Buying a car is an exciting milestone for couples across Australia. You might be moving in together, starting a family or just need a second set of wheels.
Deciding to apply for a car loan together comes with benefits and responsibilities. Joint car finance might make a lot of sense financially, but it’s important you understand how it works, what’s required and how you can keep repayments fair.
In this guide, we’ll explain joint car loan applications, how shared repayments work and what to consider before signing on the dotted line together.
A joint car loan is when two people apply for a loan together. Typically, they’re used by partners or spouses. Both applicants will be listed on the loan agreement and both are legally responsible for making repayments.
For many, a joint application can make it easier to get approved. That’s because the lender assesses both applicants’ incomes, credit scores and financial positions. Instead one of person taking on the responsibility, it’s shared (which can be especially handy if one person is new to the workforce or has a limited credit history).
Like other car loan brokers in Perth, our crew know that joint car finance comes with a few clear advantages for couples:
Your combined income may allow you to borrow more, giving you access to a wider range of vehicles.
Repayments can be split between you, which can make budgeting a lot easier – especially if the car is used by both of you.
If one applicant has strong credit, it can boost the other person’s application. That results in a better deal overall.
It’s important to understand that joint loans come with shared responsibilities and risks. They include:
If one person stops contributing to repayments, the other is still fully responsible. Lenders don’t split the debt 50/50 – both parties are 100% liable for the full loan.
Late or missed repayments affect both applicants’ credit scores. Make sure you both understand your obligations and are on the same page before you apply.
Removing a name from your loan can be complicated and it isn’t always successful. If the relationship changes or you decide to manage your finances separately, you might need to refinance or pay out the loan early.
Shared repayments mean that you and your partner are both contributing to repaying the loan. The split can be equal or another way that better suits your incomes.
You might choose to:
Split payments 50/50 from a joint account
Alternate months or fortnightly repayments
Assign a percentage based on each person’s income
Shared repayments are like the rest of car financing – there’s no official, one-size-fits-all rule. With consistency, communication and a shared plan, you can find what works best for your situation.
Most of the documentation you need to supply in a joint car loan application is the same as in a single one. You just need to remember that you have to provide details for both applicants:
Proof of identity (e.g. driver’s licence or passport)
Proof of income (e.g. payslips or bank statements)
Credit history and current debts
Employment and residential details
The car’s details (if you’ve already selected it)
Because lenders assess both parties during the approval process, it’s important to be open about an debts or financial obligations either of you may have.
Finding the ‘best’ car loan for you depends on your goals and financial position. A joint application can be great when:
You’re both contributing to repayments
One person needs help getting approved
You want to access a larger loan amount
You’re in a long-term financial partnership
On the other hand, a solo loan might make more sense if:
Only one of you will use the car
You want to keep finances separate
One person has poor credit that could impact the loan
You’re planning to pay it off quickly and keep it simple
If you’re unsure, get in touch with our crew. They can walk you through both options and help you figure out what’s best.
Joint car finance can mean flexibility, savings and convenience – but it’s not the best choice for everyone.
It’s important that you have an honest conversation about finances and responsibilities with your partner. That way, you both know how the loan will be managed before you apply.
At Loans Unlimited, we’ve helped couples across Perth and WA find the car loan solutions that works for them. Whether you’re buying your first car together or upgrading the family ride, our crew will guide you through every step.
If you’re ready to hit the road together, start your application today and work with a leading Perth car loan broker.
