vehicle finance

[Labmad]

Hi, 

This is my first post, so I apologise in advance..... 

I'm migrating next month to Melbourne to start work in a local hospital on a PR visa. One of the first things that I'm going to need to do is purchase a vehicle, but I'd rather try and get one on finance rather than continue to deplete our savings, which we want to build on to get a mortgage at some point.

My question is, how long do we need to be in country before I would be eligible to apply for car finance? I have a full time work contract and have most other things already set up like bank account and medicare etc.

 

Thanks

Shaun

[Nemesis]

2 hours ago, Labmad said:

Hi, 

This is my first post, so I apologise in advance..... 

I'm migrating next month to Melbourne to start work in a local hospital on a PR visa. One of the first things that I'm going to need to do is purchase a vehicle, but I'd rather try and get one on finance rather than continue to deplete our savings, which we want to build on to get a mortgage at some point.

My question is, how long do we need to be in country before I would be eligible to apply for car finance? I have a full time work contract and have most other things already set up like bank account and medicare etc.

 

Thanks

Shaun

I don't know the specific ins and outs in Vic, but in Qld, if you are working in a public hospital, then you can often get a vehicle on a salary sacrificing deal - check it out with the HR department.

[Jon the Hat]

I found for example loans .com . au wanted to see 6 months income before they would lend, however you might find dealer direct finance will lend on the basis of a contract.  You will pay for it though, be prepared for secured car finance at rates much higher than the UK.  More like 10% interest is common.  I'm sure there are better deals out there, but they want better credit records than a new migrant will have.

Also note that while historically credit scoring was not a big thing in Australia, it is much like the UK now.

[Marisawright]

3 hours ago, Labmad said:

I'm migrating next month to Melbourne to start work in a local hospital on a PR visa. One of the first things that I'm going to need to do is purchase a vehicle, but I'd rather try and get one on finance...

The culture here is different. I noticed in the UK how everyone seemed to be buying new cars on finance, whereas here, people are more likely to buy a second-hand car, rather than get into debt to buy a new one.  Or they will "salary sacrifice" to get a car through their employer.  

The reason is, as Jon says, car finance here isn't the same.  When I was in the UK, I was astonished how many people buy a new car on finance, but then I realised how cheap it was.  Here, finance is very expensive so the car can end up costing you double its value by the time you've paid it off.   

As a new migrant, I wouldn't get finance.  If you decide Australia isn't for you, or something happens and you have to go home, you'll be in all kinds of trouble because you won't be able to sell the car.  (I'm sure you feel very confident right now that Australia is for you, but so does every other migrant who ever moved, and yet many do end up going home. So don't let your ego convince you it can't happen).  

If you are going to Melbourne or Sydney, I would look at Carly or Carbar or similar.  It's basically long-term car rental but the costs are comparable to paying off a car loan and you're not tied in.  It will give you time to look around and decide what you want to do longer-term.

https://carsubscriptions.org/en-au/carly/

Salary sacrifice is worth checking up on. Ask your HR department.  It used to be very tax-effective. It's less so now, but it's an ideal solution to your current situation because it's a lease through your employer, so if you leave for any reason, you just hand it back.  

Edited August 28, 2022 by Marisawright

[NicF]

The other thing to consider is that having a car loan will reduce the amount you can borrow on a mortgage.  (As will having  credit card even if you don't owe anything on it).  Banks will look at your expenses, outgoings and financial commitments when deciding how much they will allow you to borrow.

[Tulip1]

If you have savings I’d use them.  You’ll be getting a lot less interest on the savings than you’ll pay out on the finance.  You can pay the savings back each month with the same amount you’d have paid the finance loan.  Do the sums.  Get finance and pay perhaps $1500/2000 in interest (money just completely wasted) leave in savings and get a little bit of interest back (maybe $100/200) it’s a no brainer.  Getting rid of debt is almost always more money efficient than putting the money in savings.  If you already have the savings why take on finance throwing away a fair bit of money when you don’t have to.   

Edited August 29, 2022 by Tulip1

[Ken]

9 hours ago, Marisawright said:

The culture here is different. I noticed in the UK how everyone seemed to be buying new cars on finance, whereas here, people are more likely to buy a second-hand car, rather than get into debt to buy a new one.  Or they will "salary sacrifice" to get a car through their employer.  

The reason is, as Jon says, car finance here isn't the same.  When I was in the UK, I was astonished how many people buy a new car on finance, but then I realised how cheap it was.  Here, finance is very expensive so the car can end up costing you double its value by the time you've paid it off.   

As a new migrant, I wouldn't get finance.  If you decide Australia isn't for you, or something happens and you have to go home, you'll be in all kinds of trouble because you won't be able to sell the car.  (I'm sure you feel very confident right now that Australia is for you, but so does every other migrant who ever moved, and yet many do end up going home. So don't let your ego convince you it can't happen).  

If you are going to Melbourne or Sydney, I would look at Carly or Carbar or similar.  It's basically long-term car rental but the costs are comparable to paying off a car loan and you're not tied in.  It will give you time to look around and decide what you want to do longer-term.

https://carsubscriptions.org/en-au/carly/

Salary sacrifice is worth checking up on. Ask your HR department.  It used to be very tax-effective. It's less so now, but it's an ideal solution to your current situation because it's a lease through your employer, so if you leave for any reason, you just hand it back.  

Actually over here second-hand cars are very expensive compared to the UK which makes people think "I might as well buy a new one".

Earlier this year waiting times for new cars had blown out so much that one year old cars were more expensive than the list prices of new cars because the used cars were available now and you wouldn't see the new ones for 6 months or more, but even in normal times Australian cars depreciate slower that British ones.

[beketamun]

21 hours ago, Marisawright said:

The reason is, as Jon says, car finance here isn't the same.  When I was in the UK, I was astonished how many people buy a new car on finance, but then I realised how cheap it was. 

I bought a Skoda Fabia VRS on a credit card once. Ordered it online, it turned up on a truck and they rolled it off and handed over the keys, 0% for 12 months.

[beketamun]

12 hours ago, Ken said:

Actually over here second-hand cars are very expensive compared to the UK which makes people think "I might as well buy a new one".

Earlier this year waiting times for new cars had blown out so much that one year old cars were more expensive than the list prices of new cars because the used cars were available now and you wouldn't see the new ones for 6 months or more, but even in normal times Australian cars depreciate slower that British ones.

The UK is damper and there's a lot more wear and tear on the vehicle through constant stopping and starting.   Here you can see 50 year old cars wiithout any rust and Toyota's that will do a million km. 

I saw a Volvo 142 automatic cruising the street here with it's original paint job....very faded but sound.  My grandmother drove one of those in 1977 and it went to the scrapyard 40 years ago.  The classic car shows here are excellent, you see British cars that don't exist in Britain anymore.

Edited August 29, 2022 by beketamun

[beketamun]

On 29/08/2022 at 05:37, Labmad said:

Hi, 

This is my first post, so I apologise in advance..... 

I'm migrating next month to Melbourne to start work in a local hospital on a PR visa. One of the first things that I'm going to need to do is purchase a vehicle, but I'd rather try and get one on finance rather than continue to deplete our savings, which we want to build on to get a mortgage at some point.

My question is, how long do we need to be in country before I would be eligible to apply for car finance? I have a full time work contract and have most other things already set up like bank account and medicare etc.

Thanks

Shaun

You need a credit record, so some utility bills and perhaps split them across yours and your partner's names so you both get a record started.   You may find you need a credit record even to sign up to a post-paid mobile phone contract because you'll be taking credit.

[Whey aye]

On 30/08/2022 at 04:45, beketamun said:

The UK is damper and there's a lot more wear and tear on the vehicle through constant stopping and starting.   Here you can see 50 year old cars wiithout any rust and Toyota's that will do a million km. 

I saw a Volvo 142 automatic cruising the street here with it's original paint job....very faded but sound.  My grandmother drove one of those in 1977 and it went to the scrapyard 40 years ago.  The classic car shows here are excellent, you see British cars that don't exist in Britain anymore.

I think it is a huge mistake to compare prices.Here you can get a car that will last for 15. - 20 years for $20K.This is 20. - 25% of average wages depending where you get the figures from.I wonder what you would get in the UK for £ 7 - 8K.

If it is just 2 adults then perhaps an E scooter or an E bike each.Shopping can be home delivered for probably less than the cost of weekly petrol.If children are involved then different story.Being retired we go everywhere on normal bikes,but it would be different when you have to be at work for a certain time.

I don't know about Melbourne but Perth has cycle paths from everywhere to get to the city,or to the train station and take a scooter on the train.Bikes can only be taken on the train outside of the morning and evening rush/ busy period.

Luxury cars are ridiculously cheap.I've got my eye on a Mercedes S class from 2010 for $22K.As that is the real top of the range the technology in the car should still be reasonably up to date.That should last me the rest of my life.

[Labmad]

Thanks for the comments, I'm not looking for a new car..... I have found out that I could go down the novated lease route with my employer for a second hand car....

I've been looking at cars on some of the websites up to 12 years old and to be honest, I'd be happy with that for the time being.

We're just weighing up the options at the minute ie using cash vs finance at present. I don't really know why I've got such a thing for keeping money in my savings account.

[Marisawright]

17 minutes ago, Labmad said:

Thanks for the comments, I'm not looking for a new car..... I have found out that I could go down the novated lease route with my employer for a second hand car....

I've been looking at cars on some of the websites up to 12 years old and to be honest, I'd be happy with that for the time being.

We're just weighing up the options at the minute ie using cash vs finance at present. I don't really know why I've got such a thing for keeping money in my savings account.

If you can get a novated lease then I'd forget about finance.

[DukeNinja]

Be aware that cars over here are much more likely to have been thrashed. Especially since a P plater can drive anything, compared to the UK where a new driver is more likely to have a Fiesta/Corsair etc.

Buyer beware.

You might even be better off importing a car from Japan. You can get your hands on younger SEVS as opposed to the 25 year rule vehicles.

@Iron Lady Imports has got a Japanese import service here as Iron Chef.

[Labmad]

26 minutes ago, DukeNinja said:

Be aware that cars over here are much more likely to have been thrashed. Especially since a P plater can drive anything, compared to the UK where a new driver is more likely to have a Fiesta/Corsair etc.

Buyer beware.

You might even be better off importing a car from Japan. You can get your hands on younger SEVS as opposed to the 25 year rule vehicles.

@Iron Lady Imports has got a Japanese import service here as Iron Chef.

ah bugger, I have just sold my classic beetle as I was told it was too complicated to import it.

[beketamun]

2 hours ago, Labmad said:

ah bugger, I have just sold my classic beetle as I was told it was too complicated to import it.

You did the right thing unless you could service it yourself.  For any cars like that you need to look at parts availability.   

Even 10 years ago you'd steer away from something like a Skoda because even if you could use Volkswagen parts for servicing, availability of things like replacement bumpers or light casings meant a long wait from Europe, and there are not as many VAG mechanics here as in Europe.

In all seriousness....look at Toyotas. They are everywhere, they're not classed as a more premium car like in the UK, parts are easy, every mechanic in Australia can service them.

[Parley]

3 hours ago, DukeNinja said:

Be aware that cars over here are much more likely to have been thrashed. Especially since a P plater can drive anything, compared to the UK where a new driver is more likely to have a Fiesta/Corsair etc.

 

Not true. P Platers are restricted in what cars they can drive.

[Ken]

9 hours ago, Parley said:

Not true. P Platers are restricted in what cars they can drive.

The restrictions on P platers vary by state. There are restrictions on what car P platers can drive in NSW, QLD, SA and VIC (based on a power to weight ratio) but in ACT, NT, TAS or WA a P plater can drive any car.

Edited September 8, 2022 by Ken

[Skani]

On 08/09/2022 at 04:51, Labmad said:

ah bugger, I have just sold my classic beetle as I was told it was too complicated to import it.

Don't worry - you will have an ample selection of second hand good quality cars which have been no where near a P plater nor a thrashing.  If your own mechanical knowledge is limited  organise a pre purchase inspection through the RACV:  https://www.racv.com.au/on-the-road/buying-a-car/vehicle-inspections.html