How To Get A Car Loan

If you’re buying or financing a car for the first time, a loan will allow you to borrow a certain amount of money to purchase a vehicle that’s just right for you. We get that it’s a lot more convenient to have your own vehicle, whether you’re intending to use the car primarily for work or play such as running to the shops, travelling to the office or dropping the kids to school. Budget Direct reports that the average vehicle travelled 13,301km per year, or 36.4km per day, with a total of 255,031 million kilometres travelled on Australian roads in 2018 by all vehicle types.

The cars we drive say a lot about us and financing one is easier than you think. In return for the loan, you pay fees and interest to the lender that provided you the money. You then pay back the loan within a certain period of time, ranging from two to four years. According to Finder, as of March 2021, approximately 14% of Australians currently have a car loan, while around 19% of Australians have previously taken out a car loan to purchase a vehicle at some point.

The best way to get started is simply a case of narrowing down a lender and applying online. At Rapid Loans, we understand that purchasing the ideal vehicle can be expensive and not everyone has the money to pay for a car up front in cash. A loan is a great option if you haven’t got enough in savings, but you can afford to repay a loan in weekly, fortnightly or monthly instalments. With nearly 1.1 million cars purchased every year for the past seven years, according to Cars Guide, nothing beats that new car smell!

How to get a car on finance?

Rapid Loans offers vehicle loans from $5,000 to $25,000, because we know that all adventures start with a dream and big dreams have small beginnings. All vehicle types including trucks, motorbikes, boats, caravans, passenger vehicles, sports utility vehicles (SUVs) and utes will typically be considered for a standard car loan. According to Finder, in 2020, the most popular brands were Toyota (22.3%), Mazda, Hyundai, Ford and Mitsubishi. The Electric Vehicle Council also showed that in 2019, electric vehicle sales increased by over 200%, reaching 6,718 total sales across Australia. We think that whoever said money can’t buy happiness, just never bought the right car!

If you think purchasing a vehicle on finance is right for you, these are the steps involved in getting a car loan with Rapid Loans:

  1. Submit an application for the loan.
  2. If your application is pre-approved, Rapid Loans will agree to lend you a certain amount to buy the vehicle, sometimes with conditions required to finalise the loan. You can take your pre-approval with you to the dealership or private seller to show that you have access to funding.
  3. Find your perfect car and sign a purchase agreement with the dealer or private seller.
  4. Provide details of the car to Rapid Loans, and satisfy any conditions noted on your pre-approval.
  5. Providing all conditions are met, and once the loan contract is signed, Rapid Loans will pay the dealer or the private seller directly on your behalf.
  6. You pay Rapid Loans back, usually over a period of two to four years.

You can apply for two weeks of conditional pre-approval for a certain amount before going shopping so you know exactly how much you can spend and how much your repayments will be. This gives you better insight on your possible price range before heading to a dealer or browsing an online marketplace. While this ensures you aren’t shopping for a Lamborghini on a Honda Civic budget, it may also open up options for vehicles that you might not have otherwise been able to afford. It might also take away a bargaining chip that the dealer can use to extract a higher price or allow you to resist pressure from the dealer to use their finance for the vehicle.

Despite this, some major benefits of buying through a dealer is that they are obligated by law to offer you a warranty (dependent on age of vehicle and how many kilometres it has done), they may give you a cooling off period and you might be able to trade-in your current car if you have one. This saves you the hassle of having to unload it as a private seller yourself! A dealer will also handle all the paperwork associated with ownership or title transfer and registration while being able to offer additional services like roadside assistance. Dealers also have a reputation to uphold which is why they’ll ensure a great quality product and service.

If you’d prefer to shop and negotiate a price privately or at an auction, it’s worth noting that private sales aren’t protected by the same laws as dealers so faults won’t be covered by Fair Trading. Many lenders also have a maximum age of cars they are willing to finance, some as low as five years as used cars are often considered riskier to finance than new cars. One of the benefits to the buyer of purchasing a car that’s a few years older means you let the first owner take the hit in depreciation. When purchasing through a private sale, do your due diligence when it comes to looking over the car. Whether that’s the bare minimum required to legally buy or sell the car, through to a comprehensive pre-purchase mechanical inspection. As the buyer, you are responsible for checking the vehicle against the Personal Property Securities Register (PPSR) to check for financial interests (encumbrances) for a small fee. If you’re financing through Rapid Loans, this PPSR check is included in the service.  As a base line, you may like to ask the seller the following:

  • Why are they selling it?
  • Has it ever been damaged or in an accident?
  • Has it had any major repairs?
  • How detailed is the car’s service history and is it with the car?

Even if you’re not an expert, having a good look over the car in the flesh is very important before agreeing on any purchase. When bargaining down from the seller’s asking price, make a list of any faults you discovered during the inspection and negotiate based on the cost of fixing these problems. If you’re confident you’re buying a car in satisfactory condition, it passes your own inspection and you’ve negotiated the price, make sure all the registration and service history paperwork is in order, and the details match the seller. If you’re making a payment or even a deposit, get a receipt and make sure the seller’s full details are on it.

Rapid Loans uses secured loans for all finance, meaning the car is used as security against the loan so if you default on the loan, Rapid Loans may repossess your car. The fixed term interest rate will apply on the total loan amount from the time you take out the loan. There are lots of different car loan terms available, but most lenders will allow terms between one and seven years, with 10 years being the maximum.

To progress with your vehicle finance, we need to know the basic details of the car you wish to buy, including how much it will cost. You will generally need to supply the following:

  • The dealer invoice or contract of sale, if purchasing through a dealer.
  • The vehicle chassis number.
  • The year, make and model of the car.
  • Any information on the vehicle’s registration.

It’s worth thinking about the other costs that are associated with purchasing a new vehicle which may be included in the cost of your loan if purchasing with a dealer, such as stamp duty. You will also need to provide proof of comprehensive car insurance before receiving the stamp of approval. This will assist you in repaying the loan if the car is ever damaged so badly it needs to be written off or if it is stolen. You will need to maintain comprehensive car insurance cover until the loan is paid in full.

Can I still get a car loan if my financial situation isn’t ideal?

Our car loan assessment process is thorough and takes your individual circumstances into account. At the same time, we are committed to assisting our clients to purchase the car of their dreams wherever possible. We take a holistic approach to your car loan application as we understand that everyone’s financial situation is unique.

We recommend being honest about your financial situation in your application and consider your credit score to manage your expectations for application success. A credit score depicts your creditworthiness and is based on your credit history such as the number of open accounts, total levels of debts and the number of credit applications you’ve made and whether you pay on time. For example, if you have previously defaulted on loan repayments or have often been late in making credit card payments, a lender may reduce the amount they are willing to lend you, or even reject your loan application altogether.

You can check your credit score using an online provider, usually free of charge. You have the right to get a copy of your credit report and credit score for free every 3 months. Your credit report will show you:

  • Your credit products.
  • Your repayment history.
  • Defaults on utility bills, credit cards and loans.
  • Your credit applications.
  • Bankruptcy and debt agreements.
  • Your credit report requests.

When you get your credit report, check that all the loans and debts listed are yours and details such as your name and date of birth are correct.

Depending on the credit reporting agency, your score will be between zero and either 1,000 or 1,200. The score relates to a five-point scale, from excellent to below average. A higher score means the lender will consider you less risky and can sometimes lower the amount of interest you’ll pay, while a lower score will affect your ability to get a loan or credit.

We understand that debt can add up quickly and before you know it, you may find yourself owing money to a number of different providers. If you have existing debts with multiple providers, cleaning them up by consolidating them, making all bill and credit repayments on time and paying off loans can improve your credit score over time. It’s also recommended to be realistic in your expectations and pick a modest car while making extra payments where you can as you’ll pay off your debts faster and save on interest. A debt consolidation loan is a single loan taken out to pay off other loans that you may have, such as short term loans or other personal loans with balances remaining. Rapid Loans can put all of your payoffs in one simple place, with competitive rates and flexible terms and repayment options. This means you only have to make one payment a week, fortnight or month instead of numerous payments. Ultimately, this can significantly reduce the unmanageable feeling surrounding handling several different debts, reducing your level of stress and encouraging financial independence.

Can I get a car loan with part time or casual income?

If you’re not working full time, that’s no problem! You are welcome to apply for a car loan with Rapid Loans if you are:

  • Employed part time or as a casual.
  • A sub-contractor or self-employed business owner.

According to the Australian Bureau of Statistics, there were 2.3 million casual employees (22% of employees) in 2020. We consider employment casual if the following applies:

  • You do not have a permanent employment contract.
  • You are not paid sick leave or annual leave.
  • You typically work irregular hours, or your employment is based on hourly demand.
  • You receive a higher hourly rate to compensate for the loss of benefits.

Regardless of your employment status, you should always work out how much you can afford to repay, and therefore borrow, before taking out a loan. You can do this by assessing your budget by using our loan calculator to estimate the total cost of the loan and what your weekly, fortnightly or monthly car loan repayments could be. This could put you in a better position to make an informed decision as to how much you can afford for your repayments and if you might need to look for a cheaper car to fit in with your budget.

At Rapid Loans, we use the latest up to date technology so you can submit everything electronically with no fuss, providing us secure access to your relevant information and you with more time in your day. We also recommend demonstrating your ability to save, as having a deposit and long-term savings history is a great way to show you are reliable, though it is not strictly essential.

Casual employment is very common in Australia so don’t let this discourage you or hold you back from financing a car.

It is important to know that if you stop working, or the car stops working, you’re still required to pay back the loan. Should your employment change suddenly and you are unable to make the minimum repayments, you should contact us as soon as possible to discuss your situation.

Can I get a car loan?

Applying online with Rapid Loans is easy, we’ve made it so there are just a few simple screens from start to finish. If you have your documents on hand, you can complete your application in just a few minutes by supplying them electronically. You might not have to tick off everything in this list but here is what you may be asked for:

  • Payslips, PAYG statements and tax returns.
  • Credit card statements and existing personal or car loan statements.
  • Mortgage, lease or rental agreements.
  • Bank account statements for each of your accounts, including term deposits and shared accounts.
  • Details of investments and valuables.
  • Contracts, outstanding invoices, profit and loss statements if you work for yourself.

Once you send your application, it goes straight to one of our loan consultants in real time. You are our priority, so we’ll put the pedal to the metal and be in touch within just a few business hours. We’re known for providing trusted support and with over a decade of experience, we’re always thinking outside the box to find new ways to be unique from traditional lenders. Your eligibility for a car loan and the amount you may be able to borrow depends on the following variety of factors:

  • Your financial circumstances such as income, credit rating and history, assets and liabilities.
  • Your citizenship or residency status.
  • Your lifestyle.
  • The type of car you’ve chosen such as the model and whether the car is new or used.

You are even welcome to apply for a car loan if you’re receiving government benefits or are on your learner’s permit! However, you must be able to show 3 months of continuous income and place of residence.

If our loan consultants receive your application before midday and everything is in order, there is every chance they will be able to clear it that day. Apply online now for a rapid response on your next car loan!