Australia Is Buying EVs at Record Speed. But What Actually Happens When Your GFV Loan Ends?

First, the numbers that matter right now

June 2026 was Australia's biggest June on record for new vehicle sales — 140,058 units sold, up nearly 10% on the same month last year. Electric vehicles made up 35.8% of all new passenger car sales. The Tesla Model Y became Australia's best-selling car for the second month in a row, with 8,072 units delivered in June alone. BYD sold more cars in June than Toyota did the month before.

Translation: Australians are buying EVs in enormous numbers. And the vast majority of those EVs are being financed — often through a product called a Guaranteed Future Value loan, or GFV. The problem? Most buyers signing those contracts have almost no idea what happens when the loan term ends. That's exactly what this article is about.

What a GFV loan actually is

A GFV loan works like this. Instead of borrowing the full purchase price of the car, you only borrow the difference between the purchase price and a guaranteed residual value — the amount the lender promises the car will be worth at the end of your term. Because you're financing less, your weekly or monthly repayments are lower. It sounds great. And it can be — depending on the fine print.

On 10 July 2026, Tesla Australia launched its own GFV program in partnership with local finance company Driva. The pitch: lock in a minimum resale value for your new Model Y or Model 3 before you even drive it off the lot. Lower repayments, no depreciation risk, clear path to upgrading. For a brand that has spent the last two years slashing prices and hammering the resale values of existing owners, a guaranteed future value product makes a lot of sense — mostly for Tesla.

The three choices you get at the end — and the one most people pick by accident

When a GFV loan term ends, you typically have three options:

• Return the car. Hand the keys back. The lender covers the balloon payment using the guaranteed residual. You walk away with nothing — no equity, no payout, no reward for years of repayments.
• Buy the car. Pay out the remaining balloon payment (the guaranteed residual amount) to keep the vehicle. You'll need to refinance or pay cash. If the car is worth more than the residual, that's good news — but you still have to come up with the money.
• Sell privately. If the car is worth more than the guaranteed residual on the open market, you can sell it yourself and keep the difference. This is the option most lenders don't advertise loudly.

Here's where most Australians get burned. They walk into the dealership at the end of their term, the dealer offers a trade-in worth roughly the guaranteed residual, and they roll straight into a new finance contract. They get nothing back. They've effectively rented the car for three to five years, handed it back, and started again. Rinse. Repeat.

The depreciation problem hiding inside every EV GFV contract

Here's the uncomfortable truth about EVs and GFV loans: EVs depreciate faster than almost any other vehicle type in Australia right now. According to the AADA/AutoGrab 2025 Annual Automotive Insights Report, a one-year-old EV loses an average of 25% of its value — compared to just 11.5% for petrol vehicles over the same period. After three years, the average EV retains only 60.3% of its value, versus 92.4% for hybrids.

That's not a minor difference. On a $65,000 EV, a 40% depreciation over three years means the car is worth around $39,000. A lender setting a guaranteed residual of $36,000 isn't doing you a favour — they're setting it conservatively to protect themselves, not you. And because lenders don't publicly publish their GFV residual figures before you're sitting in the finance office, you have almost no way to know whether the guaranteed value is generous or gutlessly low until after you've signed.

The rate environment makes this even more important right now

The RBA held the cash rate at 4.35% at its June 2026 meeting — but signalled that further tightening remains possible after already hiking three times this year. The lowest car loan rate available in Australia right now sits at 5.66% p.a. Most Australians aren't getting the lowest rate. Dealer-arranged finance typically runs higher, and as ASIC's landmark Report 832 found after reviewing over 350,000 car loans, establishment fees alone can reach up to $9,000 on a single loan — often added directly to the loan principal so you pay interest on the fee for the full term.

In a high-rate environment, every dollar of unnecessary cost compounds. A GFV loan with a conservative residual, a high establishment fee, and a rate marked up by the dealer is not a low-repayment product. It's a product that looks cheap on a weekly basis while quietly extracting value over the full term.

What the RBA's next move means for your end-of-term decision

The next RBA monetary policy decision lands on 11 August 2026. If the board hikes again, refinancing a balloon payment at the end of a GFV term becomes more expensive. If you're planning to buy the car out at the end of your loan, or refinance the residual, the rate environment you face in 12 to 36 months is genuinely uncertain. That uncertainty needs to be priced into your decision today — not discovered the day you get the end-of-term letter.

The question nobody asks in the finance office

Most people sitting in a car finance office are focused on one number: the weekly repayment. Dealers know this. That's why GFV loans are so effective as a sales tool — lower weekly number, easier yes. But the weekly repayment is not your total cost. Your total cost includes the interest rate, the fees capitalised into the loan, the residual you'll face at the end, the condition and kilometre restrictions that could void the guarantee, and — critically — what you actually walk away with when the contract is done.

On a standard GFV loan from a dealer, if you return the car, you walk away with nothing. No equity. No payout. Just a new contract offer and a fresh set of repayments to start all over again.

What Milam does differently

Milam was built to fix exactly this problem. With Milam, you get lower weekly repayments — like a GFV loan — but when you return the car at the end of the term, you also receive an equity payout. If the car is worth more than the residual, that money comes back to you. Not to the lender. Not to the dealer. To you.

It's the question you should be asking about every single car finance product you're shown: What do I actually get back at the end? If the answer is nothing, you're not buying finance — you're buying a very expensive rental agreement with a nice-sounding guarantee attached.

What to do before you sign anything

• Ask for the guaranteed residual figure in writing before you agree to anything. If they won't show you, walk away.
• Check the kilometre cap. Most GFV loans set annual limits of 15,000 to 20,000km. Exceed them and the guarantee can be voided or penalised.
• Ask what happens if the car is worth more than the residual. On a standard GFV, do you keep that upside? Or does it go to the lender?
• Get the comparison rate, not just the advertised rate. The comparison rate includes most fees and gives you a more honest picture of cost.
• Ask about establishment fees. ASIC found these can reach $9,000. Ask for a full fee breakdown before signing.
• Speak to a financial adviser if you're unsure which product suits your situation. This article is general information only and does not constitute financial advice.

Australia's EV market is moving fast. The finance industry is moving just as fast to profit from it. The best thing you can do right now is slow down, ask the right questions, and make sure you actually understand what you're signing — especially what happens on the day the contract ends.