How to Get a Car Loan After Repossession

By Angela Monroe - October 28, 2020

How to Get a Car Loan After Repossession

Getting finance with negative activity on a credit report is tough. A car loan after repossession is no exception.

Before we get started, when a loan is secured, lenders can repossess assets like cars if borrowers don’t pay. In Australia there are regulations to follow, so no one can simply take your car away without asking. You’ll be notified several times and be given ample time to amend outstanding repayments.

Here’s how to get a car loan after repossession:

Firstly, know your credit history:

know your credit history

Every time you make a loan repayment, miss a loan repayment or apply for credit – even a phone plan, it gets recorded on your credit file. The more recent it is, the more seriously lenders look at it.

Reporting agencies like Equifax are responsible for recording this information. You’re able to see your credit report for free.

Fees occur if reports are needed immediately or multiple times per year. Note that simply viewing your credit report doesn’t affect the information at all.

Get a copy of your credit report so you know exactly how to plan for a new loan.

Tip: Sometimes mistakes can happen. Simply contact the reporting agency and follow their steps if you need to make corrections.

Repair your credit report before applying:

Repair your credit report

Now that you have a copy of your credit report from step one, try to fix any outstanding bills or overdue payments.

For example, if an old power bill is listed as unpaid or another loan is behind on payments. Make sure everything is up to date before applying again as formal applications are recorded on credit reports. These are enquiries.

  • Enquiries are when you formally submit an application for finance. These are listed on credit reports. Each time an enquiry is recorded, your credit score takes a hit. The more frequently you apply, the bigger the hit to your score.

Tip: Give us a call on 1300 907 153. We’ll happily chat with you through your chances of approval.

Co-sign the loan:

Co-sign the loan

This one may be tough but it can really help. A co-signer, or co-borrower, is someone who agrees to pay the loan if you can’t. In the past, these were known as ‘guarantors’. 

The ideal co-signer is someone who has a stable income, assets they own (like property) and a high credit score. A parent co-signing with a student is a common example.

Co-signers can dramatically increase the chances of your loan getting approved and even open doors to lower rates.



Again, these can be a tall order but they do help. Here’s why:

  • Reduce the amount you need to borrow. The deposit will knock down the actual amount you need to borrow which increases your chances of approval.
  • A well-saved deposit shows lending institutions that you know how to manage your money and save well.

Lender choice:

Lender choice

Most people know the big four banks in Australia but there are dozens of lending institutions. Each specialises in specific clients and financial products.

Matching your needs and circumstances to the correct lender is vital in getting approved – especially if you’re going for a car loan after repossession.

Tip: We work with over 25 lenders and can match your circumstances with the right one. 

Car selection:

Car selection

Different cars come with different risks for lending institutions. For example, a high-powered imported car comes with a lot of risks – they’ll have to comply with Australian road laws and borrowers need to have them insured which is more expensive. 

Used cars, depending on the age and model, also come with a higher risk for lending. This is because these cars are more difficult to resell should the borrower not repay the loan.

Cars with high resale values are a good choice for a car loan after repossession. For example, reliable automatic utes and SUVs from trusted brands like Toyota, Ford and Subaru retain their values well. Knowing how to choose the correct car for you and your family is also important.

To summarise:

Car Loan After Repossession Summary

Car repossession is not a pleasant thing to go through but it’s not the end of the road. At Loans For People With Bad Credit, we deal with applicants with negative credit history (aka bad credit) every day. The vast majority get the car and car loan they’re looking for.

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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