Getting a new ride is an exhilarating experience for many. However, not everyone can afford to buy by cash; hence might need to consider car finance. If you are thinking of acquiring car financing, then you are in the right place. This article will demystify what you need to qualify and apply for car finance in New Zealand.


Before we jump into the topic, here a few guidelines to consider before seeking car finance;

House Finance Plan

Evaluate your finances

  • Evaluate your finances: write down your net monthly income and all your monthly expenses to determine how much money you can afford for your car finance. 

  • Are you buying a new or used car?: By now, you know how much income you want to spare for your purchase; it will be a guideline of whether you can afford a new or a used vehicle. 

  • Consider a trade-in: if you seek to upgrade your current car, you might want to consider a trade-in. In most cases, this will cover your down payment and reduce the amount you need to borrow for car finance. If you owe money for the car you intend to trade-in, it might not help much on your journey for acquiring a new one.


  • Check your credit score: knowing your credit score beforehand is a good idea; it will give you an idea of if you qualify for the car finance or not. If your credit score is deficient, the chances of getting financed are minimal and vice versa.     

  • Cosigning: do you have zero credit history or a low credit score? Don’t worry! Get a relative or a close friend with a strong credit history to cosign your car finance agreement. Incase you default or make late payments; however, it will reflect negatively on both your credit ratings hence affecting your creditworthiness. The co-signer also takes on the obligation of repaying the loan and any other accumulated fees and costs if you fail to pay.

Credit score for car finance


Now that you know your options,let’s discuss the process of acquiring car finance in New Zealand. Remember,different lending institutions may require additional information from you, sowe will discuss the standard requirements that cut across most lending institutions. Choose a financing option: here,you have two options: direct lending from a bank or credit union or dealership financing. 




Direct lending

Direct lending: you will approach finance company, bank, or credit union and agree on the amount to be financed, the duration and terms of repayment. Once your loan is funded, you will then go to a car dealer and use the money to pay for the vehicle. Before You settle for a specific lender, take your time to compare the rates and offers in the market. Getting your credit terms and preapproval in advance before shopping for a car will give you vital information on your loans, such as annual percentage rate (APR), length of the term, and the maximum amount you qualify. With this information, you will have a more substantial negotiations base when you approach your preferred dealer.

Dealership Financing

Dealership Financing: some dealers here in New Zealand can apply for car financing directly through them.You and the dealership will enter into a contract where you buy a vehicle and agree on the amount of loan, terms of repayment, repayment period, and finance charge for the amount you agree upon. The dealer usually sells the contract to either a finance company, credit union, or a bank. Acquiring dealership financing has many advantages, such as the convenience for getting everything under one roof, a wide choice of financing options, and special manufacturer-sponsored programs like low-rates and incentive programs for buyers.


Take Your time to analyze the offers on the table and see what suits you the most.Many creditors are now offering long-term credits of up to 84 months to repay.Which might be appealing from afar cause of the lower monthly payments, but don’t fall for this trap; this means higher finance charges and overall cost.Cars depreciate pretty quickly, and you end up owing more than your car’s worth, which we earlier learned is known as negative equity.


Fill Out the credit application forms: most lenders require almost the same information on the loan application forms. However, some lenders may require additional information to align with their company policies of which you are supposed to oblige. The standard information required here include

Your Details

Vehicle Information

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