❓ Can Someone Under 18 Apply for Car Finance?
No. In Australia, you must be at least 18 years old to legally apply for a car loan. This is because car finance is a legally binding contract, and minors cannot enter into such agreements on their own.
✔️ 18 is the legal minimum age for car loans
✔️ Even with a job, you can’t apply for finance under your name if you’re under 18
✔️ However, alternative financing options exist, such as guarantor loans or family support
While you can’t get car finance before 18, there are still ways to prepare for car ownership early.
🔍 What Are Your Options If You’re Under 18?
| Option | How It Works | Pros | Cons |
|---|---|---|---|
| 👨👩👧 Guarantor Loan | A parent or guardian co-signs the loan. | Improves approval chances. | The guarantor is responsible if you miss payments. |
| 💰 Buy a Car with Cash | Save up and pay outright. | No debt or interest. | Takes longer to afford a car. |
| 🚗 Parent Financed Car | A parent takes out a loan in their name and you make the repayments. | You get a car sooner. | The loan doesn’t build your credit history. |
| 🔄 Rent-to-Own Option | Some dealerships offer alternative financing for young drivers. | Flexible payment plans. | Higher long-term costs. |
✅ How to Prepare for Car Finance Before Turning 18
If you plan to apply for car finance as soon as you turn 18, follow these steps to improve your approval chances:
1️⃣ Start Building Your Credit – Have a phone plan or utility bill in your name to establish credit.
2️⃣ Save for a Deposit – A higher deposit reduces the amount you need to borrow and improves approval odds.
3️⃣ Get a Stable Income – Lenders prefer applicants with at least 3–6 months of regular income.
4️⃣ Consider a Guarantor Loan – A parent or guardian can co-sign the loan to help you qualify.
5️⃣ Understand Your Budget – Research car loan repayments to ensure you can afford the monthly costs.
6️⃣ Work with a Finance Broker – Brokers help find lenders that specialize in young applicants.
🚨 What If You Need a Car Before Turning 18?
If you need a car but can’t legally apply for finance, consider these alternatives:
✅ Ask a Parent to Finance the Car – They can take out a loan and you make the repayments.
✅ Save for a Cash Purchase – If possible, buy a cheaper second-hand car without finance.
✅ Use a Guarantor Loan – A parent can co-sign the loan when you turn 18.
✅ Consider Rent-to-Own – Some dealers offer alternative finance options for younger drivers.
🚀 How a Finance Broker Can Help Young Applicants Prepare for Car Loans
A finance broker can assist by:
✅ Finding Lenders That Accept Young Applicants – Some lenders specialize in first-time borrowers and young drivers.
✅ Helping You Strengthen Your Loan Application – Brokers ensure you meet the lender’s approval criteria.
✅ Advising on the Best Car Finance Options – They help compare loans to find the best deal when you turn 18.
🔑 Final Thoughts
If you’re under 18, you can’t legally apply for car finance, but you can prepare by building credit, saving for a deposit, and considering alternative financing options. As soon as you turn 18, having a stable income and financial history will improve your chances of getting approved.
🚗 Want to get car finance at 18? Start preparing today with expert advice from a finance broker!
DISCLAIMER
The information provided on this website is general in nature only and has been prepared without considering your financial needs, circumstances and objectives and should NOT be construed as financial, taxation or legal advice. For more information, get in touch with our experienced partner brokers today.
