Hey! Is this your first car loan?

Don't stress - most people under 25 have never had credit before. Before you scroll below to the article, I'll give you few pointers on the loan process, so that you know what lenders look out for, and how to increase your chances of approval.

First, lets talk about your "profile"

Your "profile" is basically where you stand in your chances at approval and what rates you are eligible for.

A first time lend is not the strongest profile, BUT...

There are some ways to increase your chances of approval if you know what lenders look for to approve your loan.

What lenders look for:

You are stable in your job (click to read more)

Lenders want to see you have been in your job for a minimum period of 6 months. They love it when you have been in your job for over 1 year.

How do lenders check how long you have been employed for:

Lenders can verify by one of these ways:

- They see your Year-to-date (YTD) Income is in-line with you having worked at that company since July 1 at the very least.

- They see your annual leave balance is high (magic number is typically 60 hours + showing on your payslip)

- They could call your employer to verify how long you have been in the role for.

What if...

You are casual?

Lenders will most likely call your employer to verify tenure, and confirm your line of work is ongoing for the foreseeable future. Note that if you are employed casual, you need to at minimum be working near full-time hours to qualify for your first car loan.

What if your employer changed their company ABN / payroll system?

Again, same rules apply as above, the lender will most likely call your employer to verify the ABN / payroll system change.

You have good "rateable" credit (click to read more)

"Rateable credit" means you can prove you have been an on-time payer on other loans.

If you have never taken out a loan before, move to the next pointer. If you do have a current loan, read on below.

How do you prove you are an on-time payer on your other loans?

The most common way the lenders verify you are an on-time payer is through your credit file that the lender has access to. If you have paid your loans on-time, your credit file will show this to the lender, and this substantially increases your chances of approval, how quickly you get approved, and what rates you qualify for.

You decide to place a deposit on your car (click to read more)

Showing the lender that you are willing to put some money up-front on your first car loan, instantly tells the lender that you:

  • Are financially responsible
  • Are wanting to put skin in the game
  • Already have some savings (a fallback position) in your finances in case your source of income gets affected.

Just like if you have rateable credit or have been in your job for over 12 months, lenders see this as a major positive in your application and will increase your odds and speed of your approval.

If you are thinking of placing a deposit, consider placing 10% - 20% to increase your approval chances.

You are realistic with your requested loan amount and car (click to read more)

The first thing a lender sees when they pick up your application is the car you want, and the loan amount.

You may have ticked every other box above, however if you pick a sports or exotic car for $80,000, the lender will instantly throw your loan into the bin.

This is your first loan, you need to demonstrate to the lender that you are realistic with the car you are wanting.

Try to keep your first loan amount under $30,000 and only choose a standard everyday car that can get you from A to B.

All that sounds brutal...

You are not alone thinking the application process is daunting, however you have come to the right place.

Ready to See Your Chances? We Can Check It for You...

Buying your first car is a huge milestone - and you don't need to figure it out alone. If you want to know how strong your profile looks (and what lenders would think of your application), we can check everything for you without affecting your credit score.

Whether you're working full-time, part-time, casual, doing an apprenticeship, or in your first proper job - there are lenders who want first-time buyers.

You just need someone who knows which lender is right for your situation.

Here's what happens when you apply:

A broker reviews your application the same day

If you apply on the weekend, you will receive a call first thing next business day.

We match you with a lender who suits first time borrowers

Your application would be sent to one of over 60 lenders for the best outcome.

You get personalised tips to strengthen your profile.

If it's best for you to wait a little bit longer to strengthen your profile, we'll tell you.

You stay in control the whole way

Whether you want to proceed with your car loan now or later, it will always be up to you.

Car Loan Mistakes First-Time Buyers Make (and How to Avoid Them)

Short answer: The costly mistakes are usually about focusing on the repayment instead of the total cost, applying in too many places, and signing at the dealership before you've read the contract. Most can be avoided by sorting out your budget and finance before you go car shopping.

1. Judging the loan on the weekly repayment

A lower repayment often just means a longer term or a balloon at the end. Example only: $30,000 at 9% p.a. costs about $623 a month over 5 years, with roughly $7,365 in total interest. Over 7 years the repayment drops to about $483, but total interest climbs to around $10,544. Look at the total amount payable, which must appear in the contract.

2. Shopping for the car before the finance

If you pick the car first, you're more likely to accept whatever finance is offered on the day. Knowing roughly what you can borrow, and at what cost, puts you in a better spot to negotiate. It also stops you falling for a car you can't comfortably afford.

3. Applying with several lenders at once

Each formal application usually leaves a credit enquiry on your file, and enquiries stay there for 5 years. Several close together can make lenders cautious. A licensed broker can look at a range of lenders and put in one application that fits your situation, rather than you trying lenders one after another.

4. Forgetting the costs on top of the loan

  • Stamp duty and transfer or registration fees, which vary by state
  • CTP and comprehensive insurance. Lenders usually require comprehensive cover on a financed car
  • Servicing, tyres, fuel or charging, tolls and parking

Moneysmart has a car loans guide that's worth reading before you commit.

5. Rolling add-ons into the loan

Extended warranties, tyre and rim cover, paint protection and loan protection insurance can add thousands to the loan. When they're financed, you pay interest on them too. Add-on insurance can't usually be sold to you on the spot when you buy the car, so you have time to think. Only take what you'd pay cash for.

6. Not checking a private-sale car

If you're buying privately, run a check on the PPSR first. It shows whether money is still owed on the car and whether it's recorded as stolen or written off. Lenders will usually do this too, but checking early saves time and heartache.

7. Stretching your income on the application

Lenders must verify your income and expenses, and they check bank statements. Overstating income or leaving out debts can get an application declined, or leave you with repayments you can't manage. Be accurate, even if it means a smaller loan.

Buying your first car on finance? Tell us about your situation in about 60 seconds and a licensed broker will call you. No credit check to enquire.

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General information only. This isn't financial advice. Finance the Ride is a referral service and doesn't hold an Australian Credit Licence. Last reviewed September 2026.

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All Your Questions Answered

What is a car loan and how does it work?

A car loan is a finance product where a lender provides funds for you to purchase a vehicle, which you repay over time with interest.

What’s the difference between secured and unsecured car loans?

Secured loans use the car as collateral, often leading to lower interest rates. Unsecured loans don’t, but usually have higher rates.

What loan terms are available for car finance?

Most car loans offer terms from 3 to 7 years. Find out what term suits you best.

How is interest calculated on a car loan?

Interest is based on the loan amount, term, and rate. Fixed-rate loans have predictable repayments, while variable rates can change.

Can I get a car loan for a private sale?

Yes, many lenders accept private sellers. You’ll need to provide extra documents.

Do government employees get lower interest rates on car loans?

Yes — many lenders offer better rates due to your stable income. Explore finance options for government employees.

Can I apply for a car loan while on probation?

Yes. Many workers are approved during probation.

What credit score do I need as a government employee?

A score of 650+ is ideal, but lower scores may still be considered.

Are corporate professionals eligible for low-rate finance?

Yes, especially if you're full-time with strong income.

Can I get car finance with a novated lease?

Yes, many government departments support novated leasing.

Can I get a car loan with no credit history?

Yes, it's still possible to get a car loan with no credit history.

What if I’ve been declined elsewhere?

A broker can help restructure your application for better results.

How do I check my credit score?

Use Equifax, Experian, or Illion for a free check.

Can I get finance if I have a current personal loan?

Yes, if your income supports both loans. A broker will assess your capacity.

What documents do I need to apply?

Typically: ID, payslips, and bank statements.

Can casual workers get car loans?

Yes, if you’ve worked consistently for 6+ months.

Can I apply if I’m self-employed with an ABN?

Yes. Consider a low-doc loan.

Can Centrelink be used as income?

Yes, when paired with PAYG income.

What’s the minimum income to qualify for car finance?

Most lenders prefer $30,000+ annually, but this varies.

Can I apply on a fixed-term contract?

Yes, especially if it’s government-backed.

Can I finance a used car?

Yes, most lenders allow used cars under 10 years old.

Can I get a loan for an SUV or family car?

Absolutely

Can I finance a caravan or motorbike?

Yes

Can I finance an EV or hybrid car?

Yes. You may even qualify for green car loan discounts.

Can I use my car for both work and personal use?

Yes you can.

What is a balloon payment?

It’s a lump sum due at the end of the loan term.

Can I make extra repayments?

Yes, many lenders allow this without penalty.

Can I pay off the loan early?

Yes — ask if there’s an early payout fee.

Is there a deposit required?

Not always.

What loan terms are available?

1 to 7 years is standard.

How long does approval take?

24–48 hours in most cases

Can I apply online?

Yes — most lenders and brokers accept online applications.

Is a broker better than going direct?

Often, yes. They can compare lenders for you.

Can I get pre-approved?

Yes — and it gives you better negotiating power at the dealership.

What happens after I apply?

Your documents are reviewed, and if approved, the lender issues funds to the seller.

Can I get a loan with a visa?

Yes, in some cases. see finance for visa holders here.

Do I need a driver’s licence to apply?

Yes, but learners may qualify with a co-applicant.

Can I apply with someone else?

Yes, joint applications are allowed.

Can I refinance my current car loan?

Yes — it can lower your repayments or get you a better rate.

Can I trade in my old car as a deposit?

Yes, many lenders accept trade-ins toward the deposit.

Can nurses get car finance?

Yes — see nurse-specific finance tips.

Can teachers apply while on contract?

Yes. Read how to get approved.

Do defence personnel get special car loan rates?

Yes, in some cases. Your job security is a major advantage.

Can FIFO government workers apply?

Yes — consistency in income matters more than job location.

Can I apply if I’m on maternity leave?

Yes, especially if you’re returning to work. Here’s how.

Can I use car finance to buy interstate?

Yes — just make sure the seller provides all required documents.

Can I finance a car from an auction?

Yes, but only through select lenders. Ask your broker first.

Will applying hurt my credit score?

Only if you apply to multiple lenders directly. Brokers help protect your score.

Can I get a car loan if I’ve been bankrupt before?

Yes — see bad credit car loan options.

What if I want to upgrade my car before the loan ends?

You can sell the car, pay off the loan early, or refinance.