How to buy a car with no money in New Zealand
You cannot buy a car for nothing, but you can buy one without a deposit if you can afford the repayments. A no-deposit car loan is the usual route, and it costs more than saving first. Cheaper routes exist for some people, including a no-interest Good Loan, a family loan or a smaller car, and nobody can promise approval.
The honest answer
Nobody gives you a car for nothing, and a page that says otherwise is selling something. What people usually mean by “no money” is one of three things:
- No deposit. You can pay the weekly or monthly repayments but have nothing saved for the upfront part.
- Very little saved. You have a few hundred or a couple of thousand dollars and not much more.
- No spare income at all. Rent and bills take everything, and a car loan would not fit.
The first two are workable, with care. The third is not a finance problem. If there is no room in the budget for repayments, insurance, fuel and repairs, a loan will only add stress, and the better move is the cheapest transport that gets you to work. This page is mostly about the first two, and it is honest about the third.
Fair Finance is a referral service, not a lender. One application and one soft credit check go to a panel of approved New Zealand lenders. The lender decides, case by case. We are paid by the lender only when a loan settles, and that does not change your rate. We have no interest in you borrowing more than you need.
The cheapest routes first
Run down this list in order. Each step costs more than the one before.
1. Save a small amount and buy a cheaper car
Interest is the cost of having the car today instead of later. Every dollar you put in as a deposit is a dollar you do not pay interest on. Even $500 or $1,000 helps, and it also shows a lender you can set money aside. Our page on how much deposit you need for a car loan explains how a deposit changes the loan.
A cheaper car does more than a bigger deposit. A $6,000 car is a smaller loan than a $12,000 one, and the repayments, insurance and registration are all lower.
2. A no-interest Good Loan
Good Shepherd NZ runs Good Loans, which it describes as no-interest and fee-free. For a car, the current page says:
- Loans of up to $7,000 are available to buy a car, and you can add your own savings to buy a car worth up to $10,000.
- The money is paid straight to the seller, not to you as cash.
- There are income limits. At 1 October 2024 these were $65,000 a year before tax for a single person, with higher limits for families, and they are a guide only.
- It cannot help if Work and Income can help with the purchase, if you are on Single Jobseeker Support, or if your only income is self-employment.
- You have to be able to afford your family’s essentials as well as the repayments.
The example on the page shows $7,000 repaid at about $67 a week over 24 months or about $45 a week over 36 months. These rules change, so read the page and talk to a Good Loans coach before you plan around it.
3. Work and Income, with realistic expectations
Work and Income does not fund car purchases. Its published help covers repayable help towards some car repairs and vehicle modification funding for serious disability. If you already own a car that needs fixing to stay on the road, that is a very different and much cheaper problem than buying one. See will WINZ help me buy a car for what exists and how to ask. Lenders do not treat all income the same, and our page on low income car finance covers how a benefit or a low wage looks to them.
4. Family or whānau help
A relative might lend you money, or buy the car for you to repay. This can be the cheapest option of all, and it can also strain a relationship if it goes wrong. If you go this way:
- Write down the amount, the repayment schedule and what happens if you miss one.
- Keep the car registered in your name, or agree who owns it, in writing.
- Do not ask someone to back your loan as a co-signer unless they understand they will owe the money if you stop paying. Consumer Protection advises avoiding a guarantor if you can. Our guide to joint and guarantor car finance explains the risk to them.
5. A no-deposit car loan
If none of the above is available, a no-deposit loan covers the whole price of the car. It is the most flexible route and usually the most expensive. The lender takes more risk, so you may be offered a higher rate, and a bigger balance means more interest across the term. Our page on no-deposit car finance covers how it works, and bad credit no-deposit car finance covers it when your credit file has marks on it.
KiwiSaver: can you use it?
People often ask whether a KiwiSaver hardship withdrawal can pay for a car. The official wording says no in plain terms: it is for significant financial hardship, not for a purchase.
Inland Revenue lists the situations that count. They include not being able to meet minimum living expenses, being unable to pay the mortgage on your home when the lender is moving to enforce it, modifying your home for special needs, medical treatment for you or a dependant, a serious illness, and a dependant’s funeral costs. Most people apply to their scheme provider, not to Inland Revenue, and the provider has to be satisfied that you have explored and exhausted other reasonable ways to cover the cost. You also need to supply evidence. Sorted says hardship withdrawals are not for debts such as credit cards or fines.
A car is not listed. If you think your situation is genuinely a hardship case, because you cannot meet minimum living expenses and the car is part of that, ask your provider what they will accept. Do not assume. Taking money out of KiwiSaver also reduces your retirement savings, and the money you remove stops growing.
The first-home withdrawal rules are for a house, not for a car.
What a no-deposit loan costs: an illustrative example
These numbers are made up to show the method. They are not offers, and the rate you are offered is the lender’s decision. Take a $9,000 car.
| With $1,000 deposit | With no deposit | |
|---|---|---|
| Loan amount | $8,000 | $9,000 |
| Rate (illustrative) | 15% a year | 18% a year |
| Term | 3 years | 3 years |
| Approx. monthly repayment | $277 | $325 |
| Approx. total repaid | $9,984 | $11,713 |
| Total cost above the cash price | about $984 | about $2,713 |
On those assumptions the no-deposit loan costs around $1,700 more over three years. Part of that is the extra $1,000 borrowed and part is the higher rate. The point is not that no-deposit loans are always bad. The point is that you should see the gap in dollars before you sign. Try your own numbers on the repayment calculator.
Stretching the term lowers the payment and raises the cost. The same $9,000 at 18% over four years is about $264 a month and about $12,690 in total. Lower weekly payments feel better, and they cost you more.
The costs beyond the price
When money is tight, the loan repayment is only part of the bill. Before you commit, add up:
- Registration, a warrant of fitness and any transfer costs
- Insurance, which a lender may require while the loan is open
- Fuel or charging
- Servicing, tyres and the repair you did not plan for
- A cushion for a bad month
Our guide to what it really costs to own a car has a worksheet. As a rule of thumb, if the repayment alone takes most of the spare money in your weekly budget, the car is too expensive for now. A smaller loan, a cheaper car or waiting are all better than a repossession.
How to find a car you can afford
- Decide the weekly number first. Work out what you can pay for repayments and running costs together, then work backwards to a price.
- Pick reliability over looks. An older common model with a service history is better than a cheap import with unknowns.
- Get the car checked. An independent inspection costs far less than a major repair.
- Search the PPSR. Do a PPSR check so you do not buy a car that still has money owing on it.
- Ask for the cash price. Compare it with what the finance contract says.
Red flags
- A “no money down” advert that never shows the total repayment.
- A very low weekly figure with a large final payment hidden at the end. Ask for the total, in writing.
- A car priced well above what similar cars sell for. The loan may be larger than the car is worth.
- Someone offering you cash for signing, or asking for payment before any paperwork. That can be a scam.
- Pressure to sign today. Take the contract home and get advice.
- A lender or dealer who promises approval before seeing your income. Nobody can promise it.
What to do if money is already tight
Free help exists. MoneyTalks (0800 345 123) gives free budgeting support, and a financial mentor can work through your numbers with you at no cost. See our page on financial mentors for how to find one. If you have debts behind you, sorting those first often makes a car loan easier to get and cheaper later.
How Fair Finance helps
If you decide a loan is the right route, one application and a soft credit check go to a panel of approved New Zealand lenders. Because it is one application, you do not have to apply lender by lender. Lenders decide case by case. Start with the quick check.
Checklist
- Worked out a weekly number that includes running costs
- Checked whether a Good Loan or family help is possible
- Understood that KiwiSaver hardship is not a car fund
- Priced a cheaper car as well as the one you want
- Compared the total repayment with the cash price
- Insurance and registration added to the budget
- PPSR check done
- Contract taken home, with fees explained
- A free budgeting call booked if things are tight
General information only, not financial advice. Rules and limits change, so check the official pages below.
Sources
Common questions
Can I really buy a car with no money down in NZ?
Yes, some lenders will finance the full price of a car, so you pay no deposit. You still pay the money back with interest and fees, and the lender decides case by case on your income, spending and credit file. No deposit means a bigger loan, so the repayments are higher than they would be with a deposit.
Can I use a KiwiSaver hardship withdrawal to buy a car?
It is unlikely. Inland Revenue lists significant financial hardship as things like being unable to meet minimum living expenses, mortgage enforcement on your home, home modifications or medical treatment for special needs, serious illness and funeral costs. Buying a car is not on that list, and the scheme provider has to be satisfied you have used up other reasonable options first. Ask your provider before you assume anything.
Will Work and Income buy me a car?
No. Its published help covers things like repayable help towards car repairs, not buying a car. If you have a serious disability and need a vehicle modified, ask about vehicle modification funding. Our page on whether WINZ will help you buy a car goes through it.
What is the cheapest way to get a car with very little money?
Usually it is saving even a small amount, buying a cheaper car, or a no-interest Good Loan from Good Shepherd NZ if you qualify. Good Loans for a car are up to $7,000, with income limits and exclusions, and they are paid to the seller. A family loan with a written agreement can also be cheap, but it carries its own risks.
Is a car with a very low weekly payment a good deal?
Not by itself. A low weekly payment can come from a long term, a high-priced car, extra fees or a large final payment. Look at the total you repay across the whole loan and compare that with the cash price of the car.
What should I check before signing a no-deposit car loan?
Check the cash price against the contract price, the interest rate, every fee, the total repayment, and what happens if you miss payments. Take the contract home overnight if you can. You also have a right to cancel within a set period after disclosure, which Consumer Protection explains.
See your repayments, then get a fair rate.
One application, one soft credit check, no obligation. We match you to the lender most likely to give you a fair go.