Moving across the ditch permanently? Though Australia’s capital cities are pretty well covered with public transport, you really need a set of wheels to get around effectively. Doing the weekly grocery shop catching trains and buses isn’t any fun! That and the cost of taxis or Ubers can add up pretty quickly.
Even though you can hit the ground running when it comes to work in Australia, it’s not the same with loans and finance. Find below the process of car ownership in Australia from whoa to go. That means a smooth experience, no hassles, and you get to explore the land Down Under quicker than you can say g’day, mate!
First things first – can you even legally drive in Australia? Yes – you can use your NZ licence on Aussie roads for up to three months before you need to transfer it over to an Australian licence. Each state and territory has its own motoring authority, so you need to consult with them when it comes to transferring your licence over. You can click here for all the relevant links to the authorities.
You will need to prove your identity with a passport or birth certificate as well as a supplementary document such as a bank statement, Medicare card, or utility bill (as long as they are within 12 months of issue.) You must show ORIGINAL documents; copies and certified copies are not accepted. Costs of transferring your licence vary from state to state but rarely exceed $100AUD or so.
If you come to Australia as a New Zealand citizen, you will be given a Special Category Visa (SCV) Subclass 444. This grants you the right to work, study, or visit Australia for as long as you remain a citizen of New Zealand. NZ citizens who have been living in Australia for more than four years are now (as of 1 July 2023) eligible to apply directly for Australian citizenship. You will not have to apply for permanent residency.
Most banks and lenders will have some kind of eligibility requirements before you apply for a loan. This may include being over the age of 18, earning a certain amount of income, and citizenship or permanent residency.
On the whole, there are no restrictions or special requirements for Kiwis to apply for a car loan in Australia.
However, if you are a relatively new arrival in Australia on an SCV, a lender may view your application as a non-resident. This may bring with it caps on how much you can borrow or have stricter lending criteria such as a higher income or excellent Australian credit score.
Some lenders may take your direct pathway to citizenship into consideration as some lenders may reject applications by visa holders with little time left on their residency permit.
You will need proof of identity, proof of residence, and proof of income – the more information you can provide, the better.
Also, note that lenders may only look at your application once you have completed a typical three-month probationary period at your current employer.
When you are shopping around for cars, you may wonder if buying new or used is the best option considering your budget.
New cars have a higher ticket price but will be more affordable to run and maintain; the opposite is true with used cars. You can find a diamond in the rough with used cars on the private market, but it takes a lot of “tyre kicking”, test-driving, and inspections to ensure you don’t buy a lemon. You also need to check if your used car isn’t stolen or has money owing by using the Personal Property Securities Register. Some lenders are more reluctant to finance older vehicles because of the risks involved. If they do approve your loan, it may come with added interest compared with newer, dealer-bought cars.
Before you go to your bank for a car loan, you should consider finance options from many different sources such as specialist car lenders and car loan brokers. You could save a lot of money on interest if you shop around for lower rates or loans with lower fees.
Car loan brokers may also allow car loan pre-approval, which gives you the maximum amount you can borrow. You then call upon those funds when you find the car you wish to purchase. You usually get a month or two to find it – and it’s a great negotiation tool as dealers will have to match your price to get a sale – or you walk away!
When you buy a car in Australia you will usually need to pay for comprehensive car insurance as part of your loan agreement. You will also have to pay for Compulsory Third Party insurance, either as part of compulsory registration or separately (New South Wales has a private market for CTP.) Remember to factor these into your repayment and other costs such as fuel and maintenance.
With all that in mind, you have more than enough knowledge to take on Aussie car dealers and brokers and get a fantastic deal on four wheels!
If you want more information about transferring your licence, documentation needed, costs, state-by-state rules and more, have a read of my driving and licences in Australia post.
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