



Automotive auction site Pickles reported a significant uptick in reclaimed vehicles going on sale, attributing the rise to ongoing cost-of-living pressures and the diminishing ability of car owners to refinance as vehicle values decline. Falling used car prices, coupled with rising living costs, have hindered the ability of car owners to refinance their rapidly depreciating assets.
On average, about 40-45% of cars purchased in Australia are financed through car loans. The value of new car loan commitments continues to hover above the $1 billion mark, with the latest ABS lending indicator data showing that $1.4 billion of new personal loans were signed in June 2024 for the purchase of road vehicles. This equates to an increase of 0.5%, seasonally adjusted, from a year ago. Compared to, say, 2006, the value has more than doubled.
According to the 2024 State of Aussies' Savings Survey by InfoChoice, 23.6% of Australians have a car loan, with indebted men more likely to have a car loan than women (25.8% vs 21.3%). Across all age groups and genders, car loans rank as the third most common debt an average Aussie has, next only to home loans and credit card debt.
These developments raise concerns about potential spillover effects into other areas of the economy, including the housing market. However, the CFO of a major non-bank lender notes that delinquency rates remain relatively low. Nonetheless, the rise in car loan delinquencies serves as a warning sign of the financial challenges many Australians are currently facing.
Published:Saturday, 4th Oct 2025
Source: Paige Estritori