What we see in NZ bad-credit car loan applications
We looked at 1,330 car finance enquiries made between 22 July and 9 November 2026. Seven in ten people rated their own credit as low, the median credit score was 336 out of 1,000, and most wanted less than $15,000. The most common reason an application went no further was defaults on the credit file.
Key findings
From 1,330 car finance enquiries made between 22 July and 9 November 2026:
- 70% rated their own credit as low. Only 9% called it good or better.
- The median credit score was 336 out of 1,000. 87% of the scores we saw were under 500.
- 54% wanted to borrow less than $15,000. Most people are after a modest, reliable car, not a new one.
- Defaults were the top reason an application stopped, named in 51% of cases with a reason noted. Unaffordable repayments (20%) and court judgements (18%) came next.
- About one in five had benefit income, and 44% of those were on Sole Parent Support.
- 65% already had other debts, most often a personal or finance-company loan (41%), buy now pay later (21%) or an existing car loan (21%).
The rest of this report breaks each of these down, explains how we counted, and finishes with what the numbers mean if you are about to apply. If you want to know where you stand first, our free eligibility check uses a soft enquiry that does not mark your credit file.
Who this data covers
Fair Finance is a car finance referral service, not a lender. People tell us about their situation, and we look at whether a lender on our panel could consider them. This report counts every real enquiry that came through Fair Finance and the other car finance referral sites run by the same team over about 16 weeks.
| Month (2026) | Enquiries |
|---|---|
| July (from the 22nd) | 105 |
| August | 428 |
| September | 395 |
| October | 300 |
| November (to the 9th) | 102 |
| Total | 1,330 |
Not everyone answered every question. A quick enquiry asks a few things, and a full application asks many more, so each table below shows how many people it is based on. These are people who chose to ask about car finance, mostly people who already expect a hard time getting it. They are not a sample of every New Zealand driver.
How people rate their own credit
Before any check is run, we ask people how they would describe their credit. Of the 550 who answered:
| Self-rated credit | Share |
|---|---|
| Low | 70% |
| Average | 16% |
| Good or better | 9% |
| Don’t know | 5% |
Most people already know their file has problems. That matters, because it means the question is rarely “is my credit bad?” and usually “how bad, and what can I do about it?”. You can see your own file for free from each of the credit bureaus, and our guide to what credit score you need for car finance explains what the number means.
What the credit scores actually look like
Where a credit score was recorded (564 enquiries), the scores sat on the 0 to 1,000 scale that New Zealand bureaus use:
- Median score: 336
- Middle half of scores: between 249 and 434
- Under 500: 87%
- Under 300: 40%
A score this low usually reflects something specific on the file: a default, a judgement, a run of late payments or a lot of recent credit enquiries. The score itself does not stop a loan. The reasons behind it do, which is why the next section matters more than the number.
Why applications stopped
Of the 1,330 enquiries, 743 (56%) did not go further after review. For 547 of those, a reason was written down. Many had more than one, so the shares below add up to more than 100%.
| Reason noted | Share of stopped applications with a reason |
|---|---|
| Defaults on the credit file | 51% |
| Income too low for the repayment | 20% |
| Court judgements | 18% |
| Wanted a personal loan, not a car loan | 14% |
| Payments in arrears or hardship | 13% |
| Credit score too low | 9% |
| Licence (learner, none or disqualified) | 7% |
Bankruptcy and visa issues each came up fewer than 10 times, so we have not shown them.
Three things stand out. Defaults are by far the biggest single barrier, and Equifax says a default stays on your file for five years from the date it was listed, even after it is paid. Affordability is second, which is the responsible lending rules doing their job: lenders must check that a repayment fits your budget. And 14% of the stopped applications were for a personal loan rather than a car, which we don’t arrange.
If you have defaults, read car finance with defaults before you apply anywhere. If the problem is a court judgement, car finance with a court judgment covers what lenders look for.
How much people want to borrow
Of the 512 people who chose a loan amount:
| Loan amount | Share |
|---|---|
| Under $15,000 | 54% |
| $15,000 to $25,000 | 24% |
| $25,000 to $40,000 | 12% |
| $40,000 or more | 3% |
| As much as I can get | 6% |
More than three quarters wanted under $25,000. That fits the rest of the picture: people with damaged credit are mostly trying to replace an unreliable car or get one for work, not upgrade. A smaller loan is also easier for a lender to fit into a tight budget. Our repayment calculator shows what different amounts cost each week.
Income types
Of the 552 people who told us where their income comes from:
| Main income | Share |
|---|---|
| Wages or salary | 75% |
| Wages plus a benefit | 11% |
| Benefit only | 10% |
Self-employed and casual or contract workers each made up fewer than 10 people in this group. Of the 326 people who completed a full application, 19% received Working for Families.
Among the 89 people who named their benefit (some named more than one):
| Benefit | Share |
|---|---|
| Sole Parent Support | 44% |
| Supported Living Payment | 21% |
| Jobseeker Support | 17% |
| Child Disability Allowance | 15% |
| Other | 27% |
Work and Income can sometimes help with transport costs for work, so it is worth asking before you borrow. See car finance on a benefit for how lenders treat benefit income.
Visas and licences
Of 413 people who stated their residency, 96% were NZ citizens or residents and 4% were on a work visa.
Licences matter more than most people expect. Of the 388 who told us their licence:
| Licence | Share |
|---|---|
| Full | 66% |
| Restricted | 17% |
| Learner | 16% |
One in three was not yet on a full licence. Some lenders will still consider a restricted licence, but a learner licence makes it much harder, and 7% of stopped applications named the licence as a reason.
Home, family and existing debt
Of the 326 people who completed a full application:
- 62% rent, 17% live with family and 17% board. Fewer than 10 owned their home.
- 56% have children living with them, and 16% have three or more.
- 65% already have other debts.
- The median time in their current job was 27 months, and 18% had been in their job less than six months.
Among the 216 people who listed their debts:
| Existing debt | Share with at least one |
|---|---|
| Personal or finance-company loan | 41% |
| Buy now pay later | 21% |
| Existing car loan | 21% |
| Credit card or store card | 14% |
| Phone, power or other bills | 6% |
| IRD or fines | 5% |
Buy now pay later shows up for one in five people with debts. It is easy to forget, but lenders see it and count the repayments.
Where people are
Of the 505 enquiries with a usable address:
| Region | Share |
|---|---|
| Auckland | 39% |
| Waikato | 9% |
| Canterbury | 9% |
| Bay of Plenty | 7% |
| Wellington region | 5% |
| Hawke’s Bay | 4% |
| Manawatū-Whanganui | 4% |
| Northland | 4% |
| Otago and Southland | 2% |
| Other or unclear | 15% |
Gisborne and Nelson, Marlborough and the West Coast each had fewer than 10 and sit in “Other or unclear”.
What this means if you are about to apply
- Get your own credit file first. It is free from each bureau. Look for defaults, judgements and their dates, because they were behind most stopped applications.
- Borrow less than you think. Most people asked for under $15,000. A smaller loan is easier to fit into the budget a lender has to check.
- List every debt, including buy now pay later. Lenders will see it anyway, and leaving it out costs trust.
- Sort your licence. A restricted licence is workable for some lenders. A learner licence often is not.
- Avoid lots of hard credit checks. Each one is recorded on your file. Start with a soft check, like our eligibility check, which does not mark your file.
- Look at cheaper help too. Good Shepherd’s Good Loans and free budgeting services such as MoneyTalks can help some people more than a car loan can.
Lenders decide case by case and nobody can promise approval. But knowing what usually stops an application means you can fix what is fixable before you apply. When you are ready, check your options.
How we counted
- Data: car finance enquiries made between 22 July and 9 November 2026 through Fair Finance and the other car finance referral sites run by the same team. Test entries and duplicates were removed, leaving 1,330.
- Privacy: we only report totals and percentages. No names, contact details, addresses or anything else that could identify a person appear here. Any group smaller than 10 people is suppressed and not shown.
- Different bases: not every question was asked of every person, so each table states how many people it covers. Percentages are rounded and may not add to exactly 100%.
- Reasons an application stopped: coded from the notes our team wrote when an application went no further. One application can have several reasons.
- Regions: worked out from the address given, where there was one.
- Self-rated credit is what people told us. Credit scores are what a check returned.
Sources
Common questions
Where does this data come from?
From 1,330 car finance enquiries made through Fair Finance and the other car finance referral sites run by the same team between 22 July and 9 November 2026. Test entries and duplicates were removed. No names, contact details or addresses appear in the report, and any group smaller than 10 people is not shown.
What is the most common reason a bad-credit car loan application stops?
Defaults on the credit file. Where a reason was noted, defaults came up in 51% of cases, followed by income that did not cover the repayment (20%) and court judgements (18%). Many people had more than one reason, so the shares add up to more than 100%.
How much do people with bad credit usually want to borrow for a car?
Not much. Of the people who gave an amount, 54% wanted under $15,000 and 78% wanted under $25,000. Only 3% asked for $40,000 or more.
Can I get a car loan if I am on a benefit?
About one in five people in this data had benefit income, either on its own or alongside wages. Some lenders will consider it, usually for a smaller loan, and they decide case by case. Nobody can promise approval.
Can journalists or researchers use these figures?
Yes. Please credit Fair Finance and link to this page. The figures describe people who made an enquiry with us, not every borrower in New Zealand, so please describe them that way.
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