Car finance on a benefit: every option, cheapest first
If you're on Jobseeker Support, Supported Living Payment, Sole Parent Support or another benefit, a car loan is possible, but it shouldn't be your first stop. Help from Work and Income and no-interest community loans cost far less than any commercial loan. This hub takes you through every option in the order that costs you least.
The order to check things in
- Work and Income. An Advance Payment of Benefit or a Recoverable Assistance Payment can sometimes cover an essential vehicle cost, such as car repairs. You repay it from your benefit, so check what you qualify for here before any commercial loan. Details at workandincome.govt.nz.
- No-interest and low-interest community loans. Good Shepherd NZ and Ngā Tangata Microfinance lend for essentials, including cars, to people on low incomes.
- A lender that accepts benefit income. Some lenders on our panel include benefit income in their affordability check. They will still check your credit and your budget, as the CCCFA requires.
What lenders look at when your income is a benefit
- How long you've been on it. A benefit that has been stable for six months or more reads better than a new one.
- What's left each week. Lenders read your bank statements to see rent, bills and other debts against what comes in. Accommodation Supplement and Working for Families count as income when they're regular.
- Your credit file. Recent unpaid defaults weigh more than old paid ones.
- The car. A modest, reliable car with a small repayment is far easier to approve than a stretch.
Guides for your situation
- Car finance on a benefit or WINZ: every option
- Beneficiary car finance: how lenders assess it
- On a benefit with part-time work
- WINZ car finance and credit checks, explained
- Bad credit car finance on a benefit in NZ
- Car finance after bankruptcy when your income is a benefit
- Car finance on Jobseeker Support in NZ
- Car finance on Sole Parent Support for solo parents in NZ
- Car finance on Supported Living Payment in NZ
- Car finance when unemployed in NZ
- Does a benefit count as income for a car loan?
- How much can you borrow on a benefit in NZ?
- How to buy a car on a benefit in NZ
- Which lenders consider benefit income in NZ?
- No deposit car finance on a benefit in NZ
- Will WINZ help me buy a car?
- Car finance when your income includes Working for Families
If you're struggling with money right now
A free financial mentor can help you sort a budget and talk to creditors before you take on a car loan. Call MoneyTalks on 0800 345 123. If you already have a car loan you can't keep up with, read struggling to pay your car loan for your hardship rights.
Common questions
Can I get car finance on a benefit in NZ?
Some lenders accept benefit income when they assess affordability, especially when the benefit has been steady for a while and the car and repayment are modest. It's assessed case by case and nobody can promise approval. Check the Work and Income options first.
Will Work and Income help me buy a car?
Work and Income can sometimes give an Advance Payment of Benefit or a Recoverable Assistance Payment for car repairs, when you need the car for work or medical appointments. Its published help does not cover buying a car. You repay it from your benefit, and what you qualify for depends on your circumstances. Ask your case manager.
Are there no-interest car loans for people on a benefit?
Yes. Good Shepherd NZ runs no-interest and low-interest loans for essential items, including cars, for people on lower incomes, through community providers. Ngā Tangata Microfinance offers similar help. Waiting lists and limits apply.
See your repayments, then get a fair rate.
One application, one soft credit check, no obligation. We match you to the lender most likely to give you a fair go.