Can my car be offered as security?

When it comes to getting a personal loan, offering an asset up as security is a great way to get a cheaper interest rate. One of the easiest and most common forms of security is a motor vehicle. A motor vehicle is an excellent form of security as they hold a decent monetary value and information about the vehicle is easily accessible for the lenders due to vehicle registrations.

Now when you offer your car up as security on a personal loan, nothing physically happens to it. You get to keep and use your vehicle freely and whenever you want. Lenders only take actions to repossess the motor vehicle when your loan goes into arrears, and you manage to miss payments after being contacted by the lenders. So if everything goes well, then offering a car up as security should be no problem and should decrease the repayment amount on your loan.


So what are the requirements for a vehicle to be offered as security?

For a vehicle to be offered up as security, it must meet four criteria;

1: The vehicle must be valued over $5,000.

2: The vehicle must have a current WOF (Warrant of Fitness).

3: The vehicle must be registered and if applicable, have a RUC (Road User Charges) licence.

4: The vehicle cannot be currently used as security elsewhere.


In addition to the criteria above, if you get a loan with NZCU South and the purpose of the loan is to purchase a motor vehicle or refinance a motor vehicle from another institution, and is valued over $10,000, it must be taken as security via PPSR (Personal Property Securities Register).

So there you have it that is pretty much a basic overview of offering a vehicle up as security on a personal loan. We hope this information comes in handy if you are considering applying for a personal loan with us.