Bad Credit Car Loans No Deposit
Want to buy a car without paying your savings upfront? You could qualify for a car loan with no deposit, even with bad credit.
Needing a car but not having the cash for a deposit is a common spot to be in, and it gets even trickier when your credit history isn’t perfect. The good news is you don’t need one to rule out the other. Lenders across Australia work with borrowers who have bad credit and no deposit every day, though how your loan is structured and what it costs you will depend on your situation.
Bad credit doesn’t mean no options, and no deposit doesn’t mean no car. It just means understanding how these loans work, what lenders are looking for, and where the trade-offs sit before you apply.
Can I get a car loan with no deposit if I have bad credit?
Yes, no-deposit car loans are available to borrowers around Australia, even those with bad credit. Car loans without a deposit are standard within the industry, but there aren’t always quite as many options for those who’ve struggled with their credit.
Lenders assess your ability to repay the loan under Australia’s responsible lending obligations, and a deposit is one of the ways they offset their risk. There may be cases where, without one, your lender isn’t willing to lend you the full sum, so it’s important to consider your options or apply with a broker who can point you in the right direction.
When might I have to pay a deposit on my bad credit car loan?
A deposit tends to come into play when a lender sees your car loan application as higher risk than usual. This can include:
- A more serious credit issue: finance defaults, court judgements or past bankruptcy carry more weight than a few missed payments here and there.
- Tight borrowing capacity: if your income is tight relative to your expenses and the loan amount, a deposit can bring repayments down to a level your lender is comfortable approving.
- An older or higher kilometre vehicle: these are generally seen as riskier security, so a lender may ask for a deposit to reduce how much they’re lending against the car’s value.
- A shorter credit history: lenders with less to go on may ask for a deposit as a way of balancing the unknown.
- An undervalued car: in cases where your lender doesn’t believe the car you’ve chosen is worth the price you’ve agreed to pay, you’ll have to make up the difference yourself.
Even if a deposit isn’t strictly required, putting one down can work in your favour. It shows the lender you’re financially committed, and it usually means a smaller loan amount, lower repayments and less interest paid over the life of the loan.
How much will my no deposit bad credit car loan cost?
Skipping the deposit means financing the full price of the car, which pushes up your monthly repayments and the total interest you’ll pay over the life of the loan compared to putting even a small amount down. Here’s how that plays out on a $30,000 car loan at 15.00% p.a. over five years:
| Deposit | Amount financed | Loan term | Interest rate | Monthly repayment | Total interest paid |
|---|---|---|---|---|---|
| 0% | $30,000 | 5 years | 15.00% p.a. | $714 | $12,822 |
| 5% ($1,500) | $28,500 | 5 years | 15.00% p.a. | $678 | $12,181 |
| 10% ($3,000) | $27,000 | 5 years | 15.00% p.a. | $642 | $11,540 |
| 15% ($4,500) | $25,500 | 5 years | 15.00% p.a. | $607 | $10,899 |
| 20% ($6,000) | $24,000 | 5 years | 15.00% p.a. | $571 | $10,258 |
Even a 10% deposit brings your monthly repayment down by more than $70 and saves you over $1,200 in interest across the loan. It’s worth weighing up against the convenience of not having to save one.
Beyond the deposit and loan size, though, a few other things shape what your finance deal will actually cost:
- Interest rate: the higher your rate, the more you’ll pay in interest over the life of the loan. Bad credit borrowers are typically offered higher rates than those with a clean credit history.
- Loan fees (establishment and ongoing fees): some lenders charge an upfront establishment fee and ongoing monthly or annual fees, which add to the overall cost on top of interest.
- Loan term: a longer term lowers your monthly repayment but increases the total interest you pay.
- Early repayments: paying off your loan faster than scheduled, where your lender allows it, can reduce the total interest you end up paying
Can I include other costs in my no-deposit car loan?
Yes, some lenders will let you roll extra costs into your car loan rather than paying them separately upfront, including:
- Registration and CTP insurance
- Motor vehicle duty
- Comprehensive car insurance
- Additional dealer delivery charges
This is added to your loan amount and paid off along with the rest of your repayments, which means you could end up borrowing more than 100% of the car’s actual value once everything is included.
It can make getting into a car loan more manageable when you don’t have much cash to put down, but it’s worth keeping in mind that a bigger loan means higher monthly repayments and more interest paid over time. Ask your lender or broker exactly which costs can be included before you apply, since this varies between providers.
How to apply for a bad credit car loan with no deposit
-
1
Complete our online application
Give us a few details about your situation, your finances and the no-deposit car loan you're after.
-
2
Provide your supporting documents
We'll ask for proof of income, identification and your current expenses so we can match you with a lender comfortable financing the full amount.
-
3
Speak with your broker
Your broker will call to talk through your options, including whether a small deposit could improve your rate or approval chances.
-
4
Choose your car
Not sure what you're after yet? Our in-house car broker service can help you find one through our network of dealers.
-
5
Submit your application
Once you're ready to move forward, your broker will get your application ready and submit it on your behalf.
-
6
Get approved and settle
Approval can come through in as little as one business day, and we'll take care of settling your loan from there.
-
7
Pick up your keys
Sign the final paperwork and your car is ready to drive away.
Why us?
Fast loan approval
We work hard behind the scenes to match you with a suitable lender and have your loan approved and funded in as few as 48 hours.
100% online
Where ever you are across Australia, you can apply for a bad credit car loan using your laptop or even a smartphone.
Trusted brand
For more than a decade, we've been helping borrowers with bad credit get approved for their car loans across Australia.
Bad credit car loan eligibility and documentation
Eligibility
- You must be 18 years of age or older
- You must be an Australian citizen, permanent resident or eligible visa holder
- You must be employed and earning a stable income that supports your car loan payments, which can start from as little as $480 per week
- You mustn't currently be bankrupt
- Your chosen car must satisfy your lender's vehicle eligibility criteria
Documentation
- A valid driver's licence, front and back (passports can also be accepted)
- Your two most recent consecutive payslips
- 90 days of bank statements and/or Centrelink income statements
No-deposit bad credit car loan questions answered
Do I need a guarantor for a no-deposit bad credit car loan?
Not necessarily, though it can help. A guarantor gives your lender extra security since they're agreeing to cover repayments if you can't, which may improve your chances of approval or help you access a better rate without needing a deposit.
Can I get a no-deposit car loan if I'm on Centrelink?
Yes, Centrelink payments can count as income for a car loan application, and some lenders are open to no-deposit applications on this basis. You'll still need to show you can comfortably meet the repayments alongside your other expenses.
Does applying for a no-deposit car loan affect my credit score?
A single application can cause a small, temporary dip in your credit score, since it shows up as a credit enquiry. Multiple applications in a short space of time can have a bigger impact, so it's worth applying through a broker who can match you to a suitable lender first rather than applying with several lenders yourself.
Can I refinance later to reduce my repayments?
Yes, refinancing may be an option once your credit situation improves or you've built up some equity in the car. It could help you access a lower rate or better terms than what you started with.
Can I use a trade-in instead of a cash deposit?
Yes, you may be able to trade in your existing vehicle with the dealership you’re buying your new or used car from as an alternative to paying cash. This will take money off the purchase price of your new car, which in turn lowers the amount you’ll need to borrow. Before signing on the dotted line, though, you should consider whether the price you’re being quoted for your old car is what it’s worth or whether you could receive more money by selling your car separately.