A car is one of the biggest purchases most Australians make, behind a house. It’s also one of the costliest items in a family budget, once you add registration, insurance, fuel and servicing into the mix.
Savvy’s average approved car loan in 2025-26 was $37,346. That’s a heck of a sum to stump up for most Aussie families. For those in that situation, one of the most common answers is a car loan that gets them into their vehicle without any money down. We work with lenders who offer no deposit car finance to eligible borrowers, so the choice is wider than most people expect.
Can I get a car loan with no deposit?
Yes, many lenders offer no deposit car finance. This allows you to borrow 100% of the car’s purchase price, so you pay nothing towards it upfront. The car itself is usually the security for the loan, which means you can often lock in a lower interest rate than you’d otherwise be able to get on an unsecured loan.
Lenders generally look for the following when assessing no deposit car finance:
- Credit history: a good credit score and a record of repaying similar debts on time.
- Serviceability: stable employment and a comfortable, consistent income that covers the repayments.
- Spending habits: regular, non-excessive spending shown on your bank statements.
- Debt to income ratio (DTI): a low DTI, meaning your existing debts are small compared with your income.
Some of the lenders we work with can also cover on-road costs like motor vehicle duty, registration and insurance in the loan. That means, in some cases, you can borrow over 100% of the car’s price.
How much deposit do I need for a car loan?
With many lenders, you don’t need one at all. A deposit often isn’t required to be approved; car loans without deposits are more common than those with deposits among Savvy’s customers.
How much you choose to put down changes your loan to value ratio (LVR), which is the main measure lenders use to judge the risk of the loan.
What is LVR?
LVR is the loan amount as a percentage of the car’s value. The higher the LVR, the more of the car’s value the lender is funding. To work it out, divide the loan by the car’s value and multiply by 100. For a $40,000 car:
- No deposit: a $40,000 loan gives an LVR of 100%.
- $4,000 deposit (10%): a $36,000 loan gives an LVR of 90%.
- $8,000 deposit (20%): a $32,000 loan gives an LVR of 80%.
If on-road costs are added to the loan, the LVR can go above 100%. However, if you decided to go down the route of a deposit, a lower LVR can help in a few key ways:
- Lenders see a smaller loan against the same car as lower risk.
- You may be offered a lower interest rate in exchange for the decreased risk.
- You’ll pay less interest overall. At 7.50% p.a. over five years, a 10% deposit on a $40,000 car saves about $80 a month and over $800 in interest.
- A smaller loan makes it less likely you’ll owe more than the car is worth, which is known as negative equity.
Each lender sets its own maximum LVR, which can vary by the age of the car and whether you buy from a dealer or a private seller.
When might I be required to pay a deposit on my car loan?
Many borrowers are approved without a deposit, but a lender may ask for one if:
- Your credit score isn’t the best (or you have no credit history): bad or no credit makes you a greater risk to a lender, so a deposit may be required in some cases.
- The car is outside your borrowing range: lenders assess your income, expenses and other factors to set how much you can borrow. If the car costs more than that, you’ll need to cover the difference.
- Your lender’s valuation is lower than the sale price: the same applies if the lender values the car at less than the price you’re paying. You’ll need to pay the rest out of pocket if this is the case.
- You’re refinancing with negative equity: if you’re selling your car before the end of your loan term or refinancing your car loan and the vehicle is now worth less than your outstanding balance, you’ll need to pay the shortfall.
Each of these can push the loan above the maximum LVR a lender will accept, which is why a deposit brings it back within range.
You may also be asked for a different kind of deposit, even with a no deposit car loan. Dealers usually take a holding deposit when you sign a contract. This is separate from your loan and it may not be refundable if your finance falls through. Ask whether the contract can be made subject to finance approval and check the rules with your state or territory consumer affairs office.
How much does no deposit car finance cost?
A no deposit car loan costs more overall than one with a deposit. You borrow more, so you pay interest on a bigger balance. The following table shows how a deposit changes the cost of a $40,000 car:
| Loan amount | Deposit | Loan term | Interest rate | Monthly repayments | Total interest |
|---|---|---|---|---|---|
| $40,000 | $0 | 5 years | 7.50% p.a. | $802 | $8,091 |
| $38,000 | $2,000 (5%) | 5 years | 7.50% p.a. | $761 | $7,687 |
| $36,000 | $4,000 (10%) | 5 years | 7.50% p.a. | $721 | $7,282 |
| $32,000 | $8,000 (20%) | 5 years | 7.50% p.a. | $641 | $6,473 |
| $28,000 | $12,000 (30%) | 5 years | 7.50% p.a. | $561 | $5,664 |
| Figures are for illustrative purposes only and exclude fees. Rates aren’t necessarily reflective of what you’ll receive on your car loan and will vary depending on your circumstances. | |||||
As you can see, a 10% deposit of $4,000 saves about $80 a month and over $800 in interest. That's the extra you pay for borrowing the full amount. However, not all borrowers will have that money available upfront, which is why many choose the convenience of no deposit car finance.
Your deposit is only one of the things that affect what you pay, though. The other main ones are:
- Interest rate: the higher your rate, the more you pay overall.
- Loan fees: establishment and ongoing fees add to the cost of the loan.
- Loan term: a longer term lowers your repayments but raises your interest, as the balance takes longer to fall. On the same $40,000 loan at 7.50% p.a., repayments are $1,244 a month over three years and $614 over seven, but total interest rises from $4,793 to $11,537.
What fees come with a no deposit car loan?
No deposit doesn’t mean no fees. Common costs include:
- Establishment fee: charged to set up the loan, and it can be added to the amount you borrow. Some lenders waive this fee, but many will charge up to $600.
- Monthly fee: an ongoing account fee for as long as you have the loan. Again, some won’t charge this, but those that do will usually charge between $5 and $15 each month.
- Early repayment fee: charged if you pay the loan off before the end of the term, so check the fine print. The cost can depend on your interest rate and how long is left on your loan.
- Late payment fee: charged if you miss a repayment or pay it late.
The comparison rate is a single figure that includes the interest rate and fees. When comparing loans with the same amount and term, the comparison rate provides a more accurate indication of your finance deal’s cost than the interest rate itself.
Should I add a residual payment instead of a deposit?
A residual or balloon payment is similar to a deposit, but is required to be paid at the end of your car loan term. It means you don’t have to pay anything up front, but there’ll be a lump sum due down the track.
Whether you should add one to your loan agreement comes down to your preferences as a borrower. While adding a balloon payment does decrease your repayments like a deposit, it increases the total interest you’ll have to pay. It also means that you’ll have to budget enough to cover the lump sum due at the end of your term.
The following table demonstrates the cost implications of adding a balloon payment to the same $30,000 car as above:
| Loan amount | Residual | Loan term | Interest rate | Monthly repayments | Total interest |
|---|---|---|---|---|---|
| $40,000 | $0 | 5 years | 7.50% p.a. | $802 | $8,091 |
| $40,000 | $4,000 (10%) | 5 years | 7.50% p.a. | $746 | $8,782 |
| $40,000 | $8,000 (20%) | 5 years | 7.50% p.a. | $691 | $9,473 |
| $40,000 | $12,000 (30%) | 5 years | 7.50% p.a. | $636 | $10,164 |
| Figures are for illustrative purposes only and exclude fees. Rates aren’t necessarily reflective of what you’ll receive on your car loan and will vary depending on your circumstances. | |||||
Adding a 10% residual decreases your payments by less than a 10% deposit, plus it’ll increase your interest bill by around $700, compared to saving $800. Because your balance falls more slowly, you could owe more than the car is worth for longer.
Ultimately, whether a residual suits you depends on if you believe the lower repayments are worth the extra interest and the payment at the end.
The pros and cons of no-deposit car loans
Pros
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Keep your savings intact
Your money stays available for emergencies, bills or other goals instead of going into the car.
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Get the car sooner
You can buy now and repay over time, rather than waiting until you’ve saved a deposit or enough to buy it with cash.
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Option to cover on-road costs
Some lenders will include motor vehicle duty, registration and insurance in the loan, so you can borrow over 100% of the car’s price.
Cons
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Higher repayments
On a $40,000 car at 7.50% p.a. over five years, repayments are $802 a month with no deposit, compared to $721 with a $4,000 deposit.
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More interest overall
The same example costs $8,091 in interest with no deposit and $7,282 with a $4,000 deposit, a difference of $809.
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Greater risk of negative equity
Because you borrow more, your car’s value can fall below your outstanding balance. This can leave you out of pocket if you sell before the end of the term.
No deposit car finance eligibility and documentation requirements
Eligibility
- You must be at least 18 years of age
- You must be an Australian citizen, permanent resident or eligible visa holder
- You must be employed and earning a stable income from one or more sources that comfortably supports your repayments (starting from as little as $480 per week)
- You must meet your lender’s minimum credit score requirements
- Your car must meet your lender’s type, age and condition requirements
Documentation
- Your driver’s licence, front and back (or another form of government-issued ID)
- Your last two consecutive payslips (or your last tax return if you’re self-employed)
- 90 days of bank statements may be requested, but not always
- Information about your car, such as its age, is handy to have on hand
Top tips for maximising your car loan approval chances with no deposit
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Choose a less expensive car
The less you borrow, the lower the risk your lender takes on. That can make approval more likely and keeps the repayments within your budget.
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Avoid applying to several lenders at once
Each application is noted on your credit report and too many in a short time can lower your score. Applying through a broker means one assessment can be matched against multiple lenders with a soft credit check.
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Apply with a co-borrower or guarantor
A joint application with your partner, or a parent or grandparent signing on as a guarantor, can boost your chances. Two incomes are better than one, while a guarantor can act as an extra layer of security for the lender.
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Cut unnecessary expenses and pay down debt
Lenders look at your spending and DTI, so cancel unused subscriptions, lower credit card limits where possible and pay down other debts before you apply. Even a few months of tidier statements can help.
