Car Loan Agreement Template (Australia)

Disclose the loan terms the National Credit Code actually requires

A regulated credit contract needs to set out the amount of credit, the annual percentage rate, the total amount payable, and any establishment or ongoing fees, before the contract is signed. Where the rate is advertised, the National Credit Code also requires a comparison rate — a single figure combining the interest rate and most fees — so borrowers can compare the real cost across lenders, not just the headline rate. This template puts the disclosure figures in one place, including the comparison rate.

Register the security interest on the PPSR, not by holding title

Since the Personal Property Securities Act 2009 came into force, security over a vehicle is generally registered on the national Personal Property Securities Register (PPSR), administered by the Australian Financial Security Authority — not through the lender retaining legal ownership, and not through a state-based charge register. A lender that finances a vehicle purchase but doesn't register its interest on the PPSR risks losing priority to another creditor, or even to a buyer who purchases the vehicle without notice of the unregistered interest. This template makes PPSR registration an explicit, named step rather than a vague 'perfect the security interest' phrase borrowed from a different legal system.

Confirm whether the National Credit Code actually applies

The NCC applies to a credit contract where the debtor is a natural person or a strata corporation, and the credit is provided wholly or predominantly for personal, domestic, or household purposes. It generally does not apply to a company borrower, or to credit provided predominantly for business purposes. This template makes the borrower's status and purpose an explicit field, since a business car loan to a company sits outside the regulated regime and doesn't carry the same disclosure and hardship rights.

Build in the section 72 hardship right

For a regulated contract, section 72 of the National Credit Code gives a borrower experiencing genuine financial hardship the right to ask the lender to vary the contract — for example, extending the term or temporarily reducing repayments — by giving a hardship notice, verbally or in writing. The lender then has defined timeframes to respond. This template states that right rather than defaulting to a US-style acceleration-and-repossession clause with no mention of it.

Keep responsible-lending obligations in view

A lender providing regulated credit generally needs an Australian credit licence and must assess whether the contract is 'not unsuitable' for the borrower before entering into it — considering the borrower's requirements, objectives, and capacity to repay without substantial hardship. This isn't a clause the borrower signs, but it's the backdrop against which the agreement is made, and worth stating so both sides understand the lender's obligation exists independently of the contract terms.

Clause-by-clause guide

Regulated contract statement

States whether this is a regulated credit contract based on the borrower's status and the loan's purpose.

Credit disclosure

Sets out the amount of credit, interest rate, comparison rate, total amount payable and fees together.

Vehicle and security

Describes the vehicle and states that the lender's security interest will be registered on the PPSR.

Repayment

Sets the instalment schedule.

Hardship variation

States the borrower's right to request a hardship variation under section 72 of the National Credit Code.

Default

Sets out what constitutes default and the notice the lender must give before acting on it.

Australian compliance checklist

This covers a regulated contract with an individual or strata-corporation borrower; a company borrower changes the position.

• Hold the appropriate Australian credit licence

  A lender engaging in credit activity under a regulated contract generally needs an Australian credit licence, or to be a credit representative of a licensee.

• Assess suitability before entering the contract

  The lender must assess that a regulated credit contract is not unsuitable for the borrower, considering their requirements, objectives, and capacity to repay.

• Include a comparison rate where a rate is advertised

  Advertising a regulated credit product with an interest rate generally requires a comparison rate alongside it, so borrowers can compare the real cost.

  ASIC — National Credit Code

• Register the security interest on the PPSR

  A security interest in the vehicle should be registered on the Personal Property Securities Register to protect the lender's priority against other creditors and purchasers.

  PPSR — About the register

• Honour the hardship variation right

  A borrower experiencing genuine financial hardship can request a variation to the contract under section 72 of the National Credit Code, and the lender has defined timeframes to respond.

How to complete the agreement

1. Confirm the borrower's status. Establish whether the borrower is an individual/strata corporation or a company, and the purpose of the loan.
2. Enter the credit disclosure. Add the amount of credit, interest rate, comparison rate, total amount payable and fees.
3. Describe the vehicle. Record make, model, year and registration.
4. Note PPSR registration. Confirm the lender will register its security interest on the PPSR.
5. Set the repayment schedule. Add the number and amount of instalments.

Frequently asked questions

Related templates

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