Applying for a Car Loan While Unemployed
When someone is unemployed, having a car can be a great asset as they can drive to interviews and travel further to find work.
A car loan is a great way to make that happen. However, some people still think car loans are impossible for unemployed people. It’s not true.
Just as there are ways for students to get car loans, there are lots of ways unemployed people get car loans too.
What’s needed?
You’ll need to prove you have some form of income with a surplus to pay back a car loan.
Just because you don’t have your regular PAYG income coming in, doesn’t mean you don’t have some forms of viable income.
Freelance work
If you are doing freelance work or working from home, this counts as income. Make sure that you keep a record of any income through your bank statements. Often, you’ll need an ABN as well.
Online commerce
Some people derive income from selling items online. This is acceptable income for a car loan IF under an ABN.
It can include sales from eBay, GumTree and Facebook Marketplace for example.
Rental income
Some people have rental income, for example, a room available for rent on AirBNB. Any income source that is regular can be counted towards your ability to pay a loan.
Note that it will need to be provable.
Centrelink support
Some forms of Centrelink can be used as income to pay off a car loan.
Generally, these Centrelink payments can be accepted by lenders:
- Age Pension
- Carer’s Allowance
- Disability Pension
- Child Support Payments
- Family Tax Benefits or Parenting Payments
- Veteran’s Pension
Other ways unemployed people get car loans
Taking out a loan with someone who has a steady employment income is another option. You will most likely be approved for a car loan while unemployed if you do this.
This is called a co-borrower. Their name appears on the loan documents and they are responsible for repaying the loan in the event you can’t, which reduces the risk for a lender and increases the chances of approval.
What if I’m about to start a new job – can I get a car loan?
Some lenders may consider you for a loan if you are about to start a new job. Make sure your employment contract and start date is already arranged.
Increase approval chances if
- Your new job is in the same industry and a similar role to your previous position
- Less than a month between jobs
- You’ve passed probation and/or 3 months into the new job
Casual or contract work and getting a car loan
If you are in between roles and have a strong history of continuous employment, it’s a lot more likely that you’ll be approved for a loan.
Getting a loan in these work situations is definitely possible. Make your application stronger by supplying:
- Previous years tax returns showing your annual income
- Letter from your employer confirming their intentions regarding your employment
- Stable residential and loan repayment history
- Personal references with authority to speak about your past employment
More help
There’s a reason why so many people opt to use a broker.
- Minimise impacts to a credit file
- Expert advice
- Access to large number of specialist lenders
- Simplified finance
Put simply, a broker is able to match your circumstances to lenders and loan products form a huge range and avoid putting any enquiries on your credit file until you’re ready.
Multiple credit enquires can reduce a credit score, further reducing chances of approval. A broker can solve this problem.
Brokers can pre-assess your circumstances to ensure you don’t apply for any loan products you might not meet the criteria for.
Car loans for unemployed people overall
If you can show that you can afford to make car loan repayments while you are unemployed, you can start your car loan application right away.
The majority of people who are unemployed can qualify for a loan product, it’s just a matter of finding the right match.
A broker can often do this.

Comments
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Anne-Maree Fay Sayer
Hi im enquiring to see if im eligible for a car loan. i am unemployed but receive family tax, pension and child support. I currently have bad credit from a bill i am currently paying off.
Kind Regards Anne-Maree Sayer
Nazarene Presley
I need car to visit sick family and to go funeral and need to take my kids to school