However, dealers aren’t just low-balling you. They are making a wholesale offer to cover their margin and reconditioning costs to on-sell the vehicle.

To negotiate effectively, you must know how to find the trade in value of your car using data rather than sentiment.

In this article, we’ll share a repeatable method to estimate a realistic trade-in range,

Why Trade-In for Less? 

Seeing cars like yours listed online for $30,000 but receiving a $22,000 offer may come as a shock.

There are some biases of course, that lead people to assume the best case scenario for their sale. 

But the reality is that a trade-in is transacted at a wholesale figure or it is not worth the dealership’s time. 

You cannot compare wholesale offers to retail advertisements. 

Dealers incur significant costs to bridge that gap and transform your trade-in into a retail-ready vehicle. 

The costs can go into things like:

• Reconditioning: Paint correction, new tyres, and mechanical roadworthy repairs.
• Statutory Warranty: Mandatory legal coverage for faults after the sale.
• Holding Costs: Interest and insurance paid while the car sits on the lot.
• Profit Margin: The necessary markup for the business to operate.

So the real question is whether the convenience and time saved is worth the reduced sale price you will get at a trade-in. 

If the answer is yes, then your goal is to estimate a realistic wholesale price range. 

Follow the steps below to establish a range of values prior to going into the dealership. 

4 Steps to Determine Your Trade-in Value

1. Capture the Exact Vehicle Identity

Generic descriptions lead to defensive, low-ball offers. Dealers hedge their risk against the unknown, so you must identify the exact Series and Trim level. 

For example, a 2018 Mazda CX-5 Maxx commands a significantly lower price than a top-spec Akera.

Consult your registration papers or purchase contract to confirm:

• Specs: Year, Make, Model, Series/Badge, Body, Fuel, and Transmission.
• Status: Exact odometer reading, registration expiry, and any active warning lights.
• Evidence: Service logbooks, invoices, manuals, and both keys.

Missing items like a spare key or service history can reduce a valuation by hundreds of dollars. 

2. Industry Source Valuation Method

There are three easy to access data points that can help build a defensible price range before visiting a dealership.

Source A: Valuation Guides

Check RedBook or Glass’s Guide. 

Ignore Retail figures and focus strictly on the Trade In Price. 

Be honest about the condition of the vehicle.

Wear and tear like scratches, dents, or missed services may force you to the lower end of that bracket.

Source B: Live Markets

Scan Carsales or Gumtree for the same year, trim, and KMs. 

Take the lowest comparable asking prices and deduct 10-15%. 

This accounts for the asking price optimism and brings you closer to a realistic transaction value.

The prices you see are not always the price the cars are sold at. 

Source C: Instant Online Offers

Get an Instant Offer quote online. 

Treat this as a conditional baseline and an alternative offer to fall back on if the dealership makes a ridiculous offer. 

You now have a floor for your negotiation and your price range goes from there up to the top of the valuation guides (if in immaculate condition). 

Each number is now your Target Price and your Walk-Away Number. You now have the data to spot a lowball offer immediately.

3. Dealer’s Trade-in Appraisal

Dealers use a rough checklist that includes the mechanical reliability, retail appeal, and expected reconditioning costs. 

Any money they must spend to make the car sellable comes straight off your offer.

The following items can hurt your trade-in offer the most: 

• Mechanical faults: Dashboard warning lights indicate expensive repairs.
• Roadworthy items: Worn tyres, brakes, or windscreen damage are instant deductions.
• Missing essentials: A missing car radio, window buttons, or a door handle will all need to be replaced. 
• Odours: Smoke, mould, or pet smells destroy retail appeal.

Do not spend money fixing minor scuffs, dents, or scratches. 

Dealers repair these at wholesale rates far cheaper than you can. Likewise, modifications rarely add value as they narrow the buyer pool.

4. Negotiation

Dealers often use changeover figures to blend the new car price with your trade-in value to reach an overall deal between the two transactions. 

While this is common practice don’t let it cloud the prices you are getting on each element of the deal. 

Be clear on what the offer is strictly for the vehicle, and if you want to negotiate the price or balance between the number allocations this is up to you. 

In terms of sequencing, you can easily separate the discussions by seeking a trade-in price up front and then looking for a car? Or vice versa. 

Maximise Your Trade-in Offer With Low-Cost Fixes

Do not spend money fixing dents or scratches. Dealers have wholesale repair networks that fix cosmetic issues far cheaper than you can. 

Instead, focus on small, cheap fixes that stop a dealer from bigger assumptions that the car was neglected.

Cleanliness

A dirty car screams hidden mechanical issues. 

Remove all rubbish, deep vacuum the seats, and wipe down the dash. 

Eliminate odours immediately because a bad smell is an instant value killer. 

Fix Obvious Deductions

Replace worn wipers, blown bulbs, and top up fluids. These cost peanuts but stop dealers deducting hundreds for general roadworthy repairs. 

If tyres are clearly end-of-life or mismatched, replace them with budget options to avoid a premium deduction.

And find that lost second key. It makes everyone’s life easier! 

Frequently Asked Questions

The Trade-In Value Checklist

A trade-in will never get you the best possible price. You’ll have to sell privately for that. 

But what you do want is to be treated fairly at the dealership. The best way to do this is some basic research which should only take you 10 minutes. 

You still have to be realistic about the condition of the vehicle, and the KMs on the clock, but you will be far better off with a little bit of research. 

Check out our available stock now and the team at Gusto can do a deal for you today.

You trade the consumer protections of a licensed dealership for a lower price, but take on significantly more responsibility. 

If you are weighing up the Pros & Cons of Buying a car privately, this guide details the specific risks and administrative hurdles you must manage. 

We will cover the essential checks, payment processes, and paperwork required to ensure a safe handover.

Pros of a Private Car Sale

Potential Savings

Private sales remove the middleman, often saving you 10-20% compared to dealership prices. 

You avoid paying for showroom overheads, sales commissions, and the reconditioning fees baked into dealer stock.

You also gain a negotiation edge because some private sellers often value speed over maximum profit. 

If they just want a fast, low-stress exit, you are well placed to get a better deal.

Use these practical steps to negotiate effectively:

• Show the seller comparable listings with similar kilometres and trim to prove your offer is fair.
• Use issues like worn tyres or scratches found during the test drive to justify a specific price reduction.
• Show up with a deposit ready and finance pre-approval to win against other buyers.

However, a low price is not a guarantee of quality. Never let a discount distract you from completing a PPSR check and a proper mechanical inspection.

Unlimited Choice and a Fast Purchase

Dealerships limit you to their current stock, unless they offer a custom buying service. 

Buying privately opens the entire market so you can find the exact make, model, and specs you want.

Speed of Transaction

If prepared, the transaction you can buy on the spot.

You can inspect the car, negotiate the price, and agree on handover terms in a single meeting, but should only do so if you have some car knowledge.

In most cases, a mechanical inspection is a smart move prior to committing to the purchase. But this will take time. 

Cons of Buying a Car from a Private Seller

Higher Mechanical Risk

Private sales are strictly buyer beware. 

Unlike purchasing from a licensed dealer, there is no statutory warranty or cooling-off period to protect you.

Once money changes hands, the car is your problem. 

If the engine light turns on during the drive home, you cannot demand a refund or repair. 

Disputes are notoriously difficult to resolve because you are negotiating with an individual, not a regulated business process.

The lack of consumer protection hits these buyers hardest:

• Older Vehicles: High-kilometer cars are statistically more likely to suffer immediate mechanical failure.
• Tight Budgets: If you stretch your finances to buy the car, a surprise repair bill becomes a financial disaster.
• Work Vehicles: If you rely on the car for income, you cannot afford the downtime of a breakdown.

You may need to retain a cash buffer in case of emergency repairs when considering your budget. 

You should also never finalise a private sale without a comprehensive independent mechanical inspection.

This adds additional cost and takes time.

You are Responsible for Checks

It is the buyer’s responsibility to confirm the vehicle’s history, condition, and if it is free of an encumbrance.

Conduct a search on the Personal Property Securities Register (PPSR) to see if there is any existing security over the vehicle.

The search costs a few dollars and should be done before all sales.

In the same search you will also get information on the Written Off Vehicle Register (WOVR).

This tells you if the vehicle has previously been involved in a serious accident.

You also need to check the existing registration, and/or loan paperwork to be sure the seller is the legal owner of the vehicle. 

Administrative Burden

When buying privately you will have to coordinate with the seller to ensure the registration is transferred to you in a timely manner.

A notice of disposal should be completed by the seller within a set deadline. But you will need to follow up to ensure this is done. 

Compared to a dealership sale where the majority of the paperwork is done for you, this can be an additional time commitment. 

More Difficult (and Costly) to Finance

Lenders often add an additional setup fee when establishing a car loan on a private sale due to the extra administrative work involved. 

In some cases, they also charge a higher interest rate depending on the lender. 

Before securing approval, there may be additional work required to help the lender assess the vehicle as viable security. 

This usually involves using software as directed by the lender to facilitate these checks.

This can slow things down and frustrate the seller of the vehicle. Especially when asking for their personal information. 

For example, you may be required to provide: 

• Make, model, and year
• VIN
• Seller’s ID 
• PPSR checks done in platform
• Multiple photos of vehicle

Payment Risk

You will need to balance the timing of the payment to the seller to ensure that you can take possession of the vehicle simultaneously. 

This is now much easier with things like PayID or Osko able to process instant payments, but be weary of transaction limits in your account. 

A bank may also enforce a 24-hour hold on payments to new payees, which can delay things further. 

Ideally you write out the agreement on paper prior to making payment and taking possession of the vehicle. This should include: 

• Date, time, sale price, VIN, and registration number.
• Full names and signatures of buyer and seller.
• All inclusions (spare keys, logbooks, accessories).

Frequently Asked Questions

Summary

Private sales offer lower prices but shift all risk to the buyer. 

You have zero statutory protection and places the responsibility for a clean PPSR check, independent mechanical inspection, and insurance on the buyer. 

If you can’t verify the ownership, current registration, and vehicle history, then you should not buy it.

If you need help navigating the strict finance criteria on a private sale then get in touch with out team of brokers today.

While that discount is tempting, its WOVR status creates hurdles for registration, insurance, and finance.

Buying one requires some additional due diligence, but is not something to shy away from if you are thorough. 

This guide provides a step-by-step checklist to avoid expensive surprises before you sign the contract of sale. 

Dealership vs Private Sale of a WOVR Vehicle

It is worth noting upfront that these tips are most applicable to dealing with a private seller. 

A licensed and reputable dealership will only sell the vehicle if all of the checks listed below have been completed. 

They are on the hook for statutory warranty costs and have a reputation to protect. 

So, it is in their best interest to be thorough prior to the sale. 

We, at Gusto Auto, have sold WOVR listed vehicles in the past, and only listed it for sale when it was in immaculate condition. 

Statutory vs. Repairable: Know The Difference

The Written Off Vehicle Register (WOVR) has two categories, and the difference is critical.

• A statutory write-off is permanent. It can never be legally re-registered in Australia and is only suitable for scrap or parts.
• A repairable write-off can be fixed and returned to the road, but only after passing strict state-based inspections. 

These are often economic decisions, where an insurer decides the repair cost plus salvage value is more than the car’s market value.

This is the only category you should consider. If a seller cannot show clear evidence of compliant re-registration, walk away.

Check Your State’s Registration Rules First

The vehicle’s current location is irrelevant. Your only concern should be the state where you plan to register it.

Every state has its own rules for repaired write-offs, and they vary significantly. 

Victoria, for example, requires a comprehensive Vehicle Identity Validation (VIV) inspection. 

New South Wales is even stricter, with tight restrictions on accepting repaired write-offs that were processed interstate.

Confirming your state’s exact compliance requirements before you negotiate is non-negotiable. 

This step ensures the vehicle has a clear, achievable registration path, preventing you from buying a car you can’t legally drive.

Run an Official PPSR Search and Verify the VIN

Your most important safeguard is a cheap PPSR search. 

For just a few dollars you can confirm if finance is still owing on the vehicle (an encumbrance) and its write-off history from the WOVR.

With the report in hand, physically inspect the car. Locate the VIN plate or stamp and ensure it matches your PPSR certificate and paperwork exactly. 

A mismatch is an instant deal-breaker, as it can indicate a stolen or rebirthed vehicle. 

If a seller hesitates to provide the VIN before an inspection, walk away.

Verify the Repairs with a Paper Trail and Your Own Expert

A low price is meaningless without proof of quality repairs. 

Vague stories like “a mate fixed it” or missing paperwork are major red flags.

Request a Paper Trail

Insist on seeing documentation from the seller, including:

• Repair invoices with ABNs and receipts for all new parts.
• Official inspection certificates used for re-registration.
• A repair diary with photos, if available.

Book an Independent Inspection

Always use your own mechanic, not the seller’s. 

Ask them to focus on:

• Chassis alignment and signs of poor structural repair.
• Any electrical faults, which are common after major damage.

Pricing in the Risk: How to Calculate Your Offer

The WOVR flag is a permanent value limitation.

A repaired write-off vehicle should trade for 25-40% less than its clean market value. 

This discount is non-negotiable and accounts for a smaller buyer pool, harder financing and insurance, and permanently damaged resale value.

To calculate your maximum offer, start with the vehicle’s standard market price. 

First, apply the write-off discount. Then, subtract costs for your inspection and any state compliance fees. 

Only proceed if the final price creates a significant enough saving to justify the risk.

Get Your Insurance and Finance Approved First

A cheap write-off is only a good deal if you can insure and finance it. 

You must disclose the vehicle’s history to insurers and get written confirmation of cover before committing.

Some mainstream lenders reject repaired write-offs as loan security, making lender approval a critical first step. 

If mainstream banks decline the car, a specialist broker can assess non-bank options.

Click the button below for an obligation free assessment of your finance options through our sister brokerage, Gusto Finance. 

Frequently Asked Questions

Is a Repaired Write-Off Worth the Risk?

A repaired write-off is only worth it when its paperwork, compliance path, and discount offset the permanent stigma and resale risk. 

You must verify its category, PPSR status, and repair quality before securing final approvals.

Whether you are a prime or credit-challenged borrower, speak with your broker early. 

Confirming the vehicle is lendable before you pay a deposit is a simple check that prevents costly mistakes and wasted time.

In this article, we will provide simple benchmarks that most buyers can use when assessing a used vehicle to purchase.

We have also included a decision framework to assess the risk of heightened maintenance costs if you are considering a high kilometre vehicle.

Kilometre Risk Bands

Instead of a single cut-off, view kilometres in four distinct risk bands. 

Each band signals a critical shift in expected maintenance costs, resale value, and your ability to secure finance.

The bandings are a guide only and variations in how the vehicle is treated and the timing of maintenance issues can lead to vastly different outcomes. 

Which is why a full mechanical inspection can be prudent. 

Under 100,000 km

This is the lowest-risk category. Especially if the sale is accompanied by a complete service history.

Depending on the age, some may still be covered by the original manufacturer’s warranty which reduces mechanical risk significantly.

100,000–150,000 km

Crossing 100,000 km is a psychological barrier for many buyers, which lowers resale value. 

This is also when big ticket service items, such as timing belts or complex transmission servicing, typically become due.

The increased future maintenance expenses should be considered when buying. 

150,000–200,000 km

This higher-risk territory when major wear-and-tear components often require replacement. 

Think suspension bushings, clutches, and entire brake systems. 

However, you will be buying the vehicle at a much lower price.

Over 200,000 km

Whether a vehicle is a good buy at this point largely depends on what has already been replaced, and when. 

If major engine or transmission repairs have already been carried out then you may be able to find a great buy. 

It is also worth noting that some vehicles will stand up to this distance range better than others. For example, a 4WD or ute. 

Calculate the Car’s Annual Driving Average

An odometer reading is meaningless without context. To understand a car’s real usage history, calculate its annual average with this formula:

Total Kilometres ÷ Vehicle Age in Years = Average KM Per Year

Compare this figure against the typical Australian driving average of 12,000–15,000 km per year. 

The result tells a story:

• Too high: A number far above the benchmark suggests heavy use, possibly as a rideshare car or courier van. Expect higher wear on the engine, driveline, and suspension.
• Too low: An unusually low figure can mean the car sat idle for long periods, causing seals to dry out. It could also indicate a life of short trips, which are harsh on an engine.

The type of driving matters, too. 20,000 highway kilometres can be gentler on a car than 10,000 kilometres of stop-start city traffic.

Use this number not as a final verdict, but as a powerful question to ask the seller about the car’s history.

Verify the Logbook

A logbook full of stamps looks reassuring but reveals little.

A good service history includes itemised invoices from a consistent workshop, proving work was done at regular intervals.

On high-kilometre cars, this is your only proof that expensive, scheduled jobs like a timing belt replacement were completed. 

A failed belt can destroy an engine, costing thousands.

Be wary of red flags that signal neglect or dishonesty:

• Long service gaps: Years of missed maintenance suggest potential internal wear.
• Sudden pre-sale work: A flurry of repairs can mean the owner is fixing just enough to sell a problem car.
• Mismatched records: Dates or kilometre readings that don’t line up are a clear warning.

If the history is incomplete, assume expensive catch-up maintenance is needed. Use this missing information as a powerful tool to negotiate a lower price. 

Budget for Future Repairs, Not Just Past Service History

A complete logbook proves past care, but it doesn’t erase future costs. 

Smart buyers budget for the high-kilometre services that are statistically due, turning unknowns into predictable expenses.

Before making an offer, factor in these common cost areas:

• Major Service Items: A timing belt replacement ($800–$2,000+) is a non-negotiable expense if due. Cars with a timing chain avoid this specific cost, but chain issues are often far more expensive to fix.
• Cooling System: Budget for ageing hoses and thermostats. The water pump is often replaced with the timing belt as a preventative “while you’re in there” job to save on future labour costs.
• Suspension & Steering: Worn bushes, shocks, and steering components are common after 150,000 km. A suspension refresh can easily cost over $1,500.
• Tyres & Brakes: Often a near-term cost on any used car purchase.

Neglecting one repair often creates another. 

A leaking water pump ignored during a timing belt service can cause the new belt to fail, leading to catastrophic engine damage.

If a major service is due, treat its cost as a direct deduction from the asking price. 

It’s not a future problem; it’s a current liability. 

Always get quotes for your specific make and model from a trusted mechanic before committing to the car or the car finance.

Run This 30-Minute DIY Inspection Before Making an Offer

Before paying a mechanic, use this 30-minute checklist to spot obvious deal-breakers. 

It requires 10 minutes for stationary checks and 20 minutes for a test drive.

• Paperwork: Match the VIN on the car to registration papers. Confirm the seller has a consistent service history and a clear PPSR check showing no money is owing.
• Walk-around: Look for uneven tyre wear, mismatched paint between panels, and rust bubbles around wheel arches or under doors.
• Engine: Check for visible oil leaks and look for milky residue on the oil cap. Inside, turn the ignition on to see all warning lights activate, then extinguish. 
• Interior: Test the air conditioning, windows, and locks.
• Test Drive: Listen for odd noises on a cold start. Feel for smooth gear changes, steering vibrations at speed, and confirm the car brakes in a straight line without pulling.

If this DIY check reveals any red flags, high kilometres, or a patchy history, a professional inspection is non-negotiable. 

The fee is cheap insurance against a potential $3,000 engine repair.

Decode the Real Wear on Utes and 4x4s

For utes and 4x4s, kilometres are a misleading measure of wear & tear. 

A vehicle used for heavy towing or constant off-roading endures far more stress than one covering the same distance on a highway.

Instead, look for physical signs of a hard life the odometer cannot show:

• Towing abuse: Check for a worn tow hitch, makeshift trailer wiring, and sagging rear suspension. The service history must show frequent transmission and differential oil changes.
• Off-road damage: Inspect the underbody for deep scrapes, bent bash plates, and caked mud in chassis rails. Aftermarket suspension lifts also suggest harder use.
• Corrosion: Look for rust under carpets and around wheel arches, especially on vehicles from coastal areas. Serious rust is a non-negotiable deal-breaker.

The cheapest high-kilometre work vehicle is often the most expensive to own. 

(Optional) Assess a Brand’s Reliability

If you really want to go down a rabbit hole then you can spend some time researching the long term reliability of the manufacturer and their models. 

Some brands are known for long-term reliability and cheaper parts, but it’s smarter to assess a specific model’s risk profile rather than relying on brand stereotypes.

To do this, investigate four key areas:

• Parts Cost: How expensive and available are common replacement parts?
• Specialist Labour: Does the car require specialist mechanics for routine servicing?
• Common Failures: What are the model’s most frequent big-ticket repair items?
• Owner Forums: Are there active communities sharing known issues and fixes?

A well-serviced European car can be reliable, while a neglected “safe bet” like a Toyota or Mazda can become a maintenance nightmare. 

Before you buy, research the model’s known issues online. 

This approach helps you follow the most important rule: buy the car you can afford to maintain, not just purchase.

Frequently Asked Questions

Your High-Kilometre Used Car Checklist

You can use this basic framework to separate genuine bargains from expensive mistakes.

• Filter by kilometre bands: Use the 100k, 150k, and 200k+ ranges as a starting point to gauge risk, not to make a final decision.
• Analyse the annual average: A car’s km/year figure reveals its history. Was it a highway cruiser or a city workhorse?
• Demand proof: A complete service history with invoices for major jobs is your best defence against hidden mechanical issues.
• Budget for what’s next: Factor in the cost of upcoming major services and a professional inspection when you negotiate.

Before you start, getting pre-approved for used car finance is the smartest move. 

It tells you exactly what age and kilometre limits lenders will accept for your profile, whether you have a perfect credit score, are rebuilding your credit, or are self-employed. 

Speak to one of our specialist brokers to match you with a lender comfortable financing high-kilometre vehicles, saving you from failed applications and protecting your credit score.

All anecdotal and based on a single experience, without a direct point of comparison. 

What you may not know is that it has become difficult to get a car loan directly from a bank. Yes, it is still possible. They just write fewer loans compared to years gone by. 

Both dealer finance and bank auto finance have their place serving a different type of customer. But how do you know which category you fall into? 

In this article, we will conduct a detailed comparison on a number of aspects of the financing process. 

You can then match the channel that excels against the criteria that best matches your own needs. 

Financing Source Definitions

Dealer Financing

Not all dealer finance service offerings are of the same quality. 

There are excellent operators who will find you the best possible loan option, and there are cowboys who will act entirely out of self interest. 

For the purpose of this article, we are assuming that you are dealing with a qualified finance broker who is at the top of their game. 

Gusto Auto has a sister brokerage named Gusto Finance has an expert team that handles all of our finance enquiries, and also for a number of independent dealerships around Australia. 

So how do you tell good operators from bad? You can get some idea by checking they are an accredited Finance Broker, and not just a Finance Manager, or business manager. 

Brokers will have access to a larger panel of lenders and have a higher regulatory standard to uphold compared to someone who dabbles in finance amongst other things. 

Note: Finance obtained directly through a vehicle manufacturer is excluded from this comparison. This is a whole other category compared to in-house finance at a used car dealership.

Bank Auto Finance 

For the purpose of this comparison, bank finance refers to a direct loan application made to a mainstream bank or credit union. 

They both have similar approaches to auto finance and the direct application means you are dealing with one financier. 

Bank Finance vs Dealership Finance Comparison 

Below are 9 elements of auto finance that will differ between the two sources of funding. 

The elements you care most about will be unique to you so as we go through you can tally up which is the superior option against each criteria. 

Product Range

When applying directly to a bank you can only access that specific bank’s products. 

Your options may be limited to a secured car loan, or an unsecured personal loan. 

There may be some interest rate tiers that you can qualify for if you meet set criteria. 

If you also have a mortgage with the same bank they may be able to offer special rates that you cannot get elsewhere. 

Dealer finance that is conducted through a competent broker would facilitate that one application accessing upwards of 40 different car loan providers. 

This allows you to find the best interest rate for your situation (which could include a bank), but also find the best match for what you are trying to achieve. 

Low rates count for nothing if you are not approved! 

Likelihood of Approval

The reality is that Australia’s banks love mortgages, they don’t love car loans! 

While most of the big names still advertise car loans, their appetite for these loans is much more restricted than a few years ago. 

You are more likely to be approved for a car loan if you have an existing history with the bank, potentially a mortgage customer, and a high credit score. 

But a large number of potential customers will not meet their elevated lending criteria. 

This is the greatest power of dealership finance, or using a finance broker to manage your loan application. 

Your application is matched with the lender where you are most likely to get an approval, and the best rate possible from the lenders where you meet all criteria. 

This could still mean a loan from a big bank, or perhaps there is a smaller non-bank lender that also has a competitive rate and willing to approve your application where others will not. 

This is especially important if you have had credit problems in the past. 

Application Convenience

A bank finance application can be reasonably straight forward if you are an existing customer and there are no curveballs in your application. 

But if you are not approved you will have to start from scratch elsewhere… and with a fresh loan rejection visible on your credit file that may take some explaining at the next bank or credit union. 

When applying through a dealer you will only have to make one application which will then be packaged up and relayed to the most suitable lender. 

We have already covered the potential to match with a greater number of lenders. But if one says no, then you can move on to the next without any additional effort. 

The dealer or broker will handle this all for you. 

Speed to Resolution

When you apply directly with a bank your application goes into the queue and you will hear back when it is your turn. 

This could be a day, or it could be almost a week. Fast turnarounds can happen, but they are not the norm. 

When applying through the dealership they will know the turnaround times of their lenders and can usually get a faster response. 

In the past, we have managed multiple applications from enquiry to settlement within the same day!

A bank will not be able to do this. 

Given that our brokers have working relationships with the lenders there is also an ace up our sleeve if an application must be expedited for special circumstances. 

Troubleshooting Problems

Speaking of working relationships, if there is an issue that would usually lead to a declined loan application our brokers will always jump on the phone with the lender to understand the issue. 

Perhaps you need to reduce your Buy Now, Pay Later use, or pay off a small debt to free up some additional servicing capacity. 

Whatever it is, a broker will be on the front foot to resolve the issue. 

When dealing directly with a bank it is rare that they specify the exact reason for a decline. 

So you may not know what problem needs to be solved or if it is solvable at all. 

This lack of information places you in a very passive state when receiving the loan decision and you have little right of reply and just have to move on. 

Influence over Vehicle Price

When a dealership organises finance for you they are usually going to get a commission as part of the loan settlement. 

So there is a financial incentive there for the dealership to find suitable finance for you. 

The opportunity to earn a bit extra could also motivate the dealership to be more flexible on the price of the vehicle than they otherwise would. 

This is not a hard & fast rule of course, but it is a negotiating chip you can use when discussing price. 

There is also an argument that a pre-approval from a bank is also a powerful negotiating tool. It shows you to be a serious buyer who is organise and ready to make a deal. 

However, until the bank know what you are planning to buy then that pre-approval is only part of the story. 

Whether a dealer will respond positively to this is uncertain. 

Asset Type Flexibility

A lesser know, but critical factor, when assessing you for a loan is the vehicle you intend to buy. 

Each lender has their own set of criteria for what they will hold as security, and what they will not. 

The age of the car, KMs on the clock, and a number of other factors could prevent you from getting approved even if your credit history is immaculate. 

A bank may not finance that older used car. 

Having access to the broad lender panel via the dealership could make all the difference here. 

Fee Structure

If you qualify for the bank loan, and apply directly, then this is likely to have the fewest fees attached. 

Establishment fees can be a significant cost and these are often quite moderate directly through the bank. 

If you get a bank loan via a dealership then an additional fee will be added which skews this equation in favour of going direct!

However, for reasons we have discussed throughout this article the broker fee is well earned in circumstances where their expertise is critical to getting the loan approval. 

Non-bank lenders may also have higher establishment fees depending on your individual circumstances. 

Overall Cost

The other missing component is the interest rate. Add in those fees to get the total cost over the life of the loan.

Making any kind of conclusion here is impossible with every individual situation being different. 

A direct to bank loan will often come out ahead despite having a higher interest rate once you account for the fees. 

The tricky part is actually qualifying. 

Dealership finance could be more expensive overall, but this is usually due to the type of finance you have qualified for rather than a byproduct of the dealership’s involvement. 

No matter the source, lenders are obligated to provide documentation that details the cost of finance over the life of the loan, and what your repayments will be. 

Understanding this detail is critical before you commit to a loan. 

One key difference is that a dealership representative may be more accessible in providing personal assistance to ensure you know what you’re are signing up for.

Assuming you are dealing with a competent and ethical operator. 

Comparison Summary

Bank Finance is Most Suitable

When you have an existing relationship with a bank and a flawless history in your dealings with them. 

Your credit score is very good and potentially also a property owner. 

If you can apply directly to the bank and be confident of an approval then this is going to be the cheapest option for your car loan. 

Dealer Finance is Most Suitable

If you are unsure of the best finance options for your circumstances and would like personalised assistance to find the most suitable options for you. 

If your credit score is less than outstanding you may need some direction to ensure you are placed where you can be approved. 

When buying a vehicle more than a few years old then you may also need that expertise to be matched with a lender that will finance the type of vehicle you are trying to buy. 

Conclusion

If you are unsure what finance channel suits you best then get in touch with our expert team for an obligation free consultation. 

There is not impact to your credit file until you formalise a loan application with a lender so there is no downside to starting a conversation. 

However, if you are confident that the direct to bank channel is right for you then we encourage you to pursue this. 

If the outcome is not as expected for whatever reason, the team will be here to help.

As long as you can show that you have a valid drivers license and at least some interest in buying then most will be happy to accommodate you.

It is a sales tool after all!

You are going to learn far more about a vehicle in two minutes of driving than you will with hours of online research.

So, if you have any hesitations in booking a test drive then this article should demystify the process for you.

What Are the Minimum Requirements for Test Drive

To meet the minimum requirements for a test drive, you only need to be old enough to buy a car, legally allowed to drive one, and have the intention to buy one.

Age

Most dealerships will require you to be at least 18 years old to test drive a vehicle, but others will not allow you to until 21.

So if you are under 21 make sure you check with the dealership ahead of time if you will meet their requirements for a test drive.

You can legally sign a contract from 18 years old. This can include a purchase contract, and a finance contract.

Both of which are required if buying through a dealership. If you can show you are a serious buyer while in that 18-20 year old range they may be more inclined to make an exception so they can make the sale.

Licence

A valid driver’s licence is a non-negotiable. This is both a legal and an insurance issue for the dealership.

Provisional licenses are ok in most circumstances unless the dealership has a specific policy excluding these drivers. But this would be rare.

You will need to present a physical copy of your license to the dealership prior to the test drive.  

Intent to Buy

While a dealership cannot know for sure if you plan on buying the vehicle, they can generally fish out time wasters early in the process through the usual questions they ask.

Are you ready to buy, do you have finance approved, what is your budget?

If you cannot answer any of these then a salesperson may be less enthusiastic investing the time in a test drive.

However, new car dealerships are much more amenable to taking a new model for a spin.

They have to play the long game a little more as they usually only sell one brand of vehicle on-site and people generally shop around before committing to such a large purchase.

Book an Appointment to Inspect a Vehicle

Online

When you are browsing stock online you will often see an option to book an appointment online.

It is generally expected that a vehicle inspection will include a test drive.

You can lock in a time that works with just a few clicks!

Phone

If you have found the vehicle through a third party sales platform then you will have the option to call directly, or submit an online enquiry.

Making an appointment on the phone is quick and easy, and also gives you the chance to ask any initial questions you have about the vehicle.

Prior to the Test Drive

Provide Driver’s Licence

Once you provide your driver’s license the dealership are likely to make a copy for their records.

And just in case there are any insurance issues that arise after the test drive.

Inspect the Exterior

Before even sitting in the driver’s seat, take a slow walk around the car.

Check the paintwork for scratches, the tyres for tread depth, and the panels for any inconsistencies that might indicate prior repairs.

This initial inspection can highlight things that you may want to refer to when negotiating a price later on.

Inspect the Interior

Take your time checking out the interior. People are often in a hurry to start the car and get moving, even without being hurried along by the salesperson.

Spend a few minutes checking the internal functions such as the entertainment system, air conditioning, power windows, and any other features the car has.

Also take note of any unusual wear and tear, such as sagging upholstery or dashboard cracks.

This can again be a point of negotiation later on.

Adjust Your Mirrors

Last of all, make sure you adjust your mirrors before driving off.

It can be easy to forget, but is important to be able to drive safely.  

Get the Most Out of the Test Drive

Driving Conditions

If possible, try to take your test drive through different traffic conditions.

You will learn more about the target vehicle by testing it out in tight suburban roads, as well as motorway conditions.

How does it handle in tight spaces? How well does it accelerate?

Are you game enough to also try a reverse park?

The more scenarios you can put the car through the more comfortable you can be that it suits your preferences.

Speeds

It can be important to get out onto a road where you can open the car up a bit.

Ever driven something that starts to shake at 100km/h? This is not something you want to learn later on when its too late!

Being able to do this depends on what roads are in the nearby area and you may need to discuss you route with the salesperson ahead of time to ensure you cover all you need.

Long Enough to Show Issues

If you only go for a 5 minute spin around the block you may not be getting the full experience.

A meaningful test drive should last at least 10 minutes.

Give yourself enough time to notice subtler issues like vibrations, braking performance, or lag in the transmission.

Conclusion

You can have some comfort that vehicles sold through a dealership will meet a reasonable mechanical standard, and that there are warranties on offer.

However, your test drive is as much about being comfortable in the vehicle and it being the right fit for you, as it is spotting issues.

The latter can just be a handy negotiation tool if you notice excessive wear and tear and think you can snag a bargain.

It is not a legal obligation and it is implied that both parties act in good faith. 

But how long is this expectation reasonable if you have not come back to complete the transaction? 

In this article, we will discuss how long a dealership is likely to hold a car for you with a deposit, and what to do if that deadline approaches before you are ready. 

What is a Holding Deposit

A holding deposit is a refundable amount taken by a dealership to temporarily take a vehicle off the market. 

This is to show that you intend to buy the vehicle and that you do not want them to offer it to anyone else. 

While any agreement to hold the car is non-binding, it is in both parties interest to uphold their end and follow through with the transaction. 

How Much is Required for a Deposit

Only a modest sum is required as a holding deposit when buying a used car. The exact amount can be negotiated between the buyer and the dealership. 

The amount must be substantial enough for the dealership to be satisfied of the intention to complete the transaction in the near future. 

Some customers volunteer a larger amount when they intend on paying a meaningful sum towards the purchase of the car. 

But this goes beyond the scope of a holding deposit. 

The balance is then settled through finance, which is why they need some additional time to finalise the loan.  

Holding Deposit vs Purchase Deposit

A holding deposit is essentially a reservation fee. It prevents the dealership from selling the car to someone else for a set period. 

If the funds are to form part of the eventual transaction then this is a purchase deposit.

In that scenario where a customer intends on paying a material amount towards the purchase price then they may not mind paying a larger deposit upfront. 

The balance may be coming from alternative sources, such as a car loan that is still be finalised.

The amount paid would be a purchase deposit rather than a holding deposit, which would be refunded later on. 

This is an important distinction as as purchase deposit could be forfeited if you later decide to withdraw from the purchase. 

A written agreement will be in place detailing the terms of a purchase agreement and the conditions for refund. 

Why Dealerships Ask for a Deposit

Dealerships request deposits to protect themselves from customers who may express interest but aren’t ready to commit. 

The deposit filters out casual enquiries and ensures genuine buyers have priority. 

For the customer, it also provides peace of mind, securing the vehicle while details are ironed out.

The last thing they want is to invest time inspecting a vehicle, organising funds and paperwork, only to have it sold out from underneath them. 

How Long a Dealership Will Typically Hold a Car

Most dealerships in Australia will typically hold a car for anywhere between 24 hours and 72 hours, depending on the context of discussions up until this point. 

Some may be comfortable with a week if there are very specific circumstances. 

The longer the time period, the more risk the dealership is taking on that you may change your mind and they have missed sales opportunities while waiting for you. 

The specifics will be influenced by the following factors. 

Dealership Policies

A larger franchise dealership is likely to operate under stricter guidelines than the small business operator. 

Both scenarios should have some room to negotiate, but the larger operation is likely to have a firm guideline placing guardrails on what is possible. 

A smaller operator could accommodate a longer hold period, but could be equally likely to just say no to any holding period.   

Market Demand

If market activity is high and cars to turning over quickly then an extended holding period is unlikely. 

In the midst of the pandemic, new cars were as rare as hens teeth, and demand was pushed into used cars out of necessity. 

Long holding periods were non-existent with buyers flooding the market. 

While things have normalised since then there are certain makes and models that remain in hot demand to this day. 

Paying a holding deposit is smart to lock in that high demand vehicle, but you also need to move fast to take ownership or it will not be around long. 

Size of Your Deposit

A $50 deposit and a non-responsive buyer is much more likely to be cast aside then someone who has committed a few hundred and is actively progressing to completion.

A larger deposit often shows stronger intent, giving you more leverage when negotiating hold times. 

Dealers are more inclined to give additional breathing room when a buyer demonstrates serious commitment.

Dealer Finance Application

If you have applied for finance through the dealership then they are actively working on your behalf to complete the sale. 

In this circumstance there is likely to be no time pressure at all as dealership is involved in the process and will be aware of the progress and likely conclusion. 

A dealer will also earn a commission from a lender when they secure an approval and settle the loan. So they are more likely to be flexible as long as you are doing your part to move the application forward. 

What If You Need More Time?

If you are not ready to complete the sale by the deadline discussed with the dealership you should have an immediate conversation to discuss next steps. 

If you become unresponsive and the dealership is left in the dark then expect the deposit to be refunded and the car placed back on the market. 

Given that a holding deposit is there to support an informal agreement you do not have any recourse if this happens. 

Your best chance of working out an extension is transparency and honest communication. You never know, the sales people may be able to help you resolve whatever the issue is. 

Especially if there is an issue completing the financing arrangements with a third party, or directly with a lender. 

This is an area where industry knowledge is worth its weight in gold! 

Our brokers get much more information throughout an application and can workshop solutions, whereas a direct consumer application often results in an approval or a rejection. No inbetween. 

Click below to get in touch with our finance team and explore your options. 

What Happens to my Deposit If I Withdraw?

If you decide to withdraw from the sale then your holding deposit will be refunded. 

Any reputable dealership will process this payment immediately and it should be in your account within 24 hours. 

We have heard of larger dealerships having a whole process that can take a week or two to process a refund. 

But you will get it back at the end of the day, unless it is a non-refundable purchase deposit – that comes with paperwork. 

Conclusion

A holding deposit is a tool you can use to show that you are a serious buyer and you just need to organise funds to complete the transaction. 

Most dealerships are happy to give you the time to do this so you are not frantically rushing under the threat of the car being sold elsewhere. 

However, it is a two way street and once your holding deposit has been accepted you should seek to complete the sale as quickly as possible. 

I am sure you are dying to drive away in your new wheels anyway!

The real question is how you position your ask, and why a dealership would give it to you. Are you asking for a discount just because? 

What happens if they just say no? 

In this article, we will cover some of the basics to help you prepare to negotiate a fair outcome on your next car.  

Preparing Before You Step Foot in the Dealership

A basic level of preparation can make a big difference when approaching pricing discussions. 

Even if you only look up the market guide for the price of your target vehicle then you have something to anchor to that isn’t set by the dealer. 

If you go in blind then the sticker price is all you have!  

Researching Current Market Values

There are a number of free online resources you can use to gauge the value of your target vehicle. 

• Redbook
• RACQ

You then just need to find the exact year, make, and model of the vehicle so you get the most accurate information. 

Using the Redbook data as an example, you will be presented with two price ranges: 

• Selling Price Range – Possible sale price for a regular sales transaction.
• Trade-in Price Range – What you could expect a dealership to offer you as an offset to buying a new vehicle if trading in. 

Whether the car is at the top or bottom of the range (or even outside) depends on the KM’s on the clock, and the condition of the vehicle. 

Given you are buying at a dealership you can expect the price guide to be towards the high end of the range unless the mileage is excessively high. 

This is due to the investment the dealership has made in refurbishing the vehicle prior to sale. All mechanical issues will have been addressed, a roadworthy certificate obtained, and the car registered. 

All much more than you could expect from a private seller who would likely do none of these to prepare for sale. 

Comparing online listings and dealership offers

Once you know the general pricing guides, it is worth spending some time looking at other online listings for the same type of vehicle. 

This will allow you to see how many are available nearby, and how they compare in terms of mileage, condition, and colour. 

You’ll be able to quickly see how things are priced in relation to the price guide discovered in the previous step. 

Armed with this knowledge you can now make a judgment on where your target vehicle sits relative to others on the market. 

Knowing the fair value of your trade-in

If you also plan to trade in you current vehicle then you can repeat the previous two steps and run some extra calculations. 

You will now also have an idea of the trade in value, and the net difference to aim for to complete the purchase of the new car. 

Effective Negotiation Strategies That Actually Work

Now that we are armed with some knowledge we can now look at how we use it to our advantage. 

The objective here is to get a fair deal for all parties and make sure that you don’t pay any more than you have to. 

These strategies are easy to implement and do not require any hardball attitudes, or intimidation. Just be reasonable, logical, and base your ask on facts.  

Create Space with a “Higher Power”

For many of you this will be your spouse, and if not you can refer to your parents, or any other person who is the “decision maker”. 

The purpose of this is to remove any pressure on you as the sole decision maker. 

It can be a powerful circuit breaker when a number is on the table and you say “just gotta check with the wife/husband/parent”. 

You get time to think, and if you have another ask to make you can do so and blame the person that isn’t on-site. 

Start Lower Than Your Maximum Budget

This is negotiation 101 – never start with your best offer! 

However, if you throw out an unreasonably low number with no justification then you may not be considered a serious buyer and the conversation will end. 

So, you are going to name a figure that is justified based on the condition of the vehicle, your pricing ranges, and what you have valued it at. 

It is then up to the dealer to challenge your thinking – and even if they do, they will understand that you have done your homework. 

Using Competing Offers

This is harder to do with used cars as you can only buy what is available in the market. 

If you are looking for a specific vehicle then sometimes there may only be one or two available within driving distance at any one time. 

Buying a brand new car makes it much easier to compare deals on offer between dealerships. There will be plenty offering exactly the same thing, so why should you buy their car if its not the best deal? 

What You Can Negotiate For at the Dealership

Lower Purchase Price 

So far we have focussed entirely on price. Every dollar you can get off the buy price is money that stays in your pocket!  

The benefits are compounded if you are buying the car on finance. The less you borrow, the less principal that you will need to pay interest against. 

Getting added extras without extra cost

Discounting is driven by a number of factors behind the scenes at a dealership. Sometimes there is just no room to move! 

However, there are other things that a dealer could throw in as a sweetener to get a deal done. 

Packages that include extended warranties, roadside assistance, tinted windows, or even a full tank of fuel can all be on the table. 

These extras have genuine value and are worth pursuing.

Best Time to Negotiate a Used Car

Dealerships are run by salesmen – which usually means sales targets bound by deadlines. 

You can use this to your advantage if you find the right salesman at the right time who needs that one extra deal to meet their sales targets for the period. 

Of course, you cannot know what is going on behind the scenes. But you can tease fate out a little by targeting these windows of time: 

• End of Month: If you get unusually eager service from a salesperson on the 28th of the month then something might be on the line for them. Take advantage! 
• End of Financial Year: This is the big one! Sales events and time pressure are a great recipe to land a deal! 
• Quiet Weekdays: Weekends are a hype of activity at some dealerships. Monday morning not so much. You become the scarce commodity on a quiet day and may be able to drive a harder bargain. 

What Not to Do When Negotiating

Avoiding Aggressive or Hostile Tactics

You know the type – give me what I want or I’m walking away!! 

The reality is that most sales people will shrug their shoulders and say ok. 

Not only is in unpleasant to deal with, but there is no reason to accommodate a difficult costumer who is not interested in a deal that works for both parties. 

While they may like to puff their chest out and brag about the amazing deal they got this one time, if there is no money in the sale for a dealership they just won’t make it. 

Being an Emotional Buyer

There are thousands od used cars out there! You could even find multiple options in the one lot. 

Don’t get too attached to a single car before a deal is done. Stick to your research and any variations from that should be well justified in facts about the vehicle.

Conclusion

Most people will only buy a car once every 3-7 years. So few will be well practiced in the negotiation process. 

The good news is that you just don’t have to be! 

All you need to know is what the car should cost according to the market. If you are in that range, and don’t have any major detractors (like very high KMs) then you know you have a fair price. 

If you negotiate hard then you could get a few bucks off, and some free floor mats.

The broker will have access to a large number of lenders, including some that will specialise in bad credit car loans. 

So yes, it is possible to get a loan through a dealership with bad credit. However, they do not lend to everyone! 

In this article, how to qualify for finance if you have had credit problems in the past. 

What is Bad Credit in Australia?

Bad credit is usually associated with someone who has failed to repay debts in the past. This usually means that they are a higher risk of missing repayments in the future.

However, there are multiple ways that someone could be deemed high risk even if they have not missed a repayment on a loan. 

Low Credit Score

A credit score is determined by the summation of activity on your credit file. 

Positive events like applying for a mortgage, being approved, and successfully making every repayment would boost your score. 

Low quality activity like payday loan applications, missed loan repayments, or arrears on utility bills can all detract from your score. 

Whether a score is good or bad is determined be each lender’s credit policies and is often the first eligibility requirement to meet. 

If you are below their cutoff then you will often be rejected without further assessment. 

This is why a broker will run a credit check early in your application when applying through the dealership. 

It will allow them to help you find the lender who will consider your application.

Limited Credit History

For some lenders, no activity is the next worst thing to bad history. 

It takes time to build a reliable track record of repaying debt, which in turns will build a strong credit score. 

Those who are young and have not had a loan before, or those who are new to the country, can often be categorised as high risk. Even though they have done nothing wrong. 

While this may sound unfair, remember that a credit score is a predictor of future risk. If you have no history to measure, then the uncertainty equals higher risk for the lender. 

Poor Financial Behaviours

Outside of a credit file, there are also a number of red flags that could place you in a higher risk category. 

These are only visible on your bank statements and lenders tend to only look there if they have a reason to (such as a low credit score). 

If your finances are improving this can be a big win for you, but if not then there is nowhere to hide. 

If you are reversing on direct debit payments, incurring bank fees, and going into a negative account balance, then this is a sign that you may be struggling to manage your budget. 

Excessive repayments to Buy Now, Pay Later services, or Wage Advance apps, could also be a big red flag that is only visible on your bank statements. 

Causes of a Bad Credit History

The most common reasons that people have bad credit is due to either missed repayments on previous loans or utility expenses or frequently using loan products that could indicate someone is struggling financially. 

Missing Debt Repayments

If you miss a loan repayment and fall into arrears this will be visible on your credit file very quickly. 

Your Comprehensive Credit Report could have a recorded missed payment is a little as 14 days!

And that history of arrears will be visible even after you make up the payment. But there are multiple levels to how serious missed payment can be: 

• Missed payment: Make it up in under 14 days and no harm done. 
• Payment Default: Can be listed after 60 days and will stay on your credit file for five years. 
• Court Judgment: A lender has taken you to court and obtained a judgment to attempt to recover the money from you through various enforcement methods.
• Bankruptcy: While there are many forms of bankruptcy, for the purpose of this article just know its bad for your credit. 

Use of Short-Term Loan Products

Regular applications for short term loan products can be a sign that you are not managing your household budget well. 

This is a big red flag for lenders! 

Payday loans are now more commonly referred to as Small Amount Credit Contracts in Australia, or SACCs. 

If you have used these more than once in the last 12-24 months then some lenders will not touch you. 

However, the broker at the dealership will be able to find you some options if the frequency is below the various thresholds and you have eased up in the last six months. 

Will Bad Credit Stop You Getting a Loan at a Dealership?

As you will have learned so far, there are so many variations to a credit score, credit history, and lender policies across the industry that a broker can only determine this on a case by case basis. 

For many the answer is yes!

However, a no would always be an accompanied with a plan of action and a timeline for when you may qualify again. 

In most cases you can tidy up some basic behaviours and be eligible in just a few months. 

Our broker team are experts in bad credit car loans and if you can qualify for a loan we will find the right place for you. 

To get in touch with the team click the button below to get started. 

How to Improve Your Loan Application

Lenders who consider those with a poor credit history will also consider other elements of your financial profile. 

If you have enough other positive factors, it can overcome negatives evident on your credit file. 

• Stability of income.
• Sound expense management.
• Surplus funds at the end of each pay period.
• Accrued savings in a bank account.  
• Improved recent repayment history on other debts
• Ensure all current loans are up to date
• Do not use Wage Advance products
• Minimise use of BNPL (avoid it if possible)
• Ensure no payment reversals on your bank account

It all comes back to demonstrating that you can manage your finances well and are capable of taking on extra repayments comfortably.

Conclusion

If you know that you have had problems repaying debt in the past that may have impacted your credit file then you should look for a pre-approval before you arrive at the dealership. 

Our team can get you started so you know where you stand before you have your heart set on a new vehicle. 

However, an application can be done same day at the dealership once you have found your next set of wheels. 

You may be surprised how quickly we can turn around your application, even if you have bad credit.

But do you need to bring a folder full of documents to apply for your car loan? 

These days, the majority of what you need can be sourced and submitted online! Your banking app, copies of your ID, its all very easy now that everything is online. 

In this article, we will summarise all that you need to get a car loan at the dealership. There is a lot in there that could be required, but most is not depending on your specific application. 

How Dealership Finance Works

Once you have selected the vehicle you would like to buy a dealership will have the option to apply for finance to facilitate the transaction. 

This can be organised in a few different ways: 

1. An on-site business manager who manages the finance applications. 
2. An on-site finance broker who is a specialist in auto finance (this is the best option!). 
3. You could be referred to a third party finance broker the dealership has a relationship with. 

We always encourage you to deal with an expert finance broker as opposed to a Business Manager. 

They will have access to more lenders, will have broader working relationships with those lenders, and deeper finance knowledge to help you get the best result. 

Once your application is prepared, and you are placed with the most suitable lender for your circumstances, then the final loan assessment takes place with the lender. 

What Do I Need to Apply for Finance at the Dealership 

At Gusto Auto, we have our broker team from Gusto Finance in the office and can complete a face to face application at any time. 

You will still need to provide some documents but the majority can now be submitted digitally. This makes it quick and easy to package up and send to a lender for a speedy result. 

Below I have summarised the types of documents you may need to provide. Our broker will give you a more specific list when preparing your application – usually you won’t need all of these. 

If you would like to start a conversation with the team before coming on-site then click the button below to start the process of pre-approval. 

This will get you into your new car faster! 

Proof of ID

To confirm your identity, lenders require government-issued documents. This ensures that you’re a legitimate applicant and not attempting any type of fraud of identity theft. 

The latter may sound silly, but scams are increasing at a frightening speed. So it is a necessary inconvenience to ensure that you do not become the victim of such a scheme. 

There are two categories of identification typically required to verify your identity, primary and secondary. 

Both carry different weights to satisfy the minimum requirements (usually 100 points of ID) and each lender may have different policies for what is acceptable.  

Primary:

• Driver’s license
• Passport
• Birth Certificate
• Citizenship Certificate
• Proof of Age Card
• Immigration Card

Secondary:

• Medicare Card 
• Bank Card
• Utility Bill
• Rates Notice
• Student Card
• Employment Document
• Overseas ID

Proof of Income

Your income is the most important factor when determining if you have the capacity to repay the loan. 

Generally speaking, you have two categories of applicants here. Those who earn an income, and those who run a business. 

The requirements for each will be different. 

If you’re employed, recent payslips (usually the last two to three) can be enough.

If your income fluctuates due to bonuses, overtime, or any other type of irregular earnings then you may need to show your annual tax assessment for up to two years. 

These are available online via the ATO website.

If you also get income from Centrelink then an income statement to evidence this will be required. 

In some cases a lender may want to look closer at your finances. For example, if you have a poor credit history or earn an inconsistent income. 

A lender may request 90 days’ worth of bank statements. This will help verify both your income and expenses (which we will get to shortly). 

These can be submitted electronically and the dealership can send an SMS to your phone to facilitate the process. 

Quick and easy! But usually not required. 

ABN holders have the advantage of being eligible for a low-doc loan. The documentation requirements are very low for this category of loan. 

We can complete an application with just an ABN registration as long as its over six months. A GST registration can also help as this will show the business turnover exceed the threshold. 

Thats it! 

For a full-doc application then you could also submit some, or all, of the following:

• Business Activity Statements (BAS)
• Profit and loss statements
• A letter from an accountant
• Business bank statements
• Inventory of other loans and assets of the business

Proof of Address

There are plenty of ways to prove your residential address, so this should be a simple one:

• Utility bills
• Rental agreement
• Bank statement
• Council rate notice 

These documents should show your name and current address.

So if you have moved house recently make sure you update these sources as early as possible to prevent delays in the application process while sitting at the dealership. 

Credit History and Credit Score

Our broker team will always run a soft credit check at the start of the process so we can quickly understand what lenders will be suitable for your circumstances. 

These soft checks do not affect your credit score at all and an official enquiry will not be visible until you make a formal application to the lender,. 

Your credit history tells lenders how you’ve managed debts in the past and is one of the most critical factors in assessing you as a credit risk. 

Existing Financial Obligations

Transparency with your existing loans and credit card debts is crucial to ensure a smooth loan application at the dealership. 

Lenders will already see evidence of these from your credit file and bank statement data (if applicable). But they may also need to verify the data provided. 

They could request additional information on: 

• Personal Loans: To verify repayments, remaining balance, and loan term.
• Credit Cards: To verify your minimum repayments and credit limit.

This information will help the lender assess how much of your income is left over to make repayments on a new car loan. 

If you have other ongoing commitments then also be prepared to disclose these and provide documentation to show the size and duration of your required payments:

• A tax debt to the ATO
• Centrelink debt
• Child support payments
• Unpaid bills that are on a payment plan

Accurately declaring a list of dependents is also an important one. 

Vehicle Details

Given that you have already selected the car you are trying to finance, the dealership will take care of this step. 

The documentation is required to ensure the car meets the lenders criteria for what can be held as security over the loan. This ensures you are getting the best possible deal on the finance. 

Proof of Deposit or Trade-in

The dealership can again take care of this as they will have either provided a receipt for a deposit, or given you a trade-in value that will form part of the transaction. 

So nothing to do here when buying through a dealership. But it does make up an important part of your loan application. 

Proof of Car Insurance

This is only necessary when the lender includes insurance as a condition of the loan approval. 

You may need to show that you have suitable coverage organised before the loan will be settled and you can drive away in your new car. 

Residency and Visa Status

If you are new to Australia, or are here temporarily, then it will be more difficult to get a car loan. However, there are a number of lenders who will accommodate a range of scenarios. 

Those who are not Australian citizens will need to provide:

• Visa details – the class of visa may determine eligibility
• Length of stay
• Residency proof
• Employment documentation

Permanent residents often face fewer restrictions than temporary visa holders for obvious reasons. If you are on a visa then get in touch with our brokers to discuss your options.

Conclusion

While the list of requirements above are extensive, not all will apply to each car loan application. 

If you are dealing with an expert finance broker they will ensure that the burden is minimised as much as possible, and only what is necessary is provided to the lender. 

All documents can be provided electronically which makes it much more convenient. You can usually complete this in the dealership office if need be. 

This also ensure that approval can be obtained as quickly as possible.

Prior to settlement, all contract signing can also be done electronically. Which makes it much easier to complete all requirements on-site when organising dealer finance.