Car and equipment finance in 2026: what the RBA's rate hold means for your next loan

31 July 2026 · Vehicle & asset finance · 8 min read

If you've been putting off financing a ute, a car, or a piece of equipment for the business while you waited to see what the Reserve Bank would do, here's where things stand. At its meeting in June, the Board decided to leave the cash rate target unchanged at 4.35 per cent. That followed a run of increases earlier in the year — following the three increases in the cash rate target since the beginning of the year, financial conditions are now tighter than they were, and there are signs that the economy is slowing as expected. The Board's next update is due at 2.30 pm on 11 August 2026, and it's watching inflation data closely before it moves again either way.

For home loan borrowers, a hold is welcome news. But it's worth understanding that vehicle and asset finance doesn't move in lockstep with home loans anyway — most car loans, chattel mortgages and equipment finance facilities are priced and fixed at settlement, so the rate you're quoted today reflects the last few cash rate moves, not the next one. If you've been waiting for a cut before you finance a vehicle, you may be waiting through a period where lenders have already priced in the increases that happened earlier this year — and the Board itself has flagged it isn't rushing to reverse them.

How car and asset finance actually gets priced

Unlike a home loan, which is usually variable and directly tracks the cash rate, most vehicle and equipment finance in Australia is written as a fixed-rate facility for the life of the loan — commonly a secured car loan, a chattel mortgage, or a novated lease. The rate you're offered depends on a handful of factors that matter more than the cash rate on any given day:

The asset itself. A new, mainstream vehicle with a deep resale market is easier for a lender to price and recover value on than a specialised piece of equipment or an older used car — so newer, more common assets often attract sharper pricing.

Your documentation. Full-doc applications with verified financials generally price better than low-doc, and low-doc options are typically capped at lower loan amounts than a fully documented application.

Your credit profile and trading history. Length of time in business, ABN age, and conduct on existing facilities all factor into risk pricing, the same way they do for a home loan.

Loan structure. Term length, deposit or trade-in, and whether you're using a balloon payment to reduce ongoing repayments all shift the numbers.

Business use versus personal use

If the vehicle or equipment is for business purposes, a chattel mortgage is a common structure — the business owns the asset from day one, and interest and depreciation may be tax-deductible business expenses, though you should confirm this with your accountant for your specific circumstances. Chattel mortgages generally aren't available to individuals financing a car for personal use only; they're built around the asset being predominantly used for business.

For personal use, a standard secured car loan is the more common path — the vehicle secures the debt, which is why lenders can typically offer more competitive pricing than an unsecured personal loan.

Worked illustrative example

This example is illustrative only and does not reflect actual rates, loan terms, or an offer of finance. Consider a self-employed tradesperson, two years into their ABN, who wants to finance a new ute for work use. Because they can provide full financials and the vehicle is new with strong resale value, they're able to present a stronger application than if they were newly registered and applying low-doc on a used vehicle. A broker comparing multiple lenders can help identify which one is likely to view that particular combination of asset, documentation and trading history most favourably — the same logic that applies to a self-employed home loan application, where lenders are assessing consistency of income rather than a single payslip.

What to check before you sign

Whatever the finance is for, it's worth reading your contract closely before you commit. Establishment fees are typically added to the loan principal, meaning you pay interest on them for the life of the loan — so a fee that looks small upfront can cost more in real terms over a five-year term. It's also worth asking directly whether the rate you've been quoted includes any dealer commission or reserve arrangement, and comparing that quote against what an independent broker can source across multiple lenders rather than accepting the first offer at the point of sale.

Where this fits with your broader finances

If you're financing a vehicle or equipment at the same time as you're managing a mortgage, it's worth stepping back and looking at the whole picture — how a new asset repayment sits alongside your home loan, and whether refinancing or restructuring your mortgage could free up some serviceability first. Our calculators can give you a general sense of how a new repayment might sit alongside your existing commitments, and if your home loan is due for a review, our refinance home loan hub is a reasonable place to start before you take on additional finance.

Common questions

Will vehicle and asset finance rates fall if the RBA cuts the cash rate?
Most vehicle and equipment finance is fixed at settlement, so existing facilities generally aren't affected by later cash rate moves. New finance you take out after a cut may reflect improved pricing, but this depends on individual lender policy, your asset, and your credit profile — a broker can help you compare current offers when you're ready to apply.

Is a chattel mortgage or a car loan better for a business vehicle?
It depends on how the vehicle will be used and your business structure. A chattel mortgage is generally for assets used predominantly for business purposes and may carry different tax treatment; a standard secured car loan is more common for personal use. Speak with your accountant about which structure suits your situation before you apply.

Does my credit history affect asset finance the same way it affects a home loan?
Broadly, yes — lenders assess your credit conduct, income stability and existing debts when pricing any secured finance. If you've had past credit issues, it doesn't necessarily rule out asset finance, in the same way it doesn't automatically rule out a mortgage; some lenders specialise in credit-impaired lending and take a broader view of your circumstances.

Can I finance a vehicle if I'm newly self-employed?
Some lenders offer low-doc options for newer ABNs, though loan amounts and pricing are typically more conservative than for an established business with full financials. If you're self-employed and finding it hard to get consistent answers from lenders, it can help to speak with a broker who works across a panel that includes specialist and low-doc options.

General information only — not credit advice. Credit assistance is provided by a licensed mortgage broker.