Australians took out $4.7 billion in new loans to buy road vehicles in the June quarter of 2026, according to the latest Australian Bureau of Statistics Lending Indicators. That figure was down 1.6 per cent on the March quarter and down 5.0 per cent on the same quarter a year earlier, the softest quarter for car loan lending in a year. For anyone weighing up a car loan right now, softer demand changes the backdrop you are borrowing into, and it is worth understanding what that means before you apply.
What the June quarter car loan lending figures show
The ABS Lending Indicators track the value of new loan commitments that lenders write each quarter, and they break personal borrowing down by purpose. New fixed-term personal finance for road vehicles came in at $4.7 billion for the June quarter 2026, the largest single slice of personal lending. Total new fixed-term personal finance across all purposes was $9.7 billion, down 0.9 per cent on the quarter but up 7.1 per cent over the year.
The split inside that total is the interesting part. Vehicle lending fell 5.0 per cent over the year, while borrowing for other purposes such as travel, household goods and personal investment rose 21.6 per cent. In plain terms, Australians kept borrowing, but a smaller share of it went towards cars. Higher vehicle prices, a stretched household budget and buyers holding on to their existing car for longer all help explain why fewer new car loans were written. The road vehicles category covers new and used cars, motorcycles and other passenger and light commercial vehicles bought for private use, so it is a broad read on how households are financing the family car rather than a niche measure.
Why softer car lending matters when you apply
A dip in new car lending is not automatically bad news for a borrower. When the flow of new applications eases, lenders still have funding targets to hit, and competition for well-qualified applicants can sharpen. That competition tends to show up in the pricing offered to strong credit profiles rather than in the headline advertised rate, so the gap between the advertised rate and the rate you are actually quoted becomes the number that matters.
It also means presentation counts. In a quieter market a lender has more room to be selective, so a clean application with verifiable income, a steady address history and a realistic loan amount stands out. None of that is new, but a softer lending environment rewards borrowers who get the basics right and compare more than one offer before signing.
The cash rate backdrop
The Reserve Bank cash rate has been held at 4.35 per cent, and that steady setting shapes the cost of funding for lenders. Car loan rates do not move in lockstep with the cash rate, because a car loan is priced on the vehicle as security, the loan term, and the borrower's individual credit profile rather than purely on the RBA's setting. You can read more about that in our explainer on why car loan rates do not follow the cash rate.
A held cash rate does keep the assessment side stable. Lenders test your repayments against a buffer, checking that you could still meet them if rates rose, and a steady rate environment means that buffer is not being nudged higher month to month. That predictability helps when you are budgeting for a purchase over the next few months.
What this means for borrowing power
Your borrowing power on a car loan comes down to assessable income, existing commitments and living expenses, measured against that buffered repayment. Softer market demand does not change the arithmetic of your own application, but it can change the offers available to you. If your income is stable and your credit file is clean, a market where lenders are chasing fewer strong applicants is one where shopping around is more likely to pay off.
If you are not sure where you stand, our loan repayment calculators let you model different loan amounts, terms and rates so you can see the monthly repayment before you talk to a lender. Working backwards from a repayment you are comfortable with is usually more useful than starting with a car price. The loan term matters here too, because stretching a loan over a longer period lowers the monthly repayment but adds to the total interest paid, so the term you choose is part of the borrowing power picture rather than an afterthought.
Refinancing an existing car loan
The same conditions that affect new lending also matter if you already have a car loan. Borrowers who took out finance when their credit profile was thinner, or who accepted the first rate offered, may now qualify for a sharper deal. Refinancing can lower the monthly repayment or shorten the term, though it is worth checking any exit costs on your current loan and comparison rates on the new one before switching. Our guide on refinancing a car loan walks through when it tends to be worth it and when it is not.
The takeaway for buyers
The June quarter numbers describe a market where fewer new car loans are being written, personal borrowing is being redirected towards other purposes, and the cash rate is sitting still. For an individual borrower the practical message is straightforward. Compare more than one lender, know the rate you are actually being offered rather than the advertised range, keep your application clean, and use a calculator to anchor on a repayment you can sustain. You can also browse our lender reviews to see how different providers price car and personal loans. This article is general information only and does not take your personal circumstances into account.
