As Australians dust off their cars for their daily commute after months of lockdowns, car expenses are expected to pile up.

In 2021, the cost of transport rose to a national average of 14.9 per cent of household income, up from 12.8 per cent in 2020.

Record-high petrol prices are partly to blame, but car loan repayments are also one of the biggest contributors to transport costs.

So here are some ways to cut them.

Weigh up your options

Savvy Finance founder and CEO Bill Tsouvalas said one of the biggest mistakes car buyers could make is failing to compare their loan options.

He said people should look at products beyond their current bank or dealership to find the best deals.

“I think comparing options is really important,” Mr Tsouvalas said.

“Whether they do that through a broker, [or] online through a comparison site, [or] call up three or four car loan companies and get quotes.”

Consider your credit score

Mr Tsouvalas said it was important to stay on top of your credit score.

“The higher the credit score that you have, the cheaper your cheaper interest rate [will be] from a car loan lender,” he said.

People can easily access their credit scores online in the same way that they would for a home loan.

Companies such as Experian, Equifax, Canstar and Finder offer a free service.

CarClarity founder and CEO Zaheer Jappie said a little-known danger of applying for multiple loans was the negative effect it could have on your credit score.

Mr Jappie said applying for multiple loans in a short space of time would lower your score as the majority of lenders do a hard credit check.

He said using a third-party site such as CarClarity to find the right loan would lessen the risk of affecting your credit score.

Look for the exit

Mr Tsouvalas said although one of the best ways to save money on your car loan was to pay it off quickly, some lenders charge early exit fees.

He therefore recommended searching for a loan facility that charges low or zero exit fees if you plan to pay off your loan in three years instead of five.

Mr Jappie said even if you are charged an exit fee to pay off your loan earlier, it still made sense to pay the one-off fee instead of the larger interest rate costs you would otherwise face.

Refinance

Mr Jappie said refinancing was a great option for people with new car loans wanting to lower their repayments or interest rates.

“A car loan that’s one or two years old is probably the best time to refinance,” he said.

“Typically in the first two years you can probably get a better rate, maybe half your rate.”

Do your research

When buying a car, people should develop a good understanding of how much they can afford to spend, Mr Jappie said.

He also said people should resist the “instant in-store pressure” to get a loan straight from their regular bank or dealership, and do as much research as possible to drive down their costs.

Mr Tsouvalas said buyers should research the resale value of their car’s make and model, and be careful not to rush the car-buying process.

“Mistakes come through when people just don’t take the time to research,” he said.

“Slowing the process down, doing adequate research and comparing options is critical.”