are buying a used car, check the vehicle separately from the loan. A search through the Australian Government’s Personal Property Securities Register can help identify a recorded security interest and may show whether the car is recorded as stolen or written off. It will not tell you whether your new loan is affordable or good value, so you need to check both sides of the purchase.
At carsDNA.com, we believe knowing a car’s past helps you make a more informed buying decision. ASIC’s report is a reminder to bring that same curiosity to the finance contract. Ask what you are buying, ask what you are borrowing, and give yourself room to walk away if the answers are not clear.
If you’re already having trouble with car loan repayments, contact your lender early. Moneysmart also recommends speaking with a financial counsellor about your options.
Primary sources: ASIC Report 832, ASIC’s announcement of the findings, ASIC Moneysmart car loan guide and the Australian Government PPSR used vehicle guide.
Frequently Asked Questions
1. What did ASIC find when it reviewed more than 350,000 car loans?
ASIC raised concerns about high fees, early loan defaults, sales pressure, and the debts some borrowers faced after their vehicles were repossessed. The review covered loans from eight major lenders and showed why buyers should look beyond the advertised repayment amount before signing a finance contract.
2. Can I still owe money after my car has been repossessed and sold?
Yes. If the vehicle sells for less than the amount you owe, you may still be responsible for the remaining balance. ASIC found that nearly 90 per cent of borrowers in one group of reviewed repossession cases still owed more than half of their original loan amount after the car was sold.
That means losing the car may not clear the debt; you could still be required to make repayments on a vehicle you no longer own.
3. Why should I be concerned about establishment fees on a car loan?
Establishment fees can add thousands of dollars to the cost of borrowing. ASIC cited one example where a loan of about $49,000 included $9,154 in establishment fees.
If those fees are added to the loan rather than paid upfront, you may pay interest on them too. Always ask for a full breakdown of fees and the total amount you’ll repay before you accept an offer.
4. What should I do if I feel pressured to accept car finance?
You don’t have to accept finance on the spot. Ask for a copy of the loan documents and take time to read them away from the dealership.
Compare the interest rate, comparison rate, fees, loan term, total repayment amount, and any final balloon payment. If someone dismisses your questions or makes you feel uncomfortable about wanting time to think, treat that as a warning sign.
5. How can I protect myself before buying a used car with finance?
Start by checking whether the repayments genuinely fit your budget. Focus on the total loan cost, not just the weekly or monthly amount.
You should also complete a PPSR vehicle search to check for key records such as an existing security interest, theft, or a written-off status. A vehicle history check and a finance review work together: one helps you understand the car, while the other helps you understand the debt.
The safest approach is simple: learn the car’s past, understand the finance, and don’t let pressure make the decision for you.
