In most circumstances, you can get a car loan even if you have recently started a new job.
The minimum tenure requirements will differ depending on whether you are a full-time employee, casual, or run your own business.
Demonstrating stability of income in the past and predictability of future income is one of the main factors in a loan assessment.
If you are considered higher risk then fewer lenders will approve your application, and your interest rate may be a little higher.
In this article, we will discuss how lenders consider each employment category and whether you can get a car loan after starting a new job.
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Car Loan Employment Explained
Lenders in Australia have strict eligibility requirements for their auto finance products, and their policies change frequently!
Employment is just one of these requirements that will have specific thresholds for each employment type.
The stability of your income is a critical factor when borrowing money and if you don’t meet these thresholds you could be rejected immediately.
However, some lenders will be more flexible in certain circumstances, but many will not.
Industry vs Employer
Some lenders may be flexible on their eligibility rules if you have moved to a new job in the same industry.
This will be assessed on a case-by-case basis, and the longer you have been in the industry the more likely an exception could be made.
A broker can be worth its weight in these circumstances!
They have a direct line to the lender and can provide context to your employment tenure when there are unique circumstances.
Required Length of Employment for a Car Loan
The guidelines below will include the minimum employment tenure requirements for auto finance lenders on the Gusto Finance panel.
All are subject to change at any time, and for the most up-to-date information, you should speak to our brokers directly.
Full Time
Minimum tenure: 1 Day
If you are a full-time employee you will be eligible with some lenders after just one day. After you pass your probationary period your choice of lender can also increase significantly.
From a lender’s perspective, lending to a full-time employee is the least risky category. You are entitled to benefits like sick leave and holiday leave, which improves the predictability of your income.
Stable income equals lower risk in the lender’s eyes. So, there is a lower threshold for the minimum tenure to get a car loan than with any other employment category.
Casual
Minimum tenure: 3 Months
While casual employment is one of the least stable categories of work, you will still be eligible for a car loan after just three months on the job.
As part of a car loan application, the lender will typically look at three months of bank statements as part of their credit assessment.
If you can demonstrate reliable and consistent income, then it will present well to the lender and you should have options.
However, unlike full-time employment, you will not have personal leave entitlements. So this places you in a higher risk category when applying for a car loan as a casual employee.
Self-Employed (ABN)
Minimum tenure: 6 Months
If you have recently started your own business then navigating a car loan application can be tricky. But there are some lenders who will consider your application after just six months.
You may be asked to provide some additional documentation to evidence your income, so ensure you have good records ready to go.
Your options will also be limited until you can demonstrate two years of consistent earnings. So do not expect the best rates on the market, but a loan approval can still be possible.
Temp
Minimum tenure: Case by Case
You may be eligible for a car loan even if working as a temp. If a sufficient level of consistency can be demonstrated to a lender, and the outlook for the future is relatively certain then some lenders will consider your application.
Seasonal
Minimum tenure: Case by Case
It is much more difficult to demonstrate a consistently reliable source of income if you are doing seasonal work. But it is not impossible.
If you are a temp or a seasonal worker then having a finance broker working on your behalf may be the difference between an approval and a rejection.
So get in touch today to discuss your options.
Longer Employment = More Options
A basic principle here is that the more stable your employment the more options you have to find a suitable lender.
Short tenure and instability of income can place you in a higher risk category from the lender’s point of view, and some of the more conservative lenders may not be interested.
However, there are a number of non-bank lenders who specialise in this type of auto finance and will be willing to consider your application.
Just be aware that the interest rate is likely to be higher.
Conclusion
If you have changed jobs in the last few months, then it is critical to apply for auto finance with a lender that will accommodate your situation.
A broker can help negotiate this minefield of rules across a broad set of lenders and find the best option for you.
