2 out of 3 new Aussie car buyers rejected due to poor credit

Do you know what your current credit rating is? If not you may want to find out, especially if you’re in the market for a new set of wheels, because according to MyCRA Lawyers, more and more Aussies looking to take out a car loan are being rejected due to a poor credit rating.

In fact, CEO Graham Doessel reported that Aussie car sales in the new year are the lowest they have been in eight years, which is likely a result of stricter borrowing regulations enforced after the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

Of course while that may be true, it doesn’t mean that you can’t take steps to protect your credit rating and make sure you keep your eligibility for a car loan intact. 

What can you do to keep your credit rating healthy?

If you know you have a car purchase coming up - whether it’s buying your first set of wheels or trading in a car that’s on its last legs - a little preparation can go a long way. Making sure you’ve got your credit in order can help you avoid being one of those Aussies rejected when it comes to the crunch.

You can access a free copy of your credit report once every year from the major credit reporting bodies in Australia. So first things first, get hold of your report and check there aren’t any errors and that everything is up to date. 

If you’ve discovered your credit score has seen better days, it’s time to start repairing it. To do this, you can:

  • Make sure you pay all your bills or even fines on time, as late repayments are recorded on your credit report. You could even set up a direct debit where possible, so that you don’t have to worry about penciling due dates into your calendar.
  • Cut down on the number of credit sources you have access to. Having a high overall credit limit available to you can damage your chances of getting a new loan, so if you’ve got old credit card accounts you don’t use, it’s time to close them down.

RELATED ARTICLE: Credit reporting changes will boost thousands of credit scores this February

Find the right car loan for your needs

After spending some time getting your credit score in order, the next step is finding the right car loan to apply for. There are a few things to keep in mind when choosing a car loan, especially if your credit history is still recovering:

  • Some lenders will offer you an interest rate that depends partly on your credit - the lower your credit score, the higher the interest rate you get. So be aware of this when you compare car loans, and look for one that will be a good deal for your situation.
  • If your credit history was damaged because you sometimes struggle to make repayments, consider taking out a longer loan. All other things being equal, spreading repayments out over a longer loan term will ultimately cost you a little extra in interest, but will mean lower monthly repayments, which can help you stay on top of them.
  • Secured car loans are more common, and generally have lower rates than unsecured loans. Most will use the car you’re purchasing as collateral, so it’s worth considering a secured loan to snag a lower rate.

Ready to start? Head over to compare car loans or get started with what’s on offer below. You’ll be putting the keys in the ignition and rocking out to R. Kelly before you know it!

Compare secured car loans - last updated 9 December 2023

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  • New Car Loan - Special

    Home Owner Discount, Including Demo, Variable, Secured

    Interest rate
    comparison rate
    Monthly repayment
    6.24% p.a.
    7.36% p.a.based on $30,000
    over 5 years

    Low variable car loan rate for purchasing new and demo vehicles from dealers. Personalised loan amounts between $5,000 and $150,000. Flexible repayment options. Choose between the 3 to 7 year loan terms. Good credit history. Stable employment history and Australian citizenship or PR required.

    Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 6.24% would cost $35,880.27 including fees.

    Details
  • New Car Loan - Special

    Including Demo, Variable, Secured

    Interest rate
    comparison rate
    Monthly repayment
    7.74% p.a.
    8.85% p.a.based on $30,000
    over 5 years

    Low variable car loan rate for purchasing new and demo vehicles from dealers. Extra low rate for qualifying homeowners. Personalised loan amounts between $5,000 and $150,000. Flexible repayment options. Choose between the 3 to 7 year loan terms. Good credit history. Stable employment history and Australian citizenship or PR required.

    Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 7.74% would cost $37,153.94 including fees.

    Details
  • Used Car Loan

    Fixed, Secured, No vehicle age limit

    Interest rate
    comparison rate
    Monthly repayment
    6.57% p.a.
    7.19% p.a.based on $30,000
    over 5 years

    Get a competitive fixed interest rate on a secured used car loan of up to $75,000 depending on your credit score. No vehicle age limits. Easy online application. Fast pre-approval. Pre-approved funds held for up to 3 months. No monthly account keeping fees, no exit fees and no early repayment fees. Flexible weekly, fortnightly or monthly repayments on terms from 1 to 7 years.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 6.57% would cost $35,528.12 including fees.

    Details
  • New Car Loan

    Fixed, Secured, Excellent Credit Score [832+]

    Interest rate
    comparison rate
    Monthly repayment
    7.29% p.a.to 7.79% p.a.
    8.00% p.a.to 8.50% p.a.based on $30,000
    over 5 years

    Enjoy a quick application process and no monthly fees on NRMA new car loans. Finance also available motorcycles, caravans and motorhomes. Low fixed interest rates with terms of up to seven years. Plus, NRMA Blue Member benefits apply so you could enjoy even lower rates as an NRMA Member**.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 7.29% would cost $36,387.95 including fees.

    Details
  • Car Loan

    Up to 10 years old, Fixed, Secured

    Interest rate
    comparison rate
    Monthly repayment
    6.69% p.a.
    7.04% p.a.based on $30,000
    over 5 years

    Purchase or refinance a new or used vehicle, up to five years old. Choose a loan term from one to seven years. To be eligible you must be over 18, receiving a regular income and an Australian resident.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 6.69% would cost $35,629.48 including fees.

    Details

* WARNING: The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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