RAC Car Loans

RAC car loan eligibility and documents

RAC’s published criteria require income sufficient to repay the loan, Australian citizenship or permanent residency, and residence in Western Australia. Its eligibility page and current target market determination specify applicants over 18, while its age FAQ says applications can start at 18; applicants aged exactly 18 should confirm eligibility directly.

• Licence and registration: At least one applicant must hold a valid Australian driver’s licence or learner’s permit. The vehicle offered as security must be registered in WA in the applicant’s name.
• Credit position: Bankruptcy within the past five years or an existing debt arrangement falls outside RAC’s stated target market. Meeting the basic criteria does not establish approval.
• Vehicle: RAC requires an acceptable vehicle with at least a four-star ANCAP safety rating. Confirm the specific model’s eligibility before committing to its purchase.
• Financial assessment: RAC assesses your financial position and borrowing needs and checks your credit history. Prepare identification, income evidence, and information about expenses and existing commitments. Obtain the precise document checklist for your employment type directly from RAC.

Insurance must also satisfy RAC’s requirements. Its car finance guidance says temporary insurance cover notes are not accepted; ask what evidence of an active policy is required before settlement.

Who should consider RAC vehicle finance?

RAC suits eligible WA buyers who want a defined repayment schedule and intend to keep their car and loan for several years. Its loan-size pricing makes the amount you actually need particularly important: a buyer borrowing $20,000 should compare the applicable 10.95% rate, rather than assess the loan using the 7.70% headline.

Consider other car finance options if you expect to sell or refinance within two years, live outside WA, or want a vehicle that does not meet RAC’s security requirements. If you do not want to pledge the car, compare suitable unsecured personal loans using the same amount and repayment period.

This consumer product excludes security primarily used for business. RAC has a separate business-use lending route; assess that separately if the vehicle will mainly support your work.

How RAC car finance works

Quotation, assessment and settlement

1. Request a quote through RAC’s car loan page or call 13 17 03. Choose the amount and proposed term.
2. Submit the application and requested supporting information. RAC assesses affordability, credit history and the proposed security.
3. If you have not selected a car, request conditional pre-approval. RAC says this remains valid for 30 days; the final vehicle and outstanding conditions still require acceptance.
4. Review the contract schedule, arrange acceptable comprehensive insurance and complete signing before settlement.

Fortnightly or monthly repayments are available, with BPAY and direct debit among the payment methods. Ask RAC about weekly arrangements if that better matches your income.

How long does approval and funding take?

RAC advertises pre-approval usually within seven working hours. This is not a promise of final approval or money that day. Its published conditions say contracts become available for electronic signing the following business day once conditions are met, with EFT or BPAY funds processed 24–48 hours after settlement. Bank processing can affect receipt.

Repayment support and complaints

For repayment difficulties, contact RAC Finance on 1300 736 290 promptly and request hardship assistance. Account enquiries can also be sent to finance@rac.com.au. RAC’s complaints process provides escalation to the Australian Financial Complaints Authority if you remain dissatisfied or the matter is unresolved after 30 days. AFCA’s telephone number is 1800 931 678.

Questions to resolve before signing

• Which rate applies to my borrowing amount, and does an electric-vehicle discount appear in the written offer?
• Are establishment, registration or insurance costs paid separately or added to the balance on which interest is charged?
• Has RAC accepted this exact vehicle, its registration, safety rating and age at the proposed final repayment date?
• What would I owe if I sold the car or refinanced after 12 or 18 months?
• What default fees and recovery costs could apply, and does the contract schedule confirm the advertised absence of monthly fees?
• Does my insurance satisfy RAC’s requirements, and could its excess or insured value leave me with a debt after a total loss?

RAC car loan advantages and limitations

• Predictable structure: Fixed interest and no balloon payment make the scheduled commitment easier to assess.
• Repayment flexibility: Additional repayments are permitted, although paying the whole loan out within two years can trigger an early termination charge.
• Restricted availability: WA residency and vehicle eligibility rules narrow the pool of suitable applicants and cars.
• Cost depends on loan size: The lowest advertised standard rate is unavailable on smaller borrowing amounts. Increasing the purchase budget merely to reach a lower rate can still increase total expenditure.

RAC car loan interest rates, fees and total cost

The following standard rates were displayed on RAC’s car loan page when checked:

RAC states that its comparison rates use a $30,000 secured loan over five years. They incorporate certain fees but may exclude other charges; different amounts, terms and fees change the result. They are not personalised quotations.

The general rates page starts its lowest amount band at $5,000, but the car page and September 2026 target market determination specify an $8,000 minimum for vehicle purchases. The vehicle-specific minimum is used here.

• Establishment: $499.
• Security registration: $8 where applicable.
• Monthly account keeping: Advertised as $0; confirm this in the contract schedule.
• Early termination: $499 may apply to full repayment within 24 months. The standard terms provide exceptions for refinancing through RAC Finance, repayment wholly from insurance proceeds, or RAC’s agreement.
• Missed payments: The standard terms allow a scheduled default fee after seven consecutive days in arrears, plus applicable reasonable enforcement expenses. Obtain the actual charges before signing.

Comprehensive insurance is compulsory throughout the loan. Its premium is an additional ownership cost. RAC’s interest must be noted on the policy, and the insurer and cover must be acceptable to it. Check exclusions, excesses and the insured value: an insurance payout may not clear the outstanding loan. Default can also put the secured vehicle at risk, with a remaining debt possible after its sale.

Illustration: borrowing $30,000 over five years

Our calculation, not an RAC quotation: At 9.55% p.a., a $30,000 loan repaid over 60 months would require approximately $630.79 a month. Estimated interest is $7,847.35. With the $499 establishment fee and $8 registration fee paid separately upfront, total outlay would be approximately $38,354.35, including $8,354.35 in interest and fees.

This assumes monthly amortisation, an unchanged rate, no balloon, no extra repayments and no missed payments. Insurance, vehicle costs and contingent charges are excluded. RAC calculates interest daily and debits it monthly, so payment dates and rounding will affect its quotation. Financing the fees would also increase interest.

Under the same assumptions, a three-year term would require approximately $961.69 monthly and reduce total outlay to $35,127.83. The shorter term saves about $3,226.52 but requires substantially more room in the monthly budget.

Is RAC vehicle finance worth comparing?

RAC’s strongest feature is a straightforward fixed-rate structure with no advertised monthly account fee or balloon payment. Its main cost limitation is the higher rate on smaller loans, compounded by a possible charge for early settlement. Compare written offers for your actual borrowing amount, intended ownership period and expected payout date; include insurance and any financed fees in the budget.

RAC vehicle finance FAQs

Does RAC membership qualify me for its lowest car loan rate?

Membership alone does not qualify you for the lowest standard rate. Non-members can apply and become members when they take out a loan. RAC’s published pricing depends on the borrowing amount: 7.70% p.a. applies to $70,000 or more, while $8,000–$29,999 attracts 10.95% p.a., before any eligible electric-vehicle discount. Compare the rate for your actual borrowing amount, including after a deposit or trade-in, rather than using the headline rate.

Is RAC suitable if I have defaults, discharged bankruptcy or a debt agreement?

RAC’s target market determination excludes people who have been bankrupt within the past five years or are under a debt arrangement. The official material reviewed did not establish an acceptance policy for other defaults or low credit scores. Having a vehicle to offer as security does not establish credit eligibility. Before comparing rates, ask whether your particular credit history can be considered and whether answering that question requires a recorded credit enquiry.

Can Centrelink payments qualify as income for an RAC car loan?

The reviewed sources did not confirm which Centrelink payments RAC accepts, or whether benefits can be the sole income source. Its requirement to receive income is insufficient to establish either point. Ask RAC whether your specific payment counts, whether employment income is also required, and how payments with an expected end date are assessed. When comparing providers, distinguish acceptance of Centrelink as supplementary income from acceptance as the main income source.

Does RAC offer car finance to self-employed applicants without standard payslips?

Yes. RAC considers self-employed applicants and contractors with an ABN, subject to its lending assessment. This does not establish a low-documentation loan: the sources checked did not specify a universal minimum trading period or document checklist. Ask which tax returns, business financials or bank statements RAC requires for your circumstances. If the vehicle will be used for business at least 50% of the time, ask about RAC’s separate business-use finance product before comparing consumer car loan offers.

Can RAC finance a privately purchased older car over seven years?

Private purchases are eligible, but seven years is not available for every vehicle. RAC says the car must be no older than 15 years when the loan ends, and its current target market requires at least a four-star ANCAP rating. For example, a car already ten years old would exceed the age limit under a seven-year term. This restriction can require a shorter term and higher instalments than a general repayment calculator suggests. Confirm the exact vehicle and permitted term before committing to the purchase.

Can I compare an RAC quote or obtain pre-approval without affecting my credit file?

RAC confirms that it checks credit when assessing an application. Its credit reporting policy explains that application information supplied when requesting a credit report is recorded and shared with participating credit providers. The reviewed material did not confirm a soft-check-only quotation process. Conditional pre-approval lasts 30 days, but that validity period does not establish whether an enquiry is recorded. Ask RAC where a quotation ends and a credit-assessed application begins before using pre-approval to compare lenders.

Can I make extra repayments or refinance RAC finance without an exit charge?

Additional repayments are permitted without a payment penalty, but full settlement within the first 24 months may attract a $499 early termination fee. RAC’s standard terms also say prepayments generally shorten the remaining repayment period rather than reduce scheduled instalments. Specified fee exemptions include refinancing through RAC Finance and repayment wholly from insurance proceeds. If you expect to sell or refinance early, compare a written payout quotation for that date, including any replacement loan’s establishment costs.

Does RAC offer balloon payments, and how should I compare it with dealer finance?

RAC’s car finance guidance states that it does not offer balloon payments. A dealer proposal with a balloon leaves part of the debt until the final payment, which can make its regular instalments look cheaper. Compare both offers using the same vehicle price, deposit and term, then include all instalments, fees and the final balloon. A comparison based only on monthly repayments would overlook that remaining debt.

Does RAC’s electric-car discount make it cheaper than other car loans?

Not necessarily. RAC advertises a 0.50 percentage-point interest-rate discount for eligible new and used fully electric vehicles; hybrids are excluded. The discount applies to the relevant loan-size rate, so it does not give every electric-car buyer the lowest advertised rate. Compare the written discounted offer with both specialist electric-vehicle loans and ordinary car loans for the same amount and term. Include RAC’s $499 establishment fee, applicable $8 security-registration fee and any early settlement charge relevant to your plans.