Should I use my super to buy a $100k car or get a loan instead?

March 4, 2026 — 4:02am

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I am a self-funded retiree considering the purchase of a new car priced between $70,000 and $100,000. From a financial point of view, is it generally better to pay cash from my pension account or to borrow and leave the money invested in super? My super fund is Hostplus Balanced and my bank is BankVic, which currently offers car loans at a fixed rate of 8.99 per cent. If I borrow, I would take a three-year term.

Hostplus Balanced returned about 10.5 per cent last year, which is about the long-term average for good super funds. If you borrowed $80,000 over three years at about 9 per cent, the total interest cost would be roughly $11,600.

Leaving that $80,000 invested in super earning 9 per cent a year should produce about $22,000 over the same period. On the numbers alone, borrowing wins, provided you are comfortable meeting repayments of about $2500 a month from your existing pension, and you understand that fixed-rate loans may carry penalties for early repayment.

Recently you wrote: “I strongly believe that your superannuation should be preserved until you retire.” This was in the context of people considering moving their funds into a transition-to-retirement (TTR) pension once they reach their preservation age, as I have. I understood your comment to mean that it may be better to leave........

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