It sounds like a deal too good to be true: pay $4,000 and get a $20,000 car in return.

Key points: Mining royalties are being used to subsidise car purchases

Mining royalties are being used to subsidise car purchases Anindilyakwa people pay $4,000, the land council adds $16,000

Anindilyakwa people pay $4,000, the land council adds $16,000 The aim is to boost jobs and give locals greater access to remote homelands

But that's what's happening on Groote Eylandt, where the local Aboriginal land council is using mining royalties to help residents buy second-hand vehicles.

It's part of a plan to give Anindilyakwa residents greater access to their traditional homelands, boost local employment and prevent locals being taken for a ride by unscrupulous car dealers elsewhere.

"In the past, people have been buying second-hand cars either locally or in Darwin, and to put it quite frankly, getting ripped off," Anindilyakwa Land Council chief executive Mark Hewitt said.

"[They have been] buying cars that are old, broken down already, for large amounts of money, [and] taking loans, I would say, from unethical lenders.

"And the outcome is that the cars don't last more than six months before they are off the road."

Bulk-buying to last longer

The new scheme involves the council bulk-buying used vehicles from a dealership in Cairns.

Cars are bought in bulk from Cairns as part of the ALC Motor Vehicle Royalty Scheme ( Facebook: Anindilyakwa Land Council )

To ensure their longevity, the four-wheel-drives come with one year of registration plus four mechanical check-ups.

The land council's chairman Tony Wurramarrba said the scheme is helping more residents get out of their communities and travel to remote parts of the island for cultural connection.

"People are actually going out to the country, taking their families out, taking the old ladies out, women and the children especially," he said.

"And actually sitting down with the children and explaining the history of our lands, of the homelands."

Royalties used in purchases

The manganese mine on Groote Eylandt generates millions of dollars' worth of royalties for traditional owners each year.

The bulk of those royalties, which are managed by the land council, are used to provide infrastructure and services on the island.

Twice a year, royalty payments worth several thousand dollars are also paid out to individuals.

The largest island in the Gulf of Carpentaria, Groote Eylandt. ( ABC News: Jano Gibson )

Mr Hewitt said the car-buying scheme, which involves residents contributing $4,000 and the land council chipping in another $16,000, helps prevent individual royalty payments being spent in unsustainable ways.

"In the past, the alternative is that people receive the same amount of money on the same day twice a year and it all gets blown on things like gambling or travel or a quick shopping spree and then it's all gone," he said.

"The new scheme is designed to get quality [vehicles], to have a great deal of probity around the purchase, and we do it in bulk through reputable people."

Hopes program will lead to jobs

The land council hopes the new scheme will lead to more jobs for Anindilyakwa people.

Tony Wurramarrba, chairman of the Anindilyakwa Land Council on Groote Eylandt. ( Supplied: Australian of the Year )

"We've got a lot of young people very interested in the maintenance of cars, of the bush mechanics, and it will actually be a part of this scheme as well," Mr Wurramarrba said.

Around 100 Anindilyakwa residents have signed up to the scheme so far.

"We hope to go again next year and it's really just contingent on what amount of royalties we can afford," Mr Hewitt said.

"At the end of the day it's their money and we are just trying to get really good sustainable outcomes from it."