When you are looking for a new or used car, many borrowers choose to use dealership finance options. In most cases, a new or used car dealership will only have a small range of loan options available with very traditional lending options.
What this means is that a finance department at a car dealership may not be able to provide solutions for borrowers with low credit, or ABN holders or even borrowers who work casual or part-time jobs.
If you have been declined for finance at a car dealership, don’t worry – you still have options to apply for great low rate new or used car finance.
Reasons why you may get declined for finance at a car dealership:
- Low income
- Poor credit
- Too young – no credit history
- Not an Australian resident
Here are our top 3 tips for people who have not received approval for car dealer finance:
Ask the dealership why the application got declined
You should be able to get some feedback on why your application was declined. It could be due to poor credit or low income. Whatever the reason, if you are aware why, you can then source more appropriate finance options. Using a broker can be a great option as they can provide feedback on which lenders suit your situation. Just as there is no one-size fits all solution, not all banks and lender have the same lending criteria.
Apply for new or used car finance with a broker
Don’t go straight into an application. It may be helpful to speak to a broker and explain you have been declined for finance at the dealer and if possible, provide information as to why. This will allow a broker to recommend finance that is most suitable for your unique circumstance.
Consider saving a small deposit or waiting before applying again
You may be given advice to wait before applying of a broker or lender feels you may get declined again.
Sometimes the difference between and approval or rejection for finance is simply timing. Maybe you need to stay at your role for a few extra months to prove your income, or maybe you need to demonstrate a small amount of savings before you can get approved. Whatever the case, having too many rejections on your credit file can potentially make things harder in the future.
What to do next
If you are unsure about what your options are the team at National Finance + Loan can help talk to you about your situation and provide options for car finance. We work with over 20 lenders including banks, peer to peer lenders, boutique lenders and more.