Can't get car finance? Ways to have a car in Brisbane without a loan

Can't get car finance? Your realistic options

If a lender has said no, you have four ways forward, and they combine well:

1. Find out why, and fix what you can in your credit report and budget before applying again.
2. Buy a cheaper car outright with savings, so no lender is involved.
3. Rent by the week while you save or rebuild your record, paying as you go.
4. Avoid the products that make it worse: lenders that advertise to people with bad credit, and leases that cost far more than the car.

Which one fits depends on how soon you need a car and how long you'll need it. The sections below take each in turn.

Why was the car loan declined?

Moneysmart lists the usual reasons. On your credit report: late or missed repayments, unpaid debts, a lot of recent credit applications, or a default or serious credit infringement. In your finances: income too low for the amount, high expenses, or other debts.^[1]

Lenders also have a duty of their own. They can't lend if they believe you won't be able to repay, and must decline a loan that could cause you hardship even if you feel confident about it.^[1] So a "no" isn't always about your credit history; sometimes the amount was simply too large for your budget.

Ask the lender for the reason: if it was something in your credit report, the lender must tell you.^[1]

How do you fix your credit report before reapplying?

• Get your report free. You're entitled to a free copy every 3 months, and more often after a recent rejection. Australia has two main credit reporting bodies, Experian and Equifax, and they can hold different information, so check both.^[2][1]
• Correct errors yourself. You don't need to pay a credit repair company to fix mistakes; Moneysmart warns they can charge high fees for things you can do free.^[1]
• Know how long things last. A default stays on your report for five years (seven in some cases) and shows as paid once you pay it. Repayment history covers the last 24 months for each credit product.^[2]
• Hardship arrangements don't hurt your score as long as you stick to them; the listing is deleted after 12 months.^[2]
• Wait before applying again. Each application appears on your report, and too many in a short time can lower your score.^[1]

In the meantime, Moneysmart suggests reducing your debts, keeping up repayments and making a budget, which also shows a future lender you can manage money.^[1] Scores run from zero to either 1,000 or 1,200, depending on the agency.^[2]

Which finance should you be careful with?

• "Bad credit" lenders. Moneysmart warns that lenders who say they lend to people with bad credit or low income may charge high interest and fees and leave you worse off; always check the lender is a member of the Australian Financial Complaints Authority (AFCA).^[1]
• Dealer finance with layers of fees. The fine print may show fees going to several people, including dealer or introducer fees, so ask who's involved before signing.^[3]
• Balloon payments. A lump sum at the end lowers the regular repayments, but you repay it with interest, so the total cost is generally higher.^[3]
• Unsecured loans. The car isn't security, but the rate is often higher than a secured loan.^[3]
• Rent-to-own and consumer leases. You pay more than the sale price, usually with no cooling-off period, and at the end of a consumer lease you won't own the item. If it's lost or stolen you may still owe every payment to the end.^[4]

Whatever you sign, compare the comparison rate, which combines the interest rate and fees into one figure, for the same amount and term.^[3]

Buying a cheaper car outright

Paying cash avoids interest and credit checks, but leaves the car's risks with you. Budget for the running costs, not only the price: Moneysmart lists registration, insurance, servicing, tyres and repairs, fuel, parking, tolls and fines.^[5] What a year of those costs in Brisbane comes to is in the cost of owning a car in Brisbane.

Before paying for a used car, a Personal Property Securities Register (PPSR) search, A$2 for a vehicle report, shows whether money is still owed on it and whether it's been reported stolen or written off.^[5] The Queensland paperwork for buying a used car is in getting a car when you're new to Brisbane.

Renting while you save or rebuild

Renting isn't borrowing: you pay for the car a period at a time and hand it back when you no longer need it, with no loan to repay and no car to sell. It costs more per week than owning a cheap car for a long time, but nothing is tied up at the start except the first payment and a refundable bond. If a few months of renting lets you save a larger cash deposit, or let a default age on your report, it can be the cheaper path overall.

If you're waiting on a car that's already bought, see new car delivery delayed. If you've just come back to Australia after years away, the licence steps are in returning to Australia: your car and licence.