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Getting a car loan as a temporary resident in Australia can be challenging, but it may be possible with the right lender. While many will only accept applications from Australian citizens and permanent residents, others are open to working with temporary visa holders who meet their criteria. Navigating the process can be complex, but Savvy’s experienced brokers are on hand to help you explore your options.
Not all visa types will be accepted for a car loan and eligibility varies from lender to lender. At Savvy, we work with a wide panel of lenders that may be able to help temporary residents on the following visas:
However, other visas are not typically eligible for a car loan, such as:
Note: If you are on a visa that has been repealed but remains valid, you may still be eligible for a car loan if lenders previously accepted that visa, provided you meet the lender’s other criteria. For example, the 457 visa was abolished in Australia in 2018 but temporary residents already on this visa can continue to apply for finance.
Emily moved to Perth six months ago on a four-year TSS 482 visa. While she enjoys her new job in healthcare, the long shifts and irregular hours make it tough to rely on public transport, especially given the limited options and long commuting distances.
Emily has been saving since arriving in Australia but has only managed to put aside $3,000. She knows a brand-new car is out of reach, so she focuses on reliable second-hand options. After researching, she finds an older but well-maintained Hyundai i30 for $15,000, which is both affordable and practical for her needs.
In need of finance to cover the remaining $12,000 but unsure of her options as a temporary resident, Emily contacts Savvy. After reviewing her situation, her dedicated broker finds a lender willing to offer a three-year loan term, aligning with the remaining length of her visa. With her salary of $85,000, Emily can comfortably manage the monthly repayments alongside rent and living costs. The loan offers Emily a quick and affordable route to car ownership, allowing her to get on the road sooner without financial strain.
Lenders are more cautious about approving car loans for temporary residents due to the higher risk involved. Key reasons include:
Temporary residents may face stricter lending conditions compared to Australian citizens and permanent residents. This may include:
“For the best chance of getting finance approved on a temporary visa, here's what you need to do:
1. Have your passport, visa and any driver's licence available.
2. Enquire with a broker like Savvy as many lenders don’t accept visa applicants. Savvy can advise how many lenders there are to choose from.
3. Some lenders (not all) will need to see bank statements. Bank statement conduct can often cause a loan to be declined so here are some tips to ensure a smooth application process:
4. A deposit is not always required but it helps to get you approved.
5. Avoid making multiple credit enquiries within a short space of time as this can damage your credit score. Use a broker, who will use a soft check to determine if you can get finance, rather than applying to multiple lenders.”
When you're looking to buy a car, you may have the option to use either a car loan or a personal loan.
If you're in Australia on a temporary visa, you may find it easier to get a car loan because the vehicle itself reduces the lender’s risk. This means that even without a long credit history in Australia, you stand a better chance of approval. Car loans also tend to come with lower interest rates compared to personal loans.
However, in certain circumstances, you may find a personal loan for temporary residents may be a more sitable or viable option. These types of loans are well suited for situations where you need to borrow smaller amounts and can be used for more flexible purposes as you choose, such as covering medical costs or funding home improvements, as well as buying a car.
Bridging visa holders are usually ineligible for car loans because their visa status depends on government decisions, which could go either way. Due to this uncertainty, most lenders do not accept bridging visas for car finance.
Beyond loan repayments and interest, you'll need to budget for essential costs like car registration, insurance, fuel, maintenance and servicing. Some states also require roadworthy inspections, which can increase your upfront expenses.
Yes, in Australia every registered vehicle must have Compulsory Third Party (CTP) insurance, which provides a basic level of protection if you are in an accident. Optional insurance policies, such as third party property damage or comprehensive insurance, provide additional protection. When you take out a car loan, most lenders will require you to take out comprehensive insurance. This is because the car acts as security for the loan, and lenders want to ensure it’s protected against damage, theft or loss. Without comprehensive cover, a borrower could be left unable to repay the loan if something happens to the vehicle.
Yes, but the rules vary by state. In most states and territories, temporary residents can drive on their foreign licence for the entirety of their stay, and there are no restrictions on buying a car as a foreign licence holder. However, in Victoria, you must transfer to a local licence after six months, and in the Northern Territory, after three months. If you become a permanent resident, you'll generally need to switch to an Australian licence.
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