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Everything You Need to Know About our Car Loans

Applying for a Loan

We sat down with our very own car loan specialist team to clear up the most frequently asked questions that our customers have about our car loans. So, let’s get started:

What can you use a Fair Go Finance car loan to buy?

You can use our car loan product to purchase all types of registered vehicles. It could be a car, boat, trailer, horse float, motorbike, caravan, motorhome or anything that has its own registration. Our car loan product can also be used to refinance an existing vehicle lease or an existing vehicle loan.

If I have a bad credit rating, will this affect my chances of getting a car loan?

Your credit rating affects your chances of getting a car loan in the same way it can affect your chances of obtaining any type of loan. This is because your credit rating (or score) generally contributes to how much you may be eligible to borrow and the loan terms that may be offered to you, such as the interest rate, term and fees.

As a general rule, the better your credit rating is, the more likely your loan may be approved with lower rates and conversely, the weaker your credit rating is, the harder it may be to be successful and the loan costs may be higher as well.

Here at Fair Go Finance, we are able to consider average credit rating customers, unlike the Big Banks who generally require either a very good or excellent credit rating. We will look at your credit file/rating and your last 90 days of bank statements and this information will help us determine if the loan is affordable and if it passes our lending criteria.

Please also know that for our larger car loans (from $5,000 up to $24,000) we will use the car or vehicle as security for the loan. A secured loan means we will register an interest on the vehicle, so in the event the loan is not repaid, the vehicle can be sold to recover the outstanding loan.

Does a car loan affect my credit score differently from a personal loan?

No. A car loan credit enquiry with Fair Go Finance is just like a personal loan enquiry with Fair Go Finance – they do not impact your credit score differently.

One behaviour that will negatively affect your credit score is if you make multiple loan enquiries in a short space of time. This is something that most lenders identify as a credit risk and they may decline your application. It’s important to do your research to find a loan provider that suits your credit rating and only apply with that specific lender, rather than submitting multiple loan applications in the hope that one will be approved.

One way to help improve your credit score is to make your loan repayments on time with a lender who has adopted Comprehensive Credit Reporting. Over time your consistent repayments will show you are reliable with repaying debts, which can help you to not only boost your credit score but also give you more access to a wider range of loan options in the future.

Can I get a car loan without a license?

Yes, you can. In fact, we have helped a number of customers who were on their L plates when they took out their car loan with us. As long as the loan is in your name and you have comprehensive insurance to cover the vehicle, then you’re welcome to apply.

Can I get a car loan without insurance?

Here at Fair Go Finance, comprehensive insurance is required for all of our secured car loans as it is needed to cover the value of the vehicle.

We require insurance because it helps to protect you in the event your car is ever written off or majorly damaged. Without insurance you could be left with a car loan debt you still need to repay, but with no car to drive, which is a situation no-one wants to be in.

Is our car loan secured or unsecured?

All of our car loans over $5,000 are secured. This means the car or vehicle is used as an asset against the loan and we will register our interest over the vehicle via the Personal Property Securities Register (or PPSR). In the event the loan repayments aren’t being made and no effort is made to get the loan back on track, the vehicle can then be legally sold to clear the outstanding debt.

By having the loan secured, it allows us to help customers with a poorer credit score because the security of the car helps to strengthen the loan and reduce the credit risk.

Do you transfer the loan funds directly to the seller of the vehicle?

Yes, we will always transfer the money straight to the dealership or private seller on your behalf.

How long do I have to find a vehicle when I have a conditional offer?

Ideally, you will need to find your new vehicle within 14 days. If it does take you longer to find the vehicle you want, please get in touch with us so your offer doesn’t expire.

If it takes you longer to find a new vehicle, please be aware you may need to be reassessed. The reassessment won’t be listed on your credit score as it’s still in the conditional offer phase, but we will need to confirm your financial situation hasn’t changed.

The key thing is to please keep us informed. Whether you need more time to find a car, or down the track if you think you’ll need to adjust a payment, the best thing you can do is talk to us. We’re very flexible and will do what we can to help you go forward and to protect your credit rating.

What documents are required for a car loan?

For a car loan application, we’ll need you to provide 90 days of bank statements, some I.D information (for example your Medicare number or driver's license) and potentially a pay slip.

If you want to purchase a vehicle from a dealership, we will need a copy of the invoice from the dealership which contains the contract of sale, details about the car and the dealership’s bank account information.

If you are buying a vehicle from a private seller, we’ll provide a blank tax invoice for you and the seller to use. We’ll also need to see the certificate of registration from the seller and details of the bank account to transfer the funds to. This can be something as simple as a bank statement or an account summary so we can be sure that the bank account we are transferring the funds to belongs to them.

And don’t forget, we’ll also need a certificate of insurance that shows one year of comprehensive coverage and lists us (Fair Go Finance) as the financial interest.

What happens if I miss a car loan repayment?

A common misconception with secured loans is that we will repossess the vehicle if you miss one repayment. This is certainly not the case, and we will always try to work with you to get your loan back on track. In reality, it takes a number of missed payments and is always the last resort for us to need to seize the vehicle.

If you ever need to miss a car loan repayment, please call us. We can work together through your options so do what we can to protect your credit rating as much as possible.

How does the pre-approval process work if you don’t do a full credit check?

To start, when you apply for our car loan, we will do a soft credit check. This is just to understand what your credit score is without doing a full credit check and listing an enquiry on your credit file.

This soft check allows us to determine if we can offer you a conditional car loan amount. If we can, you can then shop with confidence knowing exactly what your budget is.

Then, when you find a vehicle, you just need to provide us with the car details. We will assess the vehicle’s worth and confirm the final loan amount. At this stage, we will run a full credit enquiry which will be shown on your credit report.

If nothing has changed, you can sign your final loan contract, and we will transfer the funds to the seller or dealership so you can pick up your new vehicle.

How do you assess the vehicle’s worth?

We use a specific program to assess the value of a vehicle, which is likely to be the same technology and information that your insurance company will use too.

With the confirmed value we will then calculate the loan to value ratio, which is dividing the loan amount by the assessed value of the vehicle. As long as this ratio meets our guidelines, your loan will proceed.

Don’t worry – we don’t expect you to calculate and fully understand these ratios – as long as you provide us with the car details, we can quickly confirm the ratio for you. Please know all of this assessment work won’t cost you anything, nor will it affect your credit score. It’s just important that we make sure you are not paying too much for a vehicle which is not worth what the seller is asking and potentially may not be insurable for the loan amount either.

What is important for our customers to be reminded of?

It’s important to know that all of our car loans between $5,000 and $24,000 are secured. This means your vehicle will be used as security for the loan because we will register our interest against it through the Personal Property Securities Register (or PPSR). By using the vehicle as an asset against the loan, it helps show your commitment to repaying your loan. In the event the loan isn’t repaid, the car can be sold to clear whatever outstanding debt there may be left on the loan.

And one last thing we’d like to remind you of is to never be afraid to call us. Our staff are here to help you and support you throughout your loan.

That’s all from our car loan specialist team. If you have any questions about our car loans, check out our car loans page or please give us a call on 1300 324 746.