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.
1. Check borrowing power, find car. Knowing how much you can borrow first can help your search if you’re not sure what you want to look for. You can apply for pre-approval for a car loan so you know the amount you’re working with.
2. Find a car, find a loan. This will often help you save money overall, because you might end up borrowing less, having lower repayments and finding a more competitive offer.
Whichever option you choose, you will need to understand your eligibility criteria and make sure you have a good credit score.
Car loans will work in the same way regardless of whether you have an employment income, you’re retired or you’re receiving Centrelink payments. The biggest factor is demonstrating that you can keep up with your 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.
You could 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. But there are some great lower-priced new car options too!
Car loans will usually have minimum loan amounts of between $3,000 to $10,000. If you only need a few thousand dollars for a car you’ve got your eye on, you might want to consider a personal loan.
Car loans come with the option of being secured, which will lower rates. However they can also come with restrictions on the type of car you're buying and typically require you to have found the vehicle you want to buy before you apply.
Personal loans don't require you to put anything up as security. You can use the funds for anything you like, so you don't need to provide any vehicle details when you apply - this means you can apply before you look for a car.
Full guide: Should you get a car loan or a personal loan to buy your car?
"For a better chance of approval, and for better interest rates, you could consider a secured car loan. This puts the car as collateral and so reduces the risk to the lender. Bear in mind though that this means that if you can’t afford repayments the lender could repossess your car. "
Some lenders also have specific requirements in addition to this. These are:
| Lender | Eligibility criteria | Review the loan |
|---|---|---|
| AutoCarLoans |
| Review |
| Bank Australia |
| Review |
| BankSA |
| Review |
| bcu |
| Review |
| Beyond Bank |
| Review |
| CommBank |
| Review |
| CUA |
| Review |
| Greater Bank |
| Review |
| Heritage Bank |
| Review |
| IMB |
| Review |
| Latitude |
| Review |
| NAB |
| Review |
| NRMA |
| Review |
| RACQ Bank |
| Review |
| St.George |
| Review |
| Stratton Finance |
| Review |
| Westpac |
| Review |
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.
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.
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.
We currently don't have that product, but here are others to consider:
How we picked theseTo make comparing car loans even easier we came up with the Finder Score. Interest rates, fees and features across 200+ car loan products and 100+ lenders are all weighted and scaled to produce a score out of 10. The higher the score, the more competitive the product.
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If you’re interested in acquiring a car loan, get yourself an online car finance quote. It’s quite easy to get quotes and you can compare quotes from different lenders to ensure that you end up making the right decision.
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.
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