First Time Car Loan

Get behind the wheel of your first-time ride cheaper by sourcing the best car loans to suit your needs.

No obligation. It won't affect your credit score.
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, updated on July 5th, 2023       

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First time car loan

So you’re looking to get a car loan for the first time, and you want to get it right? Savvy can help. Our team of brokers have years of finance experience, and we’re willing and able to help you find the best loan for your situation – and answer any questions you have along the way. Savvy has access to over 25 of Australia’s top lenders, which means we can help you choose from the cream of the crop for your first car loan.

Contact us today for a free, no obligation quote, and take the headache out of getting car finance for a first time.

Car Loans - Compare Car Loan Interest Rates, Offers & Apply Online

Features of a first time car loan with Savvy

Borrow what you need

With a loan through one of Savvy's wide range of lenders you can borrow the full value of the car you're purchasing, or as little as $5000 to supplement your own savings.

Great rates

Loans through Savvy can offer very competitive interest rates, with a wide range of offers to choose from available through our panel of trusted Australian lenders.

Flexible terms & repayments

With a loan through a Savvy, you can choose how fast you want to repay the loan – from 1 to 7 years. You can also opt for weekly, fortnightly, or monthly repayments.

New or used

Savvy gives you the flexibility to buy the car that suits you. You can buy new or used, or even go for a little of both by buying an ex-demonstration model.

Secured finance

A Savvy car loan is secured – it uses the car itself as collateral on the loan. What that means is less risk for the lender, and lower interest rates for you.

Fixed payments

A car loan from one of Savvy's suite of lenders is Fixed interest. That means the cost of your repayments is locked in and doesn't change – making budgeting easier.

Choice of vendor

With a loan through Savvy, you have the freedom to buy from a dealership or from a private seller – we can provide finance for every situation!

Affordable fees

A car loan through one of Savvy's lenders has very affordable fees – generally around $100-$600 for setup, and only $5-$20 per month. Some lenders even offer no fees at all.

Why choose Savvy when getting a car loan for the first time?

How to get a car loan for your first car?

Every driver has to start somewhere, so borrowing money for your first car doesn’t need to be an ordeal. The good news is that while there can be fewer options and lenders when you’re looking for a first-time car loan, you can still find a great deal when you know where to look. Find out what you need to consider when you buy a first car, the way vehicle loans work, and how you can save time and get on the road faster here.

How does a car loan work and how do I apply for the first time?

Car loans are available to first-time vehicle buyers who want to borrow enough money to purchase their car and repay the amount over time. You can take between one and seven years to do this, with many borrowers falling at around a five-year car loan schedule.

You can borrow up to the full purchase price of the vehicle or use a deposit. Interest rates can be variable or fixed, and some car loans get secured against your car, while others are unsecured. Savvy partners with lenders who offer car loans for sums as high as $120,000, but you can also access as little as $5,000.

The first-time car loan fees

Every lender charges fees for their services, but they can vary significantly. There are two primary types: setup and account fees. Setup fees range between $100 and $700, and you repay them in instalments during the term. Account fees are typically charged each month and can be anything from just $10 to $40 or more. First-time credit users may face higher fees from some lenders, so it’s important to compare as many options as you can.

The car loan interest rate

The interest rate is the other primary contributor to the overall cost of a first-time car loan, as borrowers with less credit history will pay higher interest than more experienced applicants. Each time you make a repayment, you pay part of the original amount you borrowed (known as the loan principal) and some interest. Similarly, interest rates are likely to be significantly affected by a lack of credit history, so it’s again important to assess your options carefully.

Your documents and the car loan application process

The car loan application process is pretty quick and convenient, and borrowers can complete the process online from a smartphone or computer. Lenders carry out checks to make sure you can afford to repay your loan without hardship. the lender may need to speak with your employer if you’re a new borrower. When you enquire with Savvy, we’ll give you a personal car loan consultant who’ll help you fill out an online application form and assemble some basic documents to back that up. You can then upload everything you need via our application portal, including:

  • A driver’s licence and/or passport
  • Recent utility/phone bill
  • Current borrowing records
  • Credit card statements
  • Medicare card or citizenship document
  • Most recent three months’ worth of payslips
  • Bank statements

Submission and settlement

Once you’ve uploaded your documents and filled out the form, your Savvy consultant will make sure everything is in order and the lender will assess your application. Once it’s approved, we’ll send a contract containing all the car loan details and your repayment responsibilities. You should read that carefully and, once you’re happy, you can sign it digitally and return it. Car loan lenders settle most vehicle finance by paying the dealership or vendor directly, which happens via electronic funds transfer, so it’s fast and efficient.

What are my first time car loan options?

First-time borrowers have a couple of different loan options when they buy a car. Firstly, you can opt to apply for finance yourself and secondly, you can use a guarantor if you have access to one.

Variable versus fixed rate first-time car loans

Car loans come with two different types of interest rate. Fixed rate car loan repayments are a better fit for the vast majority of first-time vehicle buyers. That’s because they’re easier to account and plan for given that your car loan repayment amount will never change, no matter how long your loan term runs. Variable rate car loan repayments can rise and fall according to many factors beyond your control, such as the national cash rate and the broader Australian economy, which is harder to plan for, but you’ll benefit if interest rates fall. First-time car buyers often favour the certainty of consistent repayments over the possibility of interest rate savings.

Secured versus unsecured car loans

You can apply for either a secured or unsecured car loan. Secured car loans are the best bet for first-time borrowers because lenders are taking far fewer risks when approving your finance. That’s because they use your vehicle as security against your borrowing. It means they can charge a lower interest rate and you’re more likely to qualify for larger amounts. Unsecured loans don’t provide the lender with any security beyond your credit history and borrower profile – which is not going to be ideal when you have a lack of both.

Applying for a guarantor loan

A car loan guarantor is someone – typically an immediate family member – who agrees to vouch for your borrowing. That person must have a better credit rating than you and an excellent all-around borrower profile, because the lender will assess that when you apply. The main advantage of using a guarantor to buy your first car is that lenders who’d ordinarily reject your application are far more likely to approve you for vehicle finance. However, it’s crucial to still only borrow what you can afford, because the guarantor will be held responsible for any late or missed repayments.

How do I apply for a first car loan through Savvy?

Frequently asked questions about first time car loans

Does it matter that I've never applied for a loan before?

One big problem with getting a first time loan for a car is that if you have little or no credit record, lenders have no way to know if you're reliable with loan payments – which can make approval harder.

Fortunately, a loan is not the only way to establish a credit score. Getting a personal credit card, using it responsibly, and paying it off reliably is a good way to build up a positive track record with credit before you try applying for a loan.

Is it better to buy my first car from a dealer?

It depends. You're unlikely to find that awesome, once in a lifetime car deal from a car dealer, but you're also less likely to get sold a lemon – car dealerships have lots of regulations ensuring they deal fairly with customers and are required bey law to provide three-month warranties on used cars under a certain milage.

If you've buying from someone you know and trust, then you might get a great deal with a private sale. But if that's not an option then a dealer is generally a safer option.

How do I check my credit rating?

You're entitled to a free copy of your credit record every 3 months. You can apply for that through one of Australia's major credit agencies – most notably Experian, illion, or Equifax.

What extra costs can I expect when buying a car?

There are some extra costs to expect when buying your first car. Stamp duty is collected by the government on car purchases, and can be over 4% of the car's value – although the exact rules vary from state to state. You're often expected to pay for registration (or the portion of it still remaining). You'll need to get full comprehensive insurance, which can be hundreds of dollars a year, and of course there's fuel (often $100-$200 a month) and servicing. Fortunately, you can extend your car loan slightly to cover many of these costs.

What happens if I'm late with a car loan payment?

If you're late with a single car payment it isn't too disastrous – you'll normally just be charged a late fee by the lender (normally around $25-$50). If you do it a lot though, in addition to lots of late fees, you can start to damage your credit rating. And if you go too long without paying there's a risk of the bank repossessing the car (although it's very rare that this actually happens). If you're starting to hit financial problems making repayments, it's best to talk to your lender – they can often help.

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