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Car loans for pensioners

You can still get a car loan as a pensioner or retiree but your options may be slightly limited.

Car loans for pensioners or those who are retired can be hard to come by. But it's not impossible.

Your loan application might be handled on a case-by-case basis and different lenders will have different eligibility criteria, but you should still be able to apply for a car loan.

In fact, according to our research, only 0.57% of 60 to 78-year-olds have ever been rejected for a car loan1.

If you're a pensioner and are looking to finance a car, read our guide and compare your loan options below.

Can I get a car loan if I am retired or on a pension?

Yes. You don’t have to be working to get a car loan, as long as you still have some kind of income, such as income from investments or other assets, Centrelink payments, a disability pension, age pension or another kind of pension.

However, your range of options will generally be more limited than someone who is still in full-time employment. To save time and avoid application fees, you’ll want to make sure you're eligible for a loan before applying.

There are two possible ways to start:

  • Find out how much you can borrow and then find a car to match. If you want to know how much you can borrow and then pick out a car based on that amount, you can be pre-approved for a car loan. If this sounds suitable for you, find out how to get pre-approved car loans here.
  • Decide what kind of car you want, then find a loan to match. This will often help you save money overall, because you might end up borrowing less, having lower repayments and finding a more competitive offer. Read on if you’re interested in doing it this way.
Generally, you’ll need to demonstrate that you’ll be able to keep up with repayments. A lender will look at how much you earn from your pension, any Centrelink payments or other income, then compare it to the repayment amounts.

This means your application is generally much more likely to be accepted when you’re borrowing smaller amounts. It might be a good idea to look at buying a used car rather than a new one and putting your savings towards the cost of the car so you don't need to borrow as much.

If you only need to borrow a smaller amount, such as under $3,000, you may want to consider a short term personal loan rather than a car loan.

This is because:

  • Car loans usually have higher minimums. Depending on the provider, you might not be able to get a car loan for amounts less than $3,000 or $10,000. You would then end up borrowing more than you need and paying more in interest than you should.
  • Car loans are usually secured. This means that if you can’t keep up with repayments, the car might be repossessed, leaving you out of pocket and without a car. You can also find unsecured car loans, although they have higher interest rates and sometimes have stricter requirements.

What criteria will I need to meet if I'm retired or on a pension?

Applications are handled on a case-by-case basis and different lenders will have different criteria that you will need to meet to be eligible for a loan. Generally, you’ll have to be able to prove to the lender that you can keep up with repayments. This mostly involves looking at the difference between your incoming payments and outgoing expenses and seeing if your budget also has enough room to cover the cost of your repayments.

Some lenders also have specific requirements in addition to this. These are:

LenderEligibility criteriaReview the loan
AutoCarLoans
  • Be over the age of 18
  • Have a good credit history
  • Be buying a new car or one less than 2 years old
  • Want to borrow more than $15,000
Review
Bank Australia
  • Be over the age of 18
  • Be an Australian citizen or permanent resident
  • Have a regular income
  • Have no history of bankruptcy
Review
BankSA
  • Be over the age of 18
  • Be an Australian citizen or permanent resident
  • The car you're buying will be less than 12 years old when the loan ends
Review
bcu
  • Be over the age of 18
  • Have another bcu product
  • Have a regular income
  • Have a good credit history
Review
Beyond Bank
  • Be over the age of 18
  • Be an Australian citizen or permanent resident
  • Earn more than $2,000 per month
Review
CommBank
  • Be over the age of 18
  • Be an Australian citizen or permanent resident
  • The car is less than 5 years old and not under finance
Review
CUA
  • Be at least 18 years of age
  • Be an Australian citizen or permanent resident
  • Have a good credit history
Review
Greater Bank
  • Be at least 18 years of age
  • Be an Australian citizen or permanent resident
  • Have a decent credit history
  • Be able to afford the repayments
Review
Heritage Bank
  • Be at least 18 years of age
  • Be an Australian citizen or permanent resident
  • Be able to afford the loan
Review
IMB
  • Be at least 18 years of age
  • Have a good credit history
  • Earn a regular income
Review
Latitude
  • Be at least 18 years of age
  • Be an Australian citizen or permanent resident
  • Have had a good credit history for the last 5 years
  • Have had no bankruptcies for the last 7 years
Review
NAB
  • Be at least 18 years of age
  • Be an Australian citizen or permanent resident
  • Earn a regular income or wage
  • Be able to afford the loan repayments
Review
NRMA
  • Be at least 18 years of age
  • Be an Australian citizen or permanent resident
  • Have not defaulted on any loan or credit in the last 3 years
  • Have not entered into bankruptcy in the last 7 years
  • Can provide evidence of a regular income
Review
RACQ Bank
  • Be over the age of 18
  • Be an Australian citizen, permanent resident or have an approved working visa
  • Have a good credit history
  • Earn a sufficient income to manage your repayments
Review
St.George
  • Be over the age of 18
  • Be an Australian citizen or permanent resident
  • The car you're buying will be less than 12 years old when the loan ends
Review
Stratton Finance
  • Be over the age of 18
  • Be an Australian citizen or permanent resident
  • Have a good credit history
Review
Westpac
  • Be over the age of 18
  • Have a regular permanent income
  • Be an Australian citizen or permanent resident
Review

What should I look for in pensioner car loans?

A car loan can be with you for a long time, often over five years, so it’s worth making a careful choice and considering the costs.
  • Secured or unsecured? You might be able to find better rates with a secured loan, but an unsecured loan might be less hazardous if your circumstances change and you fall behind on payments. It is generally easier to be approved for a secured loan, as it represents less risk for the lender.
  • What is the interest rate? Generally, the lower the interest rate, the lower the size of your repayments. However, you should also factor in any fees and charges to determine the true cost of the loan.
  • Fixed or variable rates? Fixed rates will stay the same over your loan term, while variable rates may change over the course of your loan. In favourable conditions, this means you may end up with a rate that decreases during your loan, but you also risk rates rising and having to pay more for your loan. If you’re on a pension, a fixed rate loan may be more suitable than a variable rate loan as it provides certainty around the size of your repayments.
  • What are the fees and charges? If you’re not sure you’re eligible for a loan, you might want to watch out for high application fees. Generally, fewer and lower fees are better, but you might find a loan that offers more value for money in the long run, at the cost of higher initial fees.
  • How much can I borrow? What are the minimum and maximum amounts you can borrow with different loans?
  • How long is the loan term? How long will you be making repayments? You will generally pay more in interest over a longer loan term, but the size of your regular repayments will be smaller. Lenders will also generally offer better rates to those who can pay off the loan in a shorter period of time.

When you apply for a loan, a provider might suggest loan terms to suit your financial situation. For example, a car loan for pensioners might be more likely to come with a longer repayment period and as a secured rather than an unsecured loan.

What if I have bad credit?

If you're a pensioner with bad credit, it's still possible to get a car loan, although your options may be more limited. You're more likely to be approved for a secured car loan, as this type of loan represents less of a risk for the lender. If you fail to make your repayments, the lender can take ownership of the vehicle to cover the cost of the loan.

You will also generally receive a lower rate on a secured car loan than on an unsecured loan, which means you may be more likely to make your repayments. However, many lenders now offer personalised interest rates based on your financial history and credit score. If you have bad credit, you may be offered a higher rate than someone with good credit.

You can also compare car loans for people with bad credit, though you may not be eligible if your primary source of income comes from your pension or Centrelink.

How to apply for a pensioner car loan

It’s important to make sure you fully understand all the terms, conditions and obligations before signing up for a loan.

You can compare car loans in the table below and select different loan amounts and repayment periods to see how much you’ll be paying back each month. This can help you work out whether you’re going to be able to keep up with repayments and whether your application might be accepted by different providers. It can also help you put the interest rates in more concrete terms and work out how much you’ll be repaying per month.

Once you've found a loan that is right for you, you can apply by clicking "Go to site" and following the instructions. You will generally need to provide personal and financial information as part of your initial application, as well as proof of your pension and other income, assets or liabilities.

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1 - 9 of 9
Name Interest Rate (p.a.) Comp. Rate (p.a.) Application Fee Monthly Fee Monthly Repayment
loans.com.au - New - Variable Rate Special
Variable3 - 7 Years $5,000 - $150,000
Interest Rate (p.a.)
6.24%
to 7.74%
Comp. Rate (p.a.)
7.36%
to 8.85%
Application Fee
$400
Monthly Fee
$8
Monthly Repayment
$630.83
Go to siteMore Info
OurMoneyMarket New Car Loan
Fixed1 - 7 Years $2,001 - $75,000
Interest Rate (p.a.)
6.57%
to 18.99%
Comp. Rate (p.a.)
7.19%
to 21.78%
Application Fee
$250
min.
Monthly Fee
$0
Monthly Repayment
$622.82
Go to siteMore Info
Stratton Finance New Car Loan
Fixed1 - 7 Years $10,000 - $300,000
Interest Rate (p.a.)
6.52%
to 18%
Comp. Rate (p.a.)
6.95%
to 23%
Application Fee
$395
Monthly Fee
$0
Monthly Repayment
$625.27
Go to siteMore Info
You'll receive a fixed rate from 6.52% p.a. depending on the lender you are approved with.
Apply for up to $300,000 and use cash or trade in a vehicle to use as a deposit. Optional balloon payment available.
Verified Lending Used Car Loan
Fixed1 - 7 Years $10,000 - $200,000
Interest Rate (p.a.)
7.1%
to 18.99%
Comp. Rate (p.a.)
8.06%
to 22.99%
Application Fee
$395
Monthly Fee
$0
Monthly Repayment
$630.67
Go to siteMore Info
NRMA New Car Loan
Fixed1 - 7 Years $5,000 - $130,000
Interest Rate (p.a.)
7.29%
to 16.99%
Comp. Rate (p.a.)
8%
to 17.77%
Application Fee
$499
Monthly Fee
$0
Monthly Repayment
$635.67
Go to siteMore Info
Note: Take out a loan for an eligible electric vehicle and receive a 1.5% discount on your personalised interest rate (interest rates start from 5.79% p.a. and comparison rates from 6.49% p.a.)
OurMoneyMarket Used Car Loan - No Vehicle Age Limit
Fixed1 - 7 Years $2,001 - $75,000
Interest Rate (p.a.)
6.57%
to 18.99%
Comp. Rate (p.a.)
7.19%
to 21.78%
Application Fee
$250
min.
Monthly Fee
$0
Monthly Repayment
$622.82
Go to siteMore Info
NRMA Used Car Loan
Fixed1 - 7 Years $5,000 - $130,000
Interest Rate (p.a.)
8.49%
to 16.99%
Comp. Rate (p.a.)
9.21%
to 17.77%
Application Fee
$499
Monthly Fee
$0
Monthly Repayment
$647.01
Go to siteMore Info
You'll receive a fixed rate from 8.49% p.a.
Finance a used car with NRMA and benefit from a fixed rate term and no monthly fees. Pre-approval available within 5 business hours.
Stratton Finance Used Car Loan
Fixed1 - 7 Years $10,000 - $300,000
Interest Rate (p.a.)
6.52%
to 18%
Comp. Rate (p.a.)
6.95%
to 23%
Application Fee
$395
Monthly Fee
$0
Monthly Repayment
$625.27
Go to siteMore Info
You'll receive a fixed rate loan from 6.52% p.a. with a comparison rate of 6.95% p.a.
A used car loan of up to $300,000 with quick approval times and balloon payment options.
loans.com.au - Variable Rate Used Car < 5 years
Variable3 - 7 Years $5,000 - $150,000
Interest Rate (p.a.)
7.74%
to 7.74%
Comp. Rate (p.a.)
8.85%
to 8.99%
Application Fee
$400
Monthly Fee
$8
Monthly Repayment
$644.82
Go to siteMore Info
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2 Responses

    Default Gravatar
    ChristinaAugust 11, 2018

    Retired with age pension and small pension from working in UK. Have very good credit rating. Require car loan, not necessarily new car but has to be from reliable seller. Have house here owned and valued $680-$690.000. What is the best way to go about this please.

      AvatarFinder
      JohnAugust 11, 2018Finder

      Hi Christina,

      Thank you for leaving a question.

      The best course of action would be to get a pre-approved car loan so you have an estimated budget for the car you want to purchase. Once you are approved for the loan then you can visit any of the local car dealerships that can give you a good offer based on the amount you got approved for. As an addition, you may also visit a quick checklist of what you need to look at when buying a used car from our used car guide.

      Hope this helps!

      Cheers,
      Reggie

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