How to Get 100% Car Finance with Bad Credit

By Angela Monroe - January 16, 2018

Who can apply for 100% car finance?

Do you need to buy a car, but you don’t have a deposit to put towards it?

Even if you have a compromised credit report, you can still be eligible for a 100% car finance car loan.

100% car finance for bad credit

If you urgently need a car but don’t have time to save for a deposit, you can apply for a 100% car finance loan.

If you can show that you’ve been meeting all your current payments on time and enough income to make the loan payments, chances are that you will be able to finance the whole purchase price of a car.

Increasing chance of approval for 100% finance

There’s some factors that will increase your chance of approval for 100% car finance with bad credit.

1. Being a property owner

If you own property, this shows that you have the ability to pay a mortgage, and you are ‘asset backed’. This will increase the likelihood of you being approved for a 100% car finance loan.

2. Buying a newer car with low depreciation

When you take out a secured car loan, the bank registers an interest over your car with the Personal Property Security Register (PPSR). If you default on the loan, the lender has the option to sell the car to recover the loan money.

When you buy a newer car, you increase the likelihood of the lender to recover the loan if you fail to pay. This means you’ll be more likely to be approved for the bad credit car loan.

What costs can you include?

Applying for 100% car finance gives you the opportunity to get a head start with your new car by including your car insurance, and registration in your monthly car loan repayment.

What to expect: 100% finance with bad credit

Taking out a car loan while you have bad credit means that you might pay a much higher interest rate than you would with a clean credit car loan.

This is because the lender perceives a risk that you may not repay the loan on time, because you have missed payments in the past.

It’s okay to take out a high interest bad credit loan in the short term. If you make your bad credit car loan payments on time, you can refinance down the track to a better car loan.

Avoid payday lenders

Just because you have bad credit doesn’t mean you can’t still get a reasonable car loan. Taking out a payday loan can help you to buy the car in a hurry, but you will end up paying a lot more money for it.

Take a moment to research other bad credit loan options or to speak to a car loan broker to find a loan that has fair terms. This can save you a lot of money in the long run, and give you a chance to turn your credit rating around.

Get your interest rate down

The interest rates applied to a bad credit car loan reflect the risk the lender is taking to lend you the money. If you are a higher risk, you’ll pay a higher rate.

You can decrease your risk score by:

1. Saving a deposit

This shows that you have income to spare that you can put towards the car loan. It also means you can borrow a smaller amount for the car purchase.

2. No gambling history on your bank statements

Irresponsible or uncontrolled spending can negatively impact your loan application. If you can refrain from these pastimes for twelve weeks before you apply for the loan, you’ll increase your chance of approval.

3. Co-signing with a guarantor

If you have someone, usually a family member, who can vouch for you or sign as a co-borrower to the loan this boosts your applicant profile.

4. Meeting your other credit obligations consistently.

Whether you have a mortgage, another car loan, or a credit card, paying these on time every time shows that you intend to honour any loans you take out in the future.

5. Compare different lenders

Even with bad credit car loans, there’s plenty of competition between lenders who are willing to offer you 100% car finance. Do your research. Or use an expert car loan broker to compare all of your options and secure the best possible deal.

Just because you might have to pay a higher interest rate, it doesn’t mean you shouldn’t still get the best deal possible.

With a bad credit car loan, you can open doors to a new future. If you apply through a car loan broker, you should get your answer fast. Most of the time, within 24 to 48 hours after submission of the completed loan application.

Apply today and give yourself the chance to start afresh. Get in touch with a friendly car loan broker, just complete the form above to get started.

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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