Car finance for refugees in New Zealand
Being a refugee is not a reason a lender can use to turn you down, and quota refugees are granted permanent residence on arrival. The harder part is usually practical: a new credit file with little on it, income that is only just starting, and a licence that may still be a learner or restricted one. Nobody can promise approval, and each lender decides case by case.
The short answer
If you came to New Zealand as a refugee, you can apply for car finance, and a lender looks at the same things it looks at for anybody. What it sees can still be different. You may have been here a short time, so there is little or nothing on your NZ credit file. Your job may be new. Your licence may be a learner or a restricted one. Each of these is a practical question a lender can ask, and none is about where you came from.
This page explains what lenders check, how your status fits, what to prepare, and what to be careful about. It is general information, not advice about your own case. If you have been in New Zealand only a short time, the page on car finance for new migrants covers some overlapping ground.
Your status and what lenders ask
People come to New Zealand with refugee backgrounds in different ways, and the status differs.
- Quota refugees. Immigration New Zealand (INZ) says quota refugees are granted permanent residence status. New Zealand takes 1,500 refugees a year across the Refugee Quota Programme and the community sponsorship programme. They spend their first five weeks at Te Āhuru Mōwai o Aotearoa, the Māngere Refugee Resettlement Centre, where the programme includes English language education, health assessments and settlement planning. Help continues for up to two years.
- Recognised refugees and protected persons. People who claimed refugee or protection status in New Zealand and were recognised can remain here. Check INZ for the visa that applies to you and the current rules.
- People still waiting on a claim. They hold different visas, and a lender may find a temporary visa harder to place. See car finance for temporary visa holders.
Lenders do not usually need your whole history. They need to know your right to live and work here, how long your visa runs if it is not residence, and that you can be contacted. Take your documents with you, and ask the lender what it accepts.
Discrimination and your rights
Lenders cannot lawfully treat you worse because of your race, colour, ethnic or national origins or religious belief. The Human Rights Act covers the provision of goods and services, which includes credit and loans. A lender can still decline you for a lawful reason, such as affordability, but you can ask what the reason is, and ask it in writing.
If you think a lender treated you unfairly because of who you are, you can contact the Human Rights Commission. A Community Law Centre can also give free initial advice.
What a lender actually looks at
Under the Credit Contracts and Consumer Finance Act, a lender must make reasonable inquiries so it is satisfied you can repay without substantial hardship. That means looking at four things.
Income
How much, from where, and for how long. A recent start in a job is not a barrier by itself, but some lenders want to see a few payslips. Casual or seasonal work needs bank statements that show a pattern. Some lenders count benefit income and others do not, and a benefit that already goes on rent, food and power leaves little room for a loan. See lenders that accept benefit income.
Spending and other debts
A lender asks about rent, food, remittances, phone, insurance and any debts. If you send money to family overseas, that is a regular cost, so include it. Leaving it out does not help, because it shows up on bank statements.
Credit history
If you arrived recently, there will be little on your NZ file. That is a thin file, not a bad one. Lenders deal with a thin file in different ways. Some decline for lack of information. Others look at income, deposit and the car instead. Car finance with no NZ credit history explains this in detail, and building a credit history as a migrant covers what starts a file.
The three credit reporting companies are Centrix, Equifax and Experian (formerly illion). You can ask each for a free copy of your report. It is worth doing, because anything wrong on it, such as a phone contract you did not take out, is easier to fix before you apply.
Licence and the car
Many lenders want to know the driver can legally drive the car. If you hold a learner or restricted licence, car finance on a restricted licence explains the conditions. The car is the security for the loan, so the lender also looks at its age, price and condition.
A no-interest option to know about
Good Shepherd NZ runs Good Loans, which are no-interest, fee-free loans for people on limited incomes. A car is one of the things they can be used for: up to $7,000 for a car, or you can add savings to buy a car worth up to $10,000. The money is paid direct to the supplier, not to you as cash.
There are conditions. Good Shepherd says you are not eligible if Work and Income can help with the purchase, if you receive Single Jobseeker Support, or if your only income is self-employment. There is also an income limit, and you work through a budget and an affordability check with a coach, so it takes time. Its loans page does not set out visa requirements, so call and ask whether your status fits. Their number is on the loans page.
MoneyTalks, the free financial helpline, can also help you work out a budget before you decide on a car. See financial mentors.
An illustrative example
The numbers below are made up to show the method. They are not real offers.
Say your household takes home $1,000 a week. You pay $400 rent, $150 for food, $50 phone and power, $60 for school and transport costs, and $40 to family overseas. That is $700, leaving $300.
| Weekly | |
|---|---|
| Left after living costs | $300 |
| Fuel, insurance, registration, servicing (illustrative) | $110 |
| Left for the loan repayment | $190 |
| Keep as a buffer for surprises | $50 |
| Realistic repayment | $140 |
So the car loan has to fit inside about $140 a week. The repayment calculator shows what that means in loan size at different terms, and how much can I borrow explains what lenders look at. A cheaper, older car with a smaller loan is often more realistic than a newer one.
Steps to take
- Get your documents together. Photo ID, visa or residence evidence, proof of address, payslips, bank statements and your licence. What you need to apply has the full list.
- Check your credit reports. Even with a thin file, make sure it is correct.
- Open a NZ bank account and use it. Regular income and tidy statements help a lender see how you manage money.
- Work out your weekly budget. Include the running costs of a car, which add up.
- Think about the licence first. If you are on a learner licence, getting to a restricted licence may open more options.
- Save a deposit if you can. Even a small one reduces the loan. How much deposit for a car loan explains how it helps.
- Apply once. A soft credit check lets a lender see an indication without a hard enquiry on your file.
- Ask for help reading the contract. A settlement support worker, a Community Law Centre or a Citizens Advice Bureau can go through it with you.
Red flags
- Anyone promising approval before they see your income and documents.
- A dealer who will not show you the rate, the fees and the total you will repay. Ask for them in writing.
- Pressure to sign quickly, or to sign a contract you cannot read. Take it away and get it checked.
- A lender not on the Financial Service Providers Register. Unregistered lenders cannot charge interest or default fees.
- A very high rate for a very cheap car. The total you repay can end up far above what the car is worth, so check it.
- Anyone asking you to put a loan in your name for somebody else. You would be the one who owes it.
- A car with money still owing on it. Do a PPSR check.
How Fair Finance helps
Fair Finance is a referral service, not a lender. One application and one soft credit check go to a panel of approved New Zealand lenders, so you can see options without a hard check at each one. The lender decides case by case. We are paid by the lender only if a loan settles, and that never changes your rate. When your documents are ready, the quick check is the place to start.
Checklist
- Photo ID and visa or residence evidence
- Proof of address in New Zealand
- Payslips and bank statements
- Licence type and conditions understood
- Free credit reports checked
- Weekly budget with running costs
- Deposit set aside, if possible
- Rate, fees and total repayment in writing
- Contract checked by someone you trust
- PPSR check done
General information only, not financial advice or immigration advice. Rules change, so check the official pages below.
Sources
Common questions
Can a refugee get a car loan in NZ?
Yes, it is possible. Lenders look at your income, your expenses, your residency or visa, your licence and your credit file, the same as for anyone else. A recent arrival has a thin credit file, which makes some lenders cautious. Nobody can promise approval, and each lender decides case by case.
Does my refugee status count against me?
It should not. The Human Rights Act makes it unlawful to discriminate in providing goods and services on grounds that include race, colour, ethnic or national origins and religious belief. A lender can still decline you for reasons such as income or affordability, so ask what the reason was.
What documents do I need for car finance as a former refugee?
Usually photo ID, your visa or residence evidence, proof of address, proof of income such as payslips, and bank statements. If you hold a restricted or learner licence, bring that too. Lenders vary, so ask for their list before you apply.
Can I use a benefit as income for a car loan?
Some lenders count benefit income and others do not. Lenders must check the repayments are affordable without substantial hardship, so a benefit that already covers essentials may leave little room for a loan. See the page on benefits and car loans for more.
Is there a no-interest loan to buy a car?
Good Shepherd NZ offers no-interest, fee-free Good Loans for people on limited incomes, and a car is one of the things they can be used for, up to $7,000 for a car. There are conditions, the loan is paid to the supplier, and applications take time. Ask them directly whether your visa or status fits.
Do I need a New Zealand licence to get car finance?
Many lenders want to see that you can legally drive the car. A learner licence on its own can make it hard to place a loan, and a restricted licence has conditions you should understand. Free driver training programmes for former refugees exist in some regions, so ask your settlement support person.
See your repayments, then get a fair rate.
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