For many students, owning a car is essential for balancing studies, work and social life – but how easy is it to buy one when you’re still studying? If your savings won't cover it, a car loan could be the solution. While there aren’t loans specifically for students, you could be approved for a standard car loan, provided you meet the lender's criteria. This may be more challenging as a student, but by comparing your options with Savvy you can find a car loan that suits your budget and needs.
Why apply for a car loan with Savvy?
How do I qualify for a student car loan?
To qualify for a car loan as a student, you’ll need to meet the same basic criteria as any other borrower. However, this can be more difficult if you’re not working regularly or have little credit history, so lenders may have stricter lending criteria. Here's what they'll check:
- Age: you must be at least 18 years old to take out any loan product in Australia, whether you are a student or in full-time work.
- Residency: to qualify for a student car loan, you must meet lenders’ residential requirements. Most lenders require applicants to be permanent residents or citizens of Australia, though some temporary visas may be accepted by certain lenders.
- Income: lenders have income requirements for all applicants – and this might be the most challenging requirement for students to fulfil. However, in many cases the threshold is not high and there are loans available even for low-income earners. As such, you could get approved as a casual or part-time worker, especially if your earnings are regular and consistent – but keep in mind that lenders do not accept payments such as Austudy and Youth Allowance as income.
- Credit score: lenders will check your credit score to assess your creditworthiness. A higher score can boost your chances of approval and potentially qualify you for lower interest rates. However, as a student, you may have a limited or non-existent credit history, which can make it harder to qualify or mean you face higher rates – though some lenders specialise in working with borrowers with poor credit.
Can I get a car loan on a student visa?
Some car loan lenders will accept certain temporary visas but if you are an international student on a study visa such as the 500 Student or 407 Training visa, your options will be very limited. This is largely due to the limited length of your stay in Australia and the perceived risk for lenders.
However, not all lenders take the same approach. Some are more flexible with other visa types or assess applications on a case-by-case basis, depending on factors like your income, visa length and credit history.
If you’re unsure whether you’re eligible, Savvy can help. As a car finance broker, we compare a range of lenders and check if any offer car loans to people on your specific visa – saving you time and helping you avoid multiple rejections.
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What car can I buy with a student car loan?
You can buy almost any car with a student car loan, as long as it fits within your budget and meets the lender’s requirements. However, it’s important to be aware that many lenders place restrictions on the cars they’re willing to finance. Typically, they’ll only approve vehicles that are less than ten years old and have relatively low mileage. This helps protect the car’s value, as it acts as security for the loan.
While this might rule out some of the cheapest older cars, many lenders are willing to finance vehicles priced from around $5,000, meaning you can still find an affordable option that suits your needs. Here are some tips to help you choose the right one:
- Buy a smaller car: you might like the idea of a big SUV, but smaller models can be significantly cheaper to buy and run than their larger cousins.
- Choose a used vehicle: used cars offer good value and reliability at a lower cost compared to new cars, though it’s important to inspect its condition prior to purchase.
- Use a private seller: if you are comfortable buying from a private seller, you can often get a better deal on your set of wheels than buying from a dealership – but it’s important to do your due diligence before handing over the cash.
How much will my car loan cost?
The cost of your car loan as a student depends on several factors — including how much you borrow, the loan term, your interest rate and any fees. Students are often seen as higher-risk borrowers due to lower incomes, limited credit histories and shorter work experience. Because of this, you may face higher interest rates than other borrowers and may be offered a smaller loan amount.
While exact costs will vary based on your situation, here’s a basic example of how your car loan repayments could look:
| Loan amount | Interest rate | Loan term | Estimated monthly repayments | Total amount (including interest) |
|---|---|---|---|---|
| $10,000 | 10% | 5 years | $212 | $12,748 |
| $15,000 | 10% | 5 years | $319 | $19,122 |
| $20,000 | 10% | 5 years | $425 | $25,496 |
Estimated costs calculated using Savvy’s car loan calculator. Note that fees and other charges are not included in these figures.
What other costs do I need to consider when buying a car?
Whether you’re buying a new or used car, there are a number of costs to consider beyond the purchase price. Here’s what else you need to budget for:
- Stamp duty: car stamp duty – otherwise known as motor vehicle duty or registration duty – is a tax imposed by state and territory governments on vehicle purchases. It’s a one-time payment made when you buy any car, new or used, though how much it will cost depends on how much you paid for the car and which state or territory you are living in.
- Registration: car registration (“rego”) identifies your vehicle and shows that you are the owner of the car. All cars in Australia need to be registered before they can legally be driven or parked on public roads.
- CTP insurance: Compulsory Third Party (CTP) insurance is a legal requirement for all vehicles and provides coverage if you are in a car accident that causes personal injury. Some states automatically include CTP insurance in your vehicle registration costs while others require you to purchase it separately.
- Car insurance: on top of mandatory CTP insurance, there is optional car insurance available for additional protection. Be aware that if you take out a car loan, you will likely be required to take out comprehensive car insurance.
- Fuel: fuel is a large part of your car running costs, though how much you’ll spend on petrol depends on factors such as your driving habits, your car's fuel efficiency and fuel prices.
- Servicing: it’s important to keep your car in good working condition. As a general rule, cars should be serviced by a mechanic every 6 months or 10,000 kilometres, whichever is sooner. You should also put money aside for any unexpected repairs.
Steps to get a car loan as a student
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Find out how much you can afford
You can use our car loan repayment calculator to find what will your repayments be. Figuring out how much you can afford easily can save you a lot of trouble in the future. Keep in mind that you are likely to pay more as a student as the lowest interest rates are reserved for those with the best credit scores.
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Compare finance
Loans are available from a variety of providers such as banks, credit unions, car dealerships and online lenders. Each will have its own lending criteria, so it’s important to compare the rates and repayments between them to find the best deal for you. It can be intimidating to do this on your own, especially if you’ve never bought a car before. If you need help, our friendly team at Savvy can help guide you through the process.
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Apply for your loan
Once you've matched with a lender, you will need to provide supporting documents for your application such as proof of income, proof of address and identification. Your lender will review these to verify your financial situation and assess your eligibility for the loan before making a decision. If approved, they will provide you with the loan terms. Be sure to read these carefully before accepting the offer to ensure it aligns with your financial needs and capabilities.
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Pick up your car
Once you have been approved, you can buy your car. Complete all necessary paperwork with the seller and ensure the loan funds and registration are transferred appropriately. Once everything is in order, you can pick up your car and drive away!
Do I have any driving restrictions as a young driver?
If you’re a student with a full driver’s licence, there are no special restrictions that apply to you based on your student status. However, if you're a younger student or a new driver on a learner or provisional licence, you’ll need to follow the rules that apply to your licence type.
Some common restrictions across Australia include:
- Zero alcohol tolerance: you must have no alcohol in your system while driving.
- Licence plate display: L-plates or P-plates must be clearly visible on your car if required by your licence type.
- Mobile phone use: you must not use a mobile phone while driving. In some states, limited hands-free use may be allowed for P2 drivers.
Rules also vary by state and territory. Find out all about the restrictions where you live below.
Australian Capital Territory
L-platers
- Speed limit: up to the posted speed limit
- Towing: no trailer towing permitted beyond a Gross Vehicle Mass (GVM) of 750kg
- Mobile phone usage: no usage permitted
- Restricted vehicles: no vehicle restrictions
P-platers
- Speed limit: up to the posted speed limit
- Passenger limit: while on P1 licence, no more than one passenger between 11:00pm and 5:00am from 16 to 22 years old (unless for employment or education purposes, with family members not included)
- Towing: no trailer towing permitted beyond a Gross Vehicle Mass (GVM) of 750kg
- Mobile phone usage: no usage permitted
- Restricted vehicles: no vehicle restrictions
New South Wales
L-platers
- Speed limit: up to 90km/h
- Towing: no towing permitted
- Mobile phone usage: no usage permitted
- Restricted vehicles: no vehicle restrictions
P-platers
- Speed limit: up to 90km/h (P1) or 100km/h (P2)
- Passenger limit: while on P1 licence and under 25, no more than one passenger between 11:00pm and 5:00am under 21 years old (unless for employment or education purposes)
- Towing: no towing permitted beyond a GVM of 250kg (P1)
- Mobile phone usage: no usage permitted
- Restricted vehicles: no vehicles with power to tare mass ratios of over 130kW per tonne, a modified engine requiring engineer approval or other high-performance vehicles listed in the restricted vehicle database
Northern Territory
L-platers
- Speed limit: up to 80km/h
- Towing: permitted
- Mobile phone usage: no usage permitted
- Restricted vehicles: vehicles with a visual display unit (VDU) or television visible to you or other drivers on the road
P-platers
- Speed limit: up to 100km/h
- Passenger limit: no passenger limit
- Towing: permitted
- Mobile phone usage: no usage permitted
- Restricted vehicles: vehicles with a visual display unit (VDU) or television visible to you or other drivers on the road
Queensland
L-platers
- Speed limit: up to the posted speed limit
- Towing: permitted
- Mobile phone usage: no usage permitted
- Restricted vehicles: no vehicle restrictions
P-platers
- Speed limit: up to the posted speed limit
- Passenger limit: while on P1 licence and under 25, no more than one passenger between 11:00pm and 5:00am under 21 years old (excluding immediate family members)
- Towing: permitted
- Mobile phone usage: hands-free functions, wireless headsets and mobile handsets on loudspeaker are permitted for P2 licence holders and P1 licence holders aged 25 or over
- Restricted vehicles: vehicles deemed high-powered by the Queensland Government
South Australia
L-platers
- Speed limit: up to 100km/h
- Towing: trailers, caravans, boats and horse floats can be towed
- Mobile phone usage: no usage permitted
- Restricted vehicles: no vehicle restrictions
P-platers
- Speed limit: up to 100km/h
- Passenger limit: while on P1 licence and under 25, no more than one passenger between 16 and 20 years old (excluding immediate family members and unless a qualified supervising driver is next to you)
- Towing: trailers, caravans, boats and horse floats can be towed
- Mobile phone usage: making or receiving a phone call is permitted for P2 licence holders only, provided the phone is secured in a mounting device, accessed remotely (such as via Bluetooth) or with a wired or wireless headset
- Restricted time: while on P1 licence and under 25, you mustn’t drive between the hours of 12:00am and 5:00am
- Restricted vehicles: vehicles deemed high-powered by the South Australian Government (drivers under 25 years of age only)
Tasmania
L-platers
- Speed limit: up to 90km/h
- Towing: no towing permitted
- Mobile phone usage: no usage permitted
- Restricted vehicles: no vehicle restrictions
P-platers
- Speed limit: up to 100km/h (P1) or the posted speed limit (P2)
- Passenger limit: while on P1 licence and under 25, no more than one passenger between 16 and 21 years old (excluding immediate family and a spouse or partner you live with and other exemptions)
- Towing: permitted
- Mobile phone usage: hands-free or speaker mode (P2 only)
- Restricted vehicles: no vehicle restrictions
Victoria
L-platers
- Speed limit: up to 90km/h
- Towing: no towing permitted
- Mobile phone usage: phones or tablets in an appropriate mounted device can be used for navigation and audio (provided it’s set up beforehand), as well as play audio via a wearable device such as a smartwatch or smartglasses
- Restricted vehicles: no vehicle restrictions
P-platers
- Speed limit: up to 100km/h (P1) or the posted speed limit (P2)
- Passenger limit: while on P1 licence, no more than one passenger between 16 and 22 years old (excluding spouses, domestic partners, siblings and step-siblings and other exemptions)
- Towing: towing not permitted for P1 licence holders unless you’re with a fully licensed driver or your towing is for employment or for agricultural purposes
- Mobile phone usage: phones or tablets in an appropriate mounted device can be used for navigation and audio (provided it’s set up beforehand), as well as play audio via a wearable device such as a smartwatch or smartglasses
- Restricted vehicles: no vehicles with power to tare mass ratios of over 130kW per tonne, a modified engine to increase performance or another probationary prohibited vehicle listed in the probationary vehicles database
Western Australia
L-platers
- Speed limit: up to 100km/h
- Towing: permitted
- Mobile phone usage: calls can be made or answered if your phone is mounted or can be used without touching it
- Restricted vehicles: no vehicle restrictions
P-platers
- Speed limit: up to the posted speed limit
- Passenger limit: no passenger limit
- Towing: permitted
- Mobile phone usage: calls can be made or answered if your phone is mounted or can be used without touching it
- Restricted time: you mustn’t drive between the hours of 12:00am and 5:00am during the first six months of holding your provisional licence (travelling to and from school or to, from and for your employment by the shortest practicable route is permitted)
- Restricted vehicles: no vehicle restrictions
Tips for getting a student car loan
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Put down a deposit for the car
Paying for part of the car up front will give you a better chance to get a car loan. It proves to the lender that you are good at managing your funds and also lowers your repayments.
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Consider a guarantor
Adding a guarantor or a co-applicant with a stable income to your loan, such as a parent, reduces the lender's risk and can improve your chances of getting approved for a car loan.
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Keep your income stable
Lenders prefer a stable income than variable income. This means a regular part-time job might benefit you more than a casual job with unstable working hours and income.
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Build credit
A strong credit history can improve your chances of getting a car loan. Focus on making payments on time, using credit responsibly and avoiding applying for multiple credit accounts, as well as regularly monitoring your credit report for errors.
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Buy a cheaper car
Opting for a less expensive car can make it easier to secure a loan. A lower-priced vehicle reduces the amount you need to borrow and can fit better within your budget, making the loan repayments more manageable.
