Will WINZ help me buy a car?

The short answer

Work and Income (WINZ) does not buy people cars. When you read what it publishes, the help that touches vehicles falls into three buckets: repayable help towards car repairs, vehicle modification funding for people with a serious disability, and driver licence support. Buying a car is not on the list.

That is different from what a lot of “WINZ car loan” pages suggest. Some of those pages are written by lenders who want your application, so it is worth being plain about it: a WINZ car loan is not a product. What exists is a set of one-off payments for essential costs, and one community lender, Good Shepherd NZ, that will lend interest-free for a car if Work and Income cannot help.

If you need a car for work, a medical appointment or the school run, the useful question is not “will WINZ buy it?” It is “which of these routes fits my situation, in what order?”

What Work and Income does cover

Car repairs

Work and Income says it can generally pay up to $400 towards some car repairs, and that you have to pay the money back. You do not need to be on a benefit to ask. The conditions it sets include:

• You are 16 or over, a New Zealand citizen or permanent resident, and normally live in New Zealand.
• You own the car, whether you bought it or were given it.
• You, your partner or your children immediately or essentially need the car because of a health condition, a disability, work, or a lack of public transport.
• Your income and assets are under set limits.

The same page says standard running costs are not covered: fuel, warrant of fitness, insurance, registration and regular servicing.

Vehicle modification funding

If you have a serious disability and need help to buy or modify a vehicle, Work and Income points to Vehicle Modification Funding. This is a separate pathway from everyday hardship help, and it depends on your health situation and finances. If it might apply to you, ask about it directly.

Driver licence and transport help

Work and Income also funds support to get a driver licence through providers around the country, which can include lessons and test fees, and offers half-price adult public transport fares to Community Services Card holders. Neither buys a car, but if the real barrier is a licence, this is the cheapest fix there is.

Advance Payment or Recoverable Assistance Payment

Two one-off payments cover most urgent costs, and the difference is whether you are on a main benefit.

Advance Payment of Benefit. For people who receive a main benefit such as Jobseeker Support, a pension, or Orphan’s or Unsupported Child’s Benefit. It helps with an essential or emergency cost you cannot pay another way, and you repay it. Car repairs are listed as an example of what it can help with.

Recoverable Assistance Payment (RAP). For people who do not receive a benefit but have an essential or emergency cost they cannot otherwise pay. You must be a New Zealand citizen or permanent resident who normally lives here. Income is capped (for a single person aged 18 or over, under about $52,500 a year before tax on the current page) and so are assets.

For both, your own and your partner’s income and assets are looked at. Your home and your car are left out of the asset test. The asset limit is low (under about $1,411 for a single person), so savings in the bank count against you.

If approved, you are paid onto a payment card, which expires if you do not spend the money within 7 days. Repayments usually come out of your weekly payments. Community Law’s guide says the debt is interest free and usually expected back within two years, and that repayments can be negotiated down if they would cause hardship.

How to ask, step by step

1. Decide what the cost is. A repair quote from a garage, not a guess. Get it in writing.
2. Write down why the car is essential. Work shift times, a medical appointment schedule, no bus within walking distance. Specific beats general.
3. Gather your numbers. Income, bank balances, and what you owe. You will be asked about assets.
4. Ring 0800 559 009. Work and Income will talk through your situation and tell you what to provide and how to send it.
5. Ask what happens if the answer is no. Ask about review rights, and whether anything else fits.
6. Keep notes. Date, who you spoke to, what was said.

A worked example (illustrative numbers only)

Say your car needs a $380 repair to pass its warrant of fitness and you drive to a job 20 km away with no bus. You get the quote and ask for an Advance Payment or RAP for the repair. If it is approved and you agree to repay $20 a week, you clear it in 19 weeks. You pay no interest, and it cost you nothing to ask.

Now compare buying a $7,000 car on a 13.95% loan over four years. The weekly cost is roughly $44 before fees. That is a different order of commitment, and it is the kind of figure the repayment calculator is for. This is an example only. Rates, fees and terms vary by lender, and nobody can promise what you would be offered.

When buying is the question: Good Loans first

If what you need is a car, not a repair, the cheapest route on offer in New Zealand is usually a Good Loan from Good Shepherd NZ. As of the current page:

• Loans of up to $7,000 are available to buy a car, and you can add your own savings to buy a car worth up to about $10,000.
• Good Loans are no-interest and fee-free.
• The loan is paid straight to the seller, not to you as cash.
• There are income caps (for a single person, under $65,000 a year before tax as at October 2024, subject to change).
• Good Shepherd says it cannot help if Work and Income can assist with the purchase, if you are on Single Jobseeker Support, or if your only income is self-employment.
• You must be able to afford your family’s essentials plus the repayments.

Because those rules are tight and change, read Good Shepherd’s page before you apply, and talk to a Good Loans coach. Other microfinance lenders exist, and Sorted keeps a list. Microfinance loans are usually under $5,000, so they suit a cheaper car.

When commercial finance comes in

Commercial finance is for the gap that is left when WINZ help, a Good Loan and your own savings do not add up to the car you need. It is a different thing: the car is the security, the lender can repossess it if you fall behind, and every lender has to check that you can afford the repayments before lending.

If you get there, keep it small. Pick the cheapest reliable car that does the job, put in any deposit you can, and run the weekly cost against your real budget with the real cost of owning a car in mind. Our guides to car finance on a benefit or WINZ and how lenders assess benefit income cover that step.

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, and the lender makes the decision case by case. We are paid by the lender only if a loan settles, and that never changes your rate. If a Good Loan or a Work and Income payment fits you better, we would rather you used it.

Red flags

• A page or advert promising a “WINZ car loan”. Check who is selling it. Work and Income does not offer one.
• A dealer who takes your payment card or asks you to sign over benefit payments. Work and Income repayments are arranged with Work and Income only.
• A very low weekly figure with a large final payment hidden at the end.
• A $7,000 car financed for far more than it is worth. Consumer NZ has reported on a Wellington buyer who signed a $30,000 loan for a $7,000 car. Read the total repayment, not just the weekly one.
• Pressure to sign today. Take the contract away and get advice first.

Checklist before you ring or apply

• A written repair quote or the price of the car you are looking at
• A short note on why you need the car (work, health, family, no bus)
• Your income, benefit amount and bank balances
• A list of what you already owe, including any Work and Income debt
• Your driver licence
• A weekly budget that shows what you can really repay
• A free budgeting call booked if money is tight (MoneyTalks, 0800 345 123)

General information only, not financial advice. Rules, limits and amounts change, so check the official pages below before you rely on a figure.

If you need a loan after all: how much it costs

Two questions people ask next are how to finance a car at all, and what a payment on a bigger car looks like. The order that tends to cost least runs from cash saved up, to a no-interest community loan if you qualify, to a bank or credit union personal loan, to a loan arranged through a broker or dealer. The later options usually cost more, and a loan where the car is the security means the lender can repossess it if you fall behind.

For a feel for the numbers, take a $30,000 car with no deposit, paid over 5 years. These are round examples, not offers, and the rate you are offered is the lender’s decision.

Interest rate	Approx. monthly payment	Approx. total repaid
10% a year	$637	$38,200
15% a year	$714	$42,800
20% a year	$796	$47,800

Rates differ widely by lender, deposit, credit record and the car. There is no single current rate to quote, so read the disclosure statement, which must show the interest rate, fees and total cost before you sign. Try your own numbers on the repayment calculator. If $637 a month is more than your budget allows, the answer is a cheaper car or a bigger deposit, not a longer loan.

Sources

• Work and Income: Car repairs
• Work and Income: Advance Payment of Benefit
• Work and Income: Recoverable Assistance Payment
• Work and Income: Transport to work
• Good Shepherd NZ: Good Loans
• Community Law Manual: Recoverable assistance
• Consumer Protection: Loans and lenders
• Sorted: Before you use credit
• Christians Against Poverty: Vehicle finance report