Written and reviewed by the Finance Director at Alpha390 Finance
Your first car loan is a milestone — and often the first serious credit you’ll ever apply for. The catch is that lenders like to see a track record, and a first-time buyer usually doesn’t have one yet. The good news: first car loans are approved every day, and knowing what lenders actually look at makes the difference between a knock-back and driving away.
What lenders check on a first car loan
Because you may have little or no credit history, lenders lean on the things you can show: steady income, stable employment, a clean (even if thin) credit file, and your capacity to comfortably cover the repayments alongside your other costs. A deposit helps, and so does a guarantor if you have one. It’s the same framework lenders use on any application — our guide to what lenders look for when approving car finance breaks it down in full.
How much deposit do you need for your first car?
There’s no fixed rule, but a deposit of around 10–20% strengthens a first-time application: it reduces the amount borrowed, lowers the lender’s risk, and can improve the rate you’re offered. A no-deposit first car loan is sometimes possible with strong income and a clean file, but a deposit almost always helps. You can test different amounts with our borrowing-power guide and how much can I borrow explainer.
Building credit before (and with) your first loan
| Situation | What helps | What to avoid |
|---|---|---|
| No credit history | Steady job, deposit, keeping other bills current | Multiple applications in a short window |
| Thin credit file | A small, well-managed existing account (e.g. phone plan) | Missed or late payments |
| Casual / new employment | Time in the role, consistent income | Understating living costs |
Every credit application leaves a mark on your file, so it pays to apply once, to the right lender, rather than scattering applications. That’s exactly where a broker helps — we match your situation to a lender likely to approve it, rather than you guessing.
New or used for a first car?
Both can be financed. A used car means a smaller loan and less depreciation, which can suit a first-time budget; a new car may come with a sharper advertised rate but a larger amount borrowed. What matters most is that the repayment sits comfortably within your budget, with room for fuel, insurance and running costs.
Getting approved
Tell us your income, your deposit and the car you’re after. We’ll match it to a lender from our panel that’s comfortable with first-time buyers and come back with your options — including a realistic rate and repayment. Start with the car finance hub or apply online.
Frequently asked questions
Can I get a car loan with no credit history?
Yes, it’s common for first-time buyers. Lenders focus on your income, employment stability and capacity to repay. A deposit or a guarantor strengthens the application.
How much deposit do I need for my first car loan?
There’s no set minimum, but around 10–20% is a helpful target. It lowers the amount borrowed and the lender’s risk, which can improve your rate. Some first-time buyers are approved with no deposit if their income and credit file are strong.
Should I get a new or used car for my first loan?
Either can be financed. Used means a smaller loan and less depreciation; new may offer a sharper advertised rate. Choose the option whose repayment fits comfortably in your budget.
Will applying for a first car loan affect my credit score?
Each application is recorded on your credit file, so it’s best to apply once to a well-matched lender rather than making several applications. A broker helps you target the right lender the first time.
Can I use a guarantor for my first car loan?
Often, yes. A guarantor can help a first-time buyer with limited history get approved or access a better rate, subject to the lender’s criteria.
This article is general information only and does not constitute credit or financial advice. Alpha390 Finance operates under Australian Credit Licence 506065 (Five Tees Pty Ltd). Lending is subject to approval, lending criteria, terms, conditions and fees. Any rates or repayments mentioned are examples only and are subject to change; a comparison rate warning applies to consumer credit and actual offers depend on your circumstances.
