Moving back to Australia after spending time overseas is exciting, but also daunting to set up your life from scratch.
If you also need finance it can be a big challenge.
This week’s case study highlights what happens when a unique life situation meets a rigid credit system.
And sometimes, where you are buying the car matters just as much as who is buying the car.
Here is how we helped a returning expat get into a new car despite just arriving back on-shore.
Customer of the Week
Our customer had spent a couple of years living abroad and had landed a well-paying role soon after coming home.
Naturally, he needed a new car to hit the road immediately.
He initially came to us wanting to get pre-approved for a private car sale.
However, when we looked at his profile, we realised a private sale was going to be difficult to get over the line.
The Roadblocks
There were three main problems to solve.
1. Short Work History
Most lenders require a minimum of 3 to 6 months of continuous employment to approve a loan.
Proving stability of income is tougher when you have just started a job, but exceptions can sometimes be made.
2. Very Different Credit Scores
There are multiple types of credit scores in Australia which focus on different elements of your borrowing history.
This customer had a much lower Comprehensive Credit Score compared to the alternative negative credit scoring system due to a minor arrears blemish, but no major adverse default being recorded.
3. The Private Car Sale
Private sales are inherently riskier for lenders than buying from a licensed dealership.
Few lenders will consider them, and the costs can be higher when doing so.
In this case, there was no suitable lender that would support a private sale that matched his credit profile.
So, it was a tricky application on a number of fronts.
The Gusto Strategy
Unfortunately, the customer had to change his focus from private sellers to dealerships only.
Buying from a dealership comes with consumer protections and lowers the perceived risk for a lender, which opened up a whole new tier of specialist options for us.
Next, we prioritised lenders who relied on the negative credit data score in their assessment process, where his score was a healthy 700+.
By doing this, we ensured the most favourable treatment and lowest rate.
The Result
With a strong dealership-only pre-approval in hand, our customer spent the weekend shopping and found the perfect vehicle.
We secured his loan at a competitive 12.5% rate.
His intention is to repay the loan as quickly as possible, so we also made sure the loan contract was one with zero early payout fees.
This gives the borrower maximum flexibility and the lowest cost outcome.
A massive win for a borrower with just one month of work history and a bruised version of his credit file out there!
The Takeaway
When your credit is less than perfect, flexibility is your best friend.
If you are locked into the idea of a private sale, you might hit a brick wall with some lenders—even if you already have a pre-approval!
Having a broker in your corner means you have an expert who can look at your profile, identify the roadblocks before the banks do, and guide you toward the exact purchasing strategy that will get you approved.
Dealership vs Private Sale
As we saw in this week’s case study, where you buy your car can actually dictate if you get approved for a loan.
Many buyers assume that because private sales are generally cheaper, the loan will be easier to get.
The truth is actually the opposite.
Lenders view private sales as a much higher risk. There are no consumer guarantees, a higher risk of scams, and a greater chance the vehicle has hidden mechanical issues.
If you have a lower credit score, switching your search to a licensed dealership can often be the magic key that unlocks a loan approval.
Read the full article here
More from the Gusto Group
Gusto Finance is part of a broader family of businesses built to help everyday Australians across every stage of the buying journey:
- 🏠 Gusto Home Loans: We do for home loans what we do for car finance. Whether you’re buying, refinancing, or just want to know your borrowing power, our team compares options across a massive lender panel.
- 🚗 Gusto Auto: Our Brisbane-based used car dealership. If you want a seamless experience, you can buy a quality used vehicle directly from us while Gusto Finance handles the loan.
- 💸 Gusto Cash: Need access to funds fast? We provide flexible personal cash loans for when life happens outside of a standard car or home loan.