Are there car loans specifically for Aboriginal Australians?
Whilst there are no car loan products created exclusively for Aboriginal Australians, there are a number of government services and community organisations that provide financial advice for our First Nations people.
If you are looking for an Aboriginal Home Loan, you can find out more information about how this works here.
Which services can provide financial advice specifically for Indigenous Australians?
If you’re an Aboriginal Australian and you’re in the market for a car loan, here are a few services you might want to get in touch with for financial advice:
- Mob Strong Debt Help (Australia wide) - Mob Strong Debt Help is a free legal advice service for Aboriginal and Torres Strait Islander peoples in Australia. You can call their Helpline on 1800 808 488 for financial advice. They provide free telephone legal advice about credit, debt, banking and insurance and may be able to:
- Negotiate with your bank, insurer or other lender/debt collector
- Help you to argue your case in a free external dispute resolution service (like the Australian Financial Complaints Authority - AFCA)
- Represent you in court (only rarely)
- Refer you to other organisations which may be able to help you, particularly if you have a matter in the court of a State or Territory outside NSW
- ICAN (QLD Only) – the Indigenous Consumer Assistance Network provides financial counselling services, funded by the Commonwealth Department of Social Services and the Queensland Department of Communities, Child Safety and Disability Services. The service caters for all people living in Townsville, Cassowary Coast, Cairns, Tablelands, Cape York and the Torres Strait.
- Australian Securities and Investments Commission (ASIC) – ASIC provides free financial advice for all Australians, and has many online tools to help you understand what to look out for in the financial services industry. Its “Be Smart, Buy Smart” guide was written specifically for our First Nations people, to give you the insider information you need to make an informed financial decision. They have also created a page on their MoneySmart website specifically dedicated to sharing money tips for Aboriginal and Torres Strait Islander people.
Applying for a car loan in Australia
Aboriginal Australians, just like all other Australians, may be eligible for a car loan if they meet the loan criteria.
Employment status, annual income and expenses are all taken into account when you apply for a car loan, so it’s important to check you can make repayments before you apply for any financial product.
If you don’t think you will be approved for a car loan, do not apply.
Signing a contract for a car loan that you cannot afford can negatively impact your credit score and make it much harder for you to apply for a loan in the future.
Grants of up to $10,000 awarded to boost financial literacy amongst our First Nations People
On 4th October 2019, Good Shephard Microfinance announced grants of up to $10,000 have been awarded to 27 community organisations working to improve the financial resilience and capability of Aboriginal and Torres Strait Islander people.
These organisations, which include the Bowen Neighbourhood Centre in Queensland, Global Care Dubbo in New South Wales and Broome Circle in Western Australia, are due to receive grants from the Indigenous Money Network, a joint initiative of Australia’s largest microfinance charity, Good Shepherd Microfinance, and NAB.
The following offers are not car loans specifically for Indigenous Australians. We’ve shown you these car loans to help you compare what’s available in the Australian car loan market, and make a more informed financial decision.
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Yes, you can get a car loan with bad credit, although you’ll probably find the process trickier and dearer than that experienced by people who have good credit histories.
You can find a number of lenders that specialise in bad credit car loans. However, make sure you compare bad credit car loans before you sign on the dotted line, because not all car loans are alike and having bad credit may mean you are more likely to be hit with higher fees and interest rates.
If you have bad credit, it’s important not to take out a car loan unless you can afford the repayments because a default could further damage your credit rating. Conversely, if you make all the repayments and repay the loan successfully, your credit rating might improve.
Being a student is tough enough, and while you might find the odd student discount on movies and technology, the same can’t be said about car loans, as you can’t really get a discounted student car loan.
Lenders make money on the interest and fees that they charge with loans, and the lowest interest and fees are given to the most reliable credit holders: people with excellent credit history.
As a student, you are unlikely to have enough on your credit report to warrant an excellent history. There are however, ways of getting a lower interest car loan if you can’t get an interest-free loan from the bank of mum and dad. One way of doing this may be through getting a guarantor car loan, which can get you a secured car loan by setting your parents up as guarantors.
Even if you’ve been denied a car loan before, you might still be able to get car finance. The key is to make the right application to the right lender.
The ‘right’ application is one that makes you look like an acceptable risk, which might include things like improving your credit score, increasing your savings rate and accumulating a bigger deposit.
The ‘right’ lender is one that deals with borrowers like you. For example, while some car loan lenders only deal with good credit borrowers, there are others that specialise in bad credit or poor credit borrowers.
If you already own a car, you could potentially bring down the cost by selling your car in the process. Before that happens, though, you’ll need to find out how much your car is worth.
One of the first places to find this value is to research the value of your current car, giving you an idea of roughly how much it’s worth in its peak condition.
There are plenty of websites that offer a free online valuation, allowing you to enter your car’s make, model, year, badge and description, with results listing a price guide based on both selling your car privately and through a dealership.
Of course, dealerships will try to profit on your trade-in by buying it for less than they can sell it, making it highly unlikely that you’ll get the same price selling a car to a dealer as you would selling a car privately.
However, private car sales can be costly and can take months to sell, making car trading more convenient with a guaranteed return, even if you may not be able to realise the total value of your car’s worth.
Remember that everything is negotiable. If the dealership is offering you less for your trade than you wanted, try to negotiate elsewhere to gain that money back. Start by negotiating on the price of the trade and then ask them if they can give you a further discount on your new car.
There are four different ways you can get a car loan. You can go straight to a lender. You can get a finance broker to organise a car loan for you. You can get ‘dealer finance’ – which is when the car dealer organises a car loan for you. Or you can organise your own car loan through a comparison website, like RateCity.
Whichever method you choose, you will need to provide proof of identification, proof of income and proof of savings. So you may be asked for any combination of passport, driver’s licence, bank statements, payslips, tax returns and utility bills. You might also be asked to provide proof of insurance.
Lenders that provide bad credit car loans tend to be smaller challenger lenders rather than the bigger banks.
Bad credit car loans are a niche product. The bigger banks tend to focus on mainstream car loan finance for borrowers with better credit histories. That’s why smaller lenders tend to be the ones that provide bad credit car loans.
Bad credit car loans can have high interest rates and fees, so it’s important to compare options before submitting an application.
Student car loans are not a necessarily a product in and of themselves, but what you may be looking for is a guarantor car loan.