Car loan FAQs

See below for answers to the questions our Mortgage Choice brokers are often asked by customers who are considering a car loan.

Getting a car loan FAQs

To apply for a car loan, you must:

  • be 18 years or older
  • be an Australian resident
  • have a regular income
  • be looking to borrow more than $5,000

Some lenders will allow you to include these in the loan amount.

Pre-approval means having your loan approved before you find the car you’d like to buy. This means you can shop around for your new car with peace of mind knowing what you can afford.

Once you find the car you’d like to purchase, your broker will arrange for the funds to be drawn and payment to be made.

Find out more about car loan pre-approval here.

If you are a PAYG Applicant you will need:

  • a clear copy of your drivers licence (front and back)
  • your last 2 pay slips
  • a recent rates notice (if you own property)
  • a copy of the contract for sale for the car

If you are a self-employed applicant you will need:

  • a clear copy of your drivers licence (front and back)
  • a recent rates notice (if you own property)

If you are a commercial full doc applicant you will need:

  • a clear copy of your drivers licence (front and back)
  • a recent rates notice (if you own property)
  • recent financials (for the business and individual)

Your broker has access to a number of different lenders. As such, they are not only able to find you a sharply priced car loan, but a loan solution that meets your unique set of circumstances. In other words, they can find you a loan that meets some of your other requirements, like no monthly administration fees, or no early payment penalties. In addition, they can offer you low fixed rate options that allow you repayment flexibility, ie: weekly/fortnightly/monthly.

Moreover, a broker works for you, not a car dealership or a particular lender. While a dealership may focus on clearing out stock, a broker’s focus is making sure you find a loan that is well suited to your needs.

Yes, there are loans available for the self-employed. You may be able to claim part of the car’s costs, including loan interest, as a tax deduction.

If you purchase a car for less than $20,000, you can immediately claim the full value back as a tax deduction within the same year you buy it.

If you purchase a car with a value of more than $20,000, you can still claim a deduction over time using the general small business pool.

It is also worth considering equipment finance, which allows you to rent a vehicle over a set period of time. This allows you to have access to the vehicle straight away.

Yes, there are lenders who can assist you if you have a poor credit history. Speak to your Mortgage Choice broker for more information.

We can source loans for the following:

  • Cars
  • Motor bikes
  • Caravans
  • Boats

You could have your finance approved within 2 days. Sometimes, depending on the circumstances of the transaction, the loan approval process can take longer. For example, some car dealerships can try and delay the process by not providing a Tax Invoice, giving them the opportunity to quote the finance themselves.

We can organise car loan pre-approval for you to ensure there is no disappointment and delays regarding sourcing finance for your vehicle. In order to proceed with a pre-approval, we require an indication of the vehicle you are looking to purchase (the vehicle description may change) along with an application. It is best to provide supporting documents (i.e. Privacy Consent, Pay slips and Drivers Licence) upfront to ensure all income calculations are correct.

Purchasing a vehicle privately may give you more room for negotiation on price and the ability to select a vehicle you are looking for in the price range you can afford. However, if you don’t buy through a dealership, you will have to provide more information in order to have the loan approved. For example, you will have to prove that the car title is clear, in order to allow your chosen lender to put a charge on it. In other words, you will have to access a payout letter that makes it clear you are purchasing a vehicle free from past owner encumbrance. The value of the vehicle will also be evaluated to ensure you are not paying too much.

Purchasing a vehicle from the dealership is quite easy and all that is required is a Tax Invoice and banking details to electronically transfer funds at settlement.

When financing a vehicle privately there can be additional fees to cover an inspection report and photos of the vehicle. This fee can vary depending on the location of the inspection report. Some lenders also charge additional establishment fees.

Yes, there may be some fees involved, including:

  • lender application fee
  • origination fee
  • vehicle inspection fee (for private purchases)
  • PPSR (Financiers Security Registration fee)
  • stamp duty (applicable in NSW only)
  • monthly account keeping fees

You do not need a deposit to take out a car loan, however it may increase your chances of success and will also reduce your repayments.

Loan terms vary depending on the lender you choose, ranging from 2 to 7 years.

If you are a PAYG applicant, the vehicle cannot be more than 12 years old at the end of the contract. If you are a self-employed applicant, the vehicle cannot be more than 15 years old at the end of the contract. For those considering a classic car, some lenders do offer classic car loans.

TBA Broker Stephen 400X400

We can help you to compare a range of options to find the car loan that's right for you.

Your local Mortgage Choice expert