How Do You Get Bad Credit Car Loans With No Deposit?

By Angela Monroe - May 5, 2022

Bad Credit Car Loans With No Deposit

We all know that deposits help, but can you get a bad credit car loan with no deposit? 

Short answer: Yes, you can.

Long answer: See below!

There are a few things that you can do to get a bad credit car loan with no deposit and, fortunately, they aren’t too difficult.

Get your ducks in a row

Honesty is the best policy

When speaking to your broker, you need to offer them the most accurate, up to date and honest details about your current circumstances.

Hiding anything at early stages in the process will make things far more complicated and could even ruin your chances of getting a loan approved.

Make sure your bank statements are in tip top shape

We know it’s easier said than done but if you’re hoping to get a bad credit car loan with no deposit, you’ll need to have your bank statements in good order to show to a potential lender.

Take the following steps

  • Avoid too many large cash withdrawals
  • Cut down on frequent gambling
  • Avoid frivolous spending
  • Try to save a little each pay cycle
  • Don’t let your account go into the negatives
  • Cut down in unnecessary expenses like streaming subscriptions and gym memberships

Aim for three months of polished bank statements and time your application for the loan accordingly.

Car Loan Mistake_ Refinancing

Show evidence of stability

It can be tough to get approval for bad credit car loans with no deposit if you are also unable to show any evidence of your employment history.

Note that some, but not all forms of Centrelink payments can be used for car loans.

If you are employed, having a good track record and regular pay slips to show to a potential lender will be a great advantage.

Similarly, evidence that you are living in one place on a permanent basis and regularly paying rent or mortgage will help in your credit application.

Can you borrow more than 100% of the car cost?

Good question, and one that’s difficult to answer. Some people require a loan for multiple things – eg. a car and furniture, or perhaps they are buying a vehicle in need of repairs and want extra funds to cover those too.

This may be possible in some cases, but it depends very much on the individual circumstances.

It also depends on the lender, so speaking to a professional at Loans For People With Bad Credit can really help get you the right answers.

There are a number of different loan options which may be suitable for you. It’s also really important to consider that you may need up to 125 per cent of the car cost as you’ll have added extras to pay such as:

  • Insurance
  • Registration
  • Fuel
  • Extending warranties

Traps to avoid when getting a bad credit car loan with no deposit

You may feel really lucky to be getting a car loan despite having bad credit and no deposit. 

However, it’s still important to be wary of traps you can fall into and to be aware of potentially expensive pitfalls.

Maximum interest

Expect to pay no more than 29.9 % interest – this is already a very high rate, and you should not agree to pay anything above it.

Avoid no credit check loans

Despite what you might think, this is not a good sign. Car loan applications with reputable companies should feature a credit check so do not trust a lender who offers a no credit check loan.

Watch out for ‘introductory rates’

Some companies offer an introductory rate which is low and therefore seems very appealing when getting a bad credit car loan with no deposit. However, once the ‘introductory’ period is over, the rates will increase dramatically.

Having an idea of the rate throughout the lifetime of the loan will help you to budget properly and avoid the risk of missing payments or defaulting on your loan.

A bad credit car loan with no deposit in summary

As you can see, it’s certainly possible to get a bad credit car loan with no deposit. This is great news for those who want to get back on the road despite having bad credit.

Be cautious, do your research and always speak with a reputable expert with experience in this type of loan before agreeing to anything.

For more advice about bad credit car loans with no deposit, talk to the experts at Loans For People With Bad Credit on 1300 769 384.

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.


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