Car Loans For Single Parents

Savvy helps you get your car loan approved as a single parent in no time.

No obligation. It won't affect your credit score.

Last updated on April 19th, 2022 at 03:33 pm by Thomas Perrotta

Car loans for single parents

Owning a car as a single parent is a non-negotiable, taking your children to and from school, sport and other events, so Savvy is here to help you get approved for a loan to buy your next car. We’ll help you find great deals for all different types of cars that are tailor-made to fit your financial needs. 

Completing a quick quote today will get your application moving immediately and enable us to get to work comparing from a wide range of lenders Australia-wide. Take your first step in the car buying process with Savvy now.

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Buying a car as a single parent: what you’ll need to know

Borrow from $5,000

As a single parent, you can borrow from as little as $5,000 up to the maximum amount you can afford to repay comfortably in instalments.

Fixed interest rates

Locking in a competitive interest rate from one of our lenders ensures that budgeting into the future for your family is more accurate.

Flexible loan terms

We can arrange flexible terms for single parents of between one and seven years, with a repayment schedule of your choice of either monthly, fortnightly or weekly payments.

Add free additional payments and save

If you paid just an extra $20 on each monthly instalment of your $20,000, five-year loan at 7.5%, for example, you could save over $200 and trim your loan term by three months.

Centrelink income is accepted

We partner with flexible lenders who can arrange financing for single parents who receive income through Centrelink.

Speedy online approvals

If you need your car quickly to drive your kids around, Savvy can help you have your application settled in as little as 48 hours.

Bad credit is accepted

Even if your credit score doesn’t meet conventional lending criteria, we can help you access finance with one of our flexible lenders.

Low fees

Watch for ongoing fees ($0 to $20), an application fee ($0 to $600) and early repayment fee ($0 to $600-$900) on your car loan, while late payments will cost you between $25 and $50.

Here’s why Australians choose Savvy for car finance

Checklist before you apply for your car loan

Single parents car loan explained further

How can I qualify for a car loan as a single parent?

To qualify for car finance as a single parent, you’ll need to provide proof of income, to demonstrate your ability to meet your repayment obligations. Our lenders will require a minimum total income of at least $30,000 annually. Of course, you’ll also need to be an Australian citizen, permanent resident or valid visa holder and over the age of 18.

The good news is that we partner with lenders who accept proof of income from multiple sources – so if you’re receiving any Centrelink benefits, these will count in addition to any income that you receive from your job, if you’re also able to work. They’ll accept child support payments, family tax benefits A and B and the single parent allowance, as well as any income from a full-time, part-time or casual job, in determining the affordability of your loan. Our flexible lenders can finance borrowers receiving up to 100% of their income through government payments, although you must show that the loan’s repayments are affordable for you to be given the green light.

Your Savvy consultant will only select car loan options which come with requirements that you’re able to fit – because too many rejected applications will have a negative effect on your credit rating, your broker will ensure you fit within the minimum income requirements, as well as any other criteria set out by the lender. They’ll be able to recommend the best deals in the market for your individual circumstances

How should I compare between different car loan options?

When assessing the available car loan options for you, the factors that you should always weigh up are the interest rate, duration and fees associated with each loan. Each of these has a significant bearing on the cost of your car loan, so it’s important to understand how each of these will affect the cost of your loan and try to aim for one which saves you the most money. For example, a loan that offers a low interest rate, but a longer duration, may in fact end up costing you more in interest overall because you’ll be paying interest for longer.

Say you’re taking out a $30,000 loan and have a choice between a 5-year loan at 7% interest, or 7 years at 6%. The 7% rate will have you repaying $594 a month, and $5,642 in interest over the life of the loan. The 6% rate will come with lower repayments, at $438 a month, but you’ll end up paying a total of $6,813 in interest – over $1 ,000 more for a lower interest rate.

Similarly, we’ll help you watch out for loans advertising low interest rates but charging high fees throughout the loan period. This is where the comparison rate will come in handy, which is a figure combining the interest and main fees on the loan to give a truer indication of how much your loan will cost.

There are several other aspects of the loan you should look to compare. Whether the selected few come with free additional repayments is an important factor to consider, as this can help you save a meaningful amount over the life of your loan.

Common car loan queries from single parents answered

Can I apply for a car loan if I receive income from a side business?

Yes – if you can supply the last two years’ worth of tax returns, you can still apply for a standard car loan as a self-employed single parent through your side business, as well as with Centrelink income. However, many may find themselves in a position where they’re unable to produce this, particularly if they’ve been running their operation for less than two years. For parents in these positions, you can apply for a low doc car loan, which will require you to produce documents such as BAS documents, bank and profit and loss statements, your ABN and an income declaration.

Am I able to apply for a car loan as a single parent on JobSeeker?

Yes – but only alongside your existing family payments. JobSeeker isn’t considered a stable stream of income by lenders on its own, as you can easily become ineligible for further payments should you find employment. Similarly, Youth Allowance, Austudy and Abstudy aren’t accepted forms of income.

How can I reduce my monthly repayments as a single parent?

There are several ways you can look to reduce the cost of your repayments. Firstly, cutting down on interest and fees will go a long way towards this, as mentioned above. Additionally, paying a deposit will cut down on your amount owing and reduce your instalments further. Finally, electing to repay your loan over a longer term will cut down on your monthly financial commitment, but will increase its overall cost.

Are car loans still available to casual-working single parents?

Yes – we can arrange financing for casual workers, provided you’re earning a relatively stable income and meet our lenders’ minimum requirements relating to annual earnings.

Am I eligible for a car loan if I've just started a new job?

Yes – if you’re moving from full-time employment to another full-time job, we partner with lenders who can approve applications as soon as you start at your new workplace. Part-time employees will need to have been in the same job for at least three months, while casual workers will require a minimum of six months of consistent income from the same job. All of this is related to job stability and the potential for your income stream to dry up: if you’ve completed your probationary period, or have stayed in the position for a sustained period, it’s less likely that this will happen as a general rule.

What can I do to improve my credit score?

There are a few things single parents can do to increase their credit scores. Firstly, paying your bills on time is one easy way for you to do so, as this’ll show up as a positive mark on your file each time you do so. Similarly, paying off any existing debts promptly and to schedule (or in full) will go a long way towards increasing your rating, while lowering credit card limits or getting rid of those which you don’t need are also effective.

Can I use my car loan funds for any other household expenses?

No – your car loan can only be used to cover the cost of your car and any on-road expenses such as stamp duty, rego, car insurance and extended warranties. If you want to use loan funds to cover other expenses in your life in addition to the car, you can take out a secured personal loan (with your car acting as security if acceptable) or unsecured personal loan to consolidate debts, fund renovations or pay for any other personal costs.