Use Existing Car for Secured Loan

LJosh84ab on 14/11/2022 - 22:22
Last edited 15/11/2022 - 11:40 by 1 other user

Evening all

I have a question in regards to using an existing vehicle as security for a personal loan. Unfortunately I have poor credit, which means I'm unable to apply for an unsecured loan.

Just wondering if it is possible to:

A) Get a loan using existing vehicle for security?
B) Not have an enquiry further hurt my score?

I have a vehicle approx. 8 years old and valued at approx $10k. I'm looking at a loan of around $3-$5k, paid back over 1-2 years. Borrowing money from friends/family is not something I'd be willing to entertain.

Does anybody know of a reputable company that can offer this service?

Thanks very much for any info!

Financial

Comments

  • Switchblade88 on 14/11/2022 - 22:35
    +5

    Welcome to OzFinancialAdvice, a representative will be with you shortly.

    I would recommend talking to your bank who A) deal with loans, and B) can answer your questions without checking your credit score.

    • Josh84ab on 14/11/2022 - 23:19
      -1

      Tried to, unfortunately not helpful due to my credit score.

      • AndyC1 on 15/11/2022 - 08:18
        +5

        Then you probably have no chance with the bank you called. See a broker.

        • Baysew on 15/11/2022 - 11:42

          Sort of rules out the reputable company bit.

  • brendanm on 14/11/2022 - 22:46
    +7

    I'll lend you the money at 20% interest pa. No credit checks, as long as you have both knees.

    • Josh84ab on 14/11/2022 - 23:18
      +1

      I have one good knee šŸ˜‚

      • salmon123 on 14/11/2022 - 23:41

        Sorry - 20% is the rate for 2 good knees. You're ability to repay the loan with 2 bad knees becomes almost zero … no pay day loan for you. Next.

      • Krankite on 15/11/2022 - 10:25

        How are your kidneys?

  • DASHCAM NOW DUDE on 14/11/2022 - 22:57

    Have you tried r/ausfinance on Reddit?

    • Josh84ab on 14/11/2022 - 23:19

      Not yet but thanks for the tip!

  • randomusername2017 on 14/11/2022 - 23:12

    Doubt you'll be back…

    But a pawnbroker is about the only one that might touch an 8 year old vehicle.
    3-5k is CC or payday lender territory…

  • SF3 on 14/11/2022 - 23:29

    I have a vehicle approx 8 years old and valued at approx 10k

    If you donā€™t have comprehensive insurance, itā€™s worth ā€œnothingā€ as a security. Or you canā€™t get your car back until loan fully repaid with interestā€¦ canā€™t see how that could work unless you go with brendanmā€™s loan.

    • Josh84ab on 14/11/2022 - 23:40

      My car is fully insured. I'm not looking at pawning my car, I'm using as a guarantee on the loan, ie if I forfeit on my loan, they can repossess my car.

  • AustriaBargain on 14/11/2022 - 23:39

    What are you going to use this loan for?

    • Josh84ab on 14/11/2022 - 23:41

      Debt consolidation, as I have some stuff which needs to be paid ASAP!

      • AustriaBargain on 14/11/2022 - 23:49
        +6

        Any chance you can convince those creditors to accept a payment plan that has lower interest than this loan would charge you? They might be legally obliged to accept a commitment for even low weekly payments for years ahead, I wouldn't know. I guess I should ask who are the creditors are. Credit cards? Fantastic Furniture? Rental damage?

        • Josh84ab on 15/11/2022 - 07:00

          They're very valid points. I think that's worth a shot, even if it means it buys me time, it's definitely worth looking into!

  • salmon123 on 14/11/2022 - 23:44
    -4

    Get a loan using existing existing vehicle for security?

    No chance with that sh*tbox.

    Sale and leasebacks are common for newer vehicles. Typically cars under 5 years old. Never going to happen with a 8 year old car.

    You'd be better off selling this car and buying a new one through a dealership. They will be able to set you up with a secured car loan for a used car.

    • kerfuffle on 15/11/2022 - 05:57
      +4

      How is he supposed to buy a new car on a loan when he has bad credit and doesn't even have $5K to consolidate his debts (which is why he wants to hock his car)?

    • Josh84ab on 15/11/2022 - 07:01
      +2

      Definitely not buying a depreciating asset when I'm already in debt!

    • brendanm on 15/11/2022 - 08:13
      +4

      In debt and needs money. Solution - buy a new car?

      • salmon123 on 15/11/2022 - 08:29
        -3

        It's not that different to getting a new credit card to pay off an old one. Plenty people do it.

        • brendanm on 15/11/2022 - 09:35

          It's extremely different. Op has poor credit to start with, and obviously doesn't have much cash, certainly not needing to have hundreds of dollars a week for a car payment. Ridiculous suggestion.

  • Mechz on 14/11/2022 - 23:52
    +9

    3 to 5k over 2 years? Are you a student on welfare?

    Just sell the car and pay off the debt then buy a car (if you need it) with whatever you have left.

    If you have loans of such a small amount and they're due ASAP it sounds like you got sucked into interest free and forgot to pay it or couldn't. Whatever the case the poor credit rating sounds like an accurate reflection.

    • Josh84ab on 15/11/2022 - 07:02

      I definitely can't argue with that!

  • avoidfullprice on 15/11/2022 - 00:27

    I have a vehicle approx 8 years old and valued at approx 10k

    Does your police covers brake down? If not, it is so high risk of the bank not able get 10k back.

    The only way i see you can cash out is to sell your car at 10k then finance a second car. Unlikely with your credit rating?!?

    • Josh84ab on 15/11/2022 - 07:03

      Pretty unlikely. Though selling the car may be an option if there's nothing else feasible.

  • altomic on 15/11/2022 - 02:12
    +7

    sell car for 10, pay off loans, buy another car for 6

    • onetwothreefour on 15/11/2022 - 06:21
      +4

      Or for $2k if you can find one, then you'll have some cash in the bank.

      Never go into debt again.

      • Josh84ab on 15/11/2022 - 07:04

        I hope I don't, it sucks!

    • Josh84ab on 15/11/2022 - 07:03
      +1

      That's definitely a path I may have to go down, thanks for the suggestion!

    • gyrex on 15/11/2022 - 12:27

      This seems like the most reasonable suggestion I've read so far.

    • Josh84ab on 15/11/2022 - 07:05
      +1

      Thank you, Quantum! That link is very helpful!

  • ph4007 on 15/11/2022 - 07:51

    Only way home here is to sell your car and buy a cheaper one. Suck it up.

  • thedeep on 15/11/2022 - 08:03
    +2

    Maybe go to a Financial Counsellor (such as Salvation Army Moneycare https://www.salvationarmy.org.au/need-help/financial-assistaā€¦). They can help talk to your lenders to restructure your loans to something affordable

  • holdenmg on 15/11/2022 - 08:06
    +4

    Hi,

    Have a look at:

    No Interest Loans (NILs)
    https://goodshep.org.au/services/nils/

    No Interest Loans (NILs) For vehicles.
    https://goodshep.org.au/services/vehicles/

  • backpaqer on 15/11/2022 - 08:58
    -1

    10k vehicle… Needs 3-5k… Which is roughly what you'd pay in insurance on that vehicle which would be mandatory to protect the secured asset.

    You might like to look at your cash flow situation first. Anything you're paying annually that could be paid monthly. If you're already paying comprehensive insurance - scale that back to 3rd party property (+ fire & theft if still affordable) and drive more carefully and get a dash cam (because everyone else lies their arse off in my experience).

  • ukom92 on 15/11/2022 - 09:22
    +1

    Google no interest loans. And call each of those organisations.
    I believe you can get upto 2k. Dont know if you can borrow from 2

  • JafferMoney on 15/11/2022 - 09:27
    +3

    Mate sorry to hear the situation you're in.

    Seems like the environment/your parents/circle of friends have had a poor impact on you financially. To be honest it's your mindset that needs to shift, these such loans are quick fixes which will kick the can down the road but won't help you long term.

    Increase your hours at work and in your downtime find ways of making extra money, there are so many opportunties, just need to be willing to put in the hours and save/invest instead of spend.

  • Waltervp on 15/11/2022 - 09:34
    +1

    Just sell car, pay debts, then get some cheap car from fb marketplace locally to see you through till you can upgrade car again.

  • Seraphin7 on 15/11/2022 - 10:14
    +2

    In all honesty, no lender is going to take an 8 year old, "maybe" $10k vehicle as security for anything.

    As others have said, you're going to have to pin your ears back and deal with the situation now, not attempt to get a different loan that is (likely) only going end up making the situation worse.

    Frankly, and as others have said, it's time for a financial reset which means selling the car and any other marketable assets to get rid of the debt. Yep, it sucks in that you will be without a car for however long it takes you to earn the money back, etc., etc., but could well be the tonic needed.

    Far better to deal with it now, rather than (1) having it hang around for years, and (2) risking the whole situation actually just getting worse.

  • Noblejoker on 16/11/2022 - 11:41

    National Debt Hotline - ACCC - free service

    This is what you want for sure

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