Worried that your credit rating will affect your ability to get approved for car finance? Don’t worry, you are not alone.
Whilst it can feel an uphill struggle to get a car finance loan with bad credit, the great news is that it’s not impossible. Having a good credit score does indeed give you a few more options when looking for a deal, but for those with bad credit, it’s still possible.
Despite what you may have heard, there isn’t a minimum credit rating needed to get approved for car finance. This means those with a fair to poor rating can still get the finance they need to get behind the wheels of a new car.
At Motorly, we are experts on Bad Credit Car Finance, assisting UK motorists to navigate the car finance landscape to find the right solution for them. Read on to find our top tips to help you get approved.
What to do before you apply for car finance
Your credit score is a prime factor that lenders take into account when deciding to approve you for a car finance loan.
Even thought having a bad credit rating can limit the options available to you, it is still possible to obtain the car finance loan you need.
Check your credit score today and see if you can improve it.
Checking your credit score is always a great idea, especially when you are considering taking on a new finance agreement. If you do check your credit score, it is possible to make changes and potentially increase your credit score. Improving your credit score may help you get approved for car finance on better terms and a lower rate of interest. A few ways to improve your score include:
Reduce debts as much as possible
Reducing your credit utilisation (the amount of credit you are currently using versus the total level of credit currently available to you) can help improve your credit score. Reducing your credit utilisation to below 30% can help you get approved for more affordable rates.
Ensure all bills are paid on time
A great payment history will increase your credit score. Ensure all bills are paid on time. Make sure no accounts have been left in arrears.
Decide how much you can afford the monthly payments to be
When looking to buy a new car, it’s vital that you consider how much the monthly repayments will be. This will factor into what car will be suitable for you. You don’t want to find the ideal car only to find out the payments are too high for your budget.
Also, don’t forget to factor in other costs such as tax, insurance, and maintenance charges.
Get pre-approved for car finance
Not sure if your car finance application will be accepted? If you’ve got a poor credit rating the best course of action is to get a pre-approval before shopping for cars. By ensuring that you can get a car finance loan, you can walk into the showroom with your finance already in place – no need to worry if you will be accepted for your dream car
Motorly are the Bad Credit Car Finance experts and can help you every step of the way to get approved.
Shopping for a new car can sometimes be a challenging process, especially if your personal circumstances could get in the way of you obtaining the car that you want. A bad credit history can affect your eligibility for securing car finance, as well as other factors such as being in an IVA or having CCJs against your name.
If you have had issues with your finances in the past, it is possible that you are currently in a Debt Management Plan (DMP), which can often lead to problems obtaining the car finance you need.
At Motorly, we specialise in helping people get behind the wheel of a new car, whatever their credit history. Whilst being in a Debt Management Plan will mean that you have a few more actions to take to get finance, we can help you every step of the way.
What is a Debt Management Plan?
A Debt Management Plan (DMP), is a program put in place by a DMP provider to help you manage and control your debts in a way that is both responsible and manageable. Debt Management Plans can be a suitable route to take for those with the following debts:
Overdraft debts
Store cards and credit cards
Personal Loans
Catalogues and in-store credit debts
A debt management plan cannot help with certain ‘priority debts’ such as:
Council tax bills
Gas and electricity utility bills
Child support and maintenance costs
Income tax bills
National Insurance
VAT bills
Mortgage and rent arrears
Court fines and charges
Essential hire purchases
Your debt consultant will organise your Debt Management Plan to ensure that you start to reduce the debt you owe in the most efficient way. Each month, you will pay a fee to the Debt Management Plan provider, who will then pay the money to your creditors on your behalf. In doing so, your plan provider will assist you in keeping track of your obligations and stop you from spending your money irresponsibly.
Is it possible to get Car Finance when I am under a Debt Management Plan?
If you are currently in a debt management plan, it can be hard to make new purchases. This is because your Debt Management Provider will be stringent when deciding what new expenditure you are allowed to take on. This is particularly true when it comes to purchasing a new car.
However, it is still possible to get a car finance agreement approved when you are in a DMP. You will need to show that your new car is an essential purchase (such as being able to get to work), and also show that the vehicle is affordable within your agreed budget, without having an impact on your existing debt agreements.
When your Debt Management Provider is checking to see if your car is a necessity purchase, they will consider the following:
Do you care for a vulnerable or elderly person? If you take care of a relative who is elderly or vulnerable, you will likely need the car for shopping trips and journeys to the doctor etc. Your DMP will likely accept that the car is required in this case.
Do you have any health problems or issues? If you have a health condition that affects your ability to travel, your DMP could decide that your car is a necessity.
Are you a parent or guardian? The school run is a major use of the car for many people. Your DMP provider will usually agree that a car is required in these instances.
How long is your commute to work? The daily commute to your place of work is likely to be the biggest reason for needing a car. Simply put, if you can’t get to work you aren’t able to earn money. Your DMP provider will typically agree that you require a car in these circumstances.
Can you afford the car payments?
The most important factor you need to consider when looking into car finance is whether you can afford to pay the payments constantly for the lifetime of the contract. By taking out a car finance agreement, this debt will be added to the plan that your provider is managing.
The Motorly team can help you understand how the process works, help you find a suitable car for your budget and perform a credit check.
Are you eligible for car finance?
If you are currently in a Debt Management Plan, you are likely to have a lower credit score. This is due to the level of debt you currently have, along with the fact that a DMP is in place, showing up on your credit file. However, whilst it can make it harder to get car finance, it is still possible to get an agreement that is suitable for your circumstances.
Motorly is a specialist at finding car finance solutions for those with fair to poor credit scores, including those in an IVA or Debt Management Plan. We offer bad credit car finance and debt management car finance plans that enable people just like you to get behind the wheels of a new car.
Would a bad credit car finance deal be right for you?
If you currently have a bad credit score, it’s still possible to find a finance deal that is right for your needs. Motorly has a wealth of experience in helping those with bad credit find the perfect finance solution for their needs.
One question we get every day here at Motorly is how your credit history, credit rating and current financial obligations impact your ability to take out a Car Finance Agreement. This is especially true for those who are in an Individual Voluntary Arrangement (IVA).
If you are in an IVA, it can feel like someone has jammed on the hand break when it comes to obtaining car finance, with many people assuming that it is simply isn’t possible. However, with the help of a trusted broker such as Motorly, you may be able to get the finance you need.
Whilst being in an IVA does make the process a little longer, here at Motorly we pride ourselves on being IVA Car Finance specialists, assisting people in an IVA just like yourself get behind the wheel of a new car.
What do I need to do to get car finance when I am in an IVA?
If you are currently in an Independent Voluntary Agreement (IVA), you will need to get permission from your IP (Insolvency Practitioner) to enter the new credit agreement when the finance is over a certain amount.
For you, it means that if you want to take out a new credit arrangement for anything above £500 that is not for essential utilities, you will need a letter of confirmation from your IP to go ahead. This includes taking out car finance.
The reason for this is that your Insolvency Practitioner wants to ensure that you do not get into further debt by starting new finance agreements that you cannot afford. It enables you to continue paying off your debts as agreed.
How do I get the Insolvency Practitioner to agree to this new Car Finance Agreement?
To make sure that your IP allows you to take out a new car finance agreement, there are two vital stages to ensure you are given permission to enter a new car finance arrangement. They are:
Prove to your Insolvency Practitioner you can afford the car finance agreement
This involves showing to your IP that if you take out this new finance agreement, you will still be able to pay your current debts and responsibilities. It’s important at this stage to understand what your outgoing and obligations currently are and work out what you can afford to be paying out monthly for car finance. Our team of dedicated sales experts can help you work out what is a suitable figure for your circumstances.
Prove to your Insolvency Practitioner you need to take out car finance
This step involves proving to your IP that not only do you need to take out car finance but that it’s a vital agreement for you to enter. This could be, for instance, proving that you need to get the car to travel to work or that the cost of buying and operating the car is cheaper than relying on public transport and taxis to get around. If you can show that a car is either a work necessity or will save you money over the long term, your IP may approve the car finance agreement.
The good news is that if you can show that you can still afford the car finance deal without putting yourself at further risk of insolvency, you are one step closer to getting your new car. Your Insolvency Practitioner understands that getting to work is important, and if owning a car will enable you to continue working or even save you money, then you have a great chance of getting the confirmation letter you need.
Ready to find out more? Start your next motoring journey now by visiting the motorly IVA Car Finance page
Refused car finance but not sure why? Here are the top 5 reasons why a car finance application is not successful.
Credit Score
A poor credit score is the main reason why customers are rejected for finance. Whilst it’s not the only thing lenders considered, it’s a key factor in whether you will be successful or not.
Having a bad creditrating will not mean you are automatically rejected when you apply. However, a poor credit rating will at best limit your options when looking for a suitable car finance deal.
Never taken out credit before? A small or non-existent credit history can just be as bad as a poor one. Lenders will be unable to see how good you are at paying your bills on time and keeping on top of your debts, making you a bigger risk to lend to.
Employment Status
Your employment status is another factor that is taken into account. The positive news is if you are employed in full-time or part-time work, you should be able to find a suitable for you.
Those who are self-employed or have an income that does change every month may find it harder to obtain finance. The reason for this is because of the uncertainty that comes with not having regular monthly pay makes car finance lenders wary of accepting the application.
Age
Whilst you can pass your driving licence at 17, if you want to take out a car finance agreement you will have to wait until you are at least 22 until you are accepted. The main issue here is that most young people have a limited credit history.
Affordability
Responsible Lending practices are a key part of the finance process that borrowers go through. When looking over your application, lenders will look at your monthly income and spending patterns to see how much money is left at the end of the month. If a monthly car payment would wipe out your remaining budget, it’s likely your application could be refused.
Mistakes
A big reason for applications being rejected is because of simple mistakes. A slight error with an address, a wrong date or a typo could make all the difference between your application being accepted or not.
The best way to avoid this happening is to take your time and double-check all your details before you submit your application.
With the average cost of fuel hitting £1.46p in recent months, driving across the UK are looking at ways to save money at the pumps.
By following a few simple rules, you can conserve fuel and drive more efficiently, getting more miles for your money.
Here are ten tips on how to increase your fuel efficiency:
Use cruise control The majority of new cars on the road today have cruise control as standard. If your vehicle does, it can provide a more steady driving experience, making your engine more efficient and therefore save fuel. You don’t have to wait until you are on the motorway to benefit, either.
Use the right gears To maximise your fuel efficiency, it’s essential that you choose the right gear for the speed you are driving at. Both over-reving the engine and driving in too low a gear can affect your fuel efficiency.
Avoid idling where possible When your car is at a standstill with your engine running and idling your miles per galloon is exactly zero. That’s because whilst you aren’t moving, fuel is still being used. Remember to turn your engine off if you aren’t in motion.
Be careful using air con Using the air conditioning in your car will drop the fuel efficiency by 5-10%. Whilst we wouldn’t advise sweltering in the summer heat, it’s best to switch it off when it’s not required.
Reduce drag Anything fitted externally to a car, from a bike rack to a flag supporting your favourite team, will increase drag and therefore reduce your fuel efficiency.
Plan your route Knowing exactly where you are going will stop you driving unnecessary miles. Planning your journey to avoid traffic hotspots and peak times will also help.
Keep your speed steady Accelerating hard will burn through fuel fast. To save on fuel, accelerate gently and maintain a steady speed.
Maintain your car Basic maintenance on your car will improve its efficiency. Check your tyre pressure and oil levels regularly.
Lighten the load Don’t leave items in the boot of your car. Carrying items you don’t need means the engine has to work harder, decreasing your fuel efficiency.
Shop around for the best prices Fuel prices vary from forecourt to forecourt. Shopping around can save you money at the pump.
The Highway Code is due to change at the end of this month, after parliamentary approval of several new rules designed to help with road safety.
The Highway code is set to be updated this year following Government approval of several new rules and rule changes.
The changes include:
New Hierarchy of Road Users
Puts extra responsibility on drivers of larger motor vehicles
Pedestrians will be given higher priority
The new Highway code will come into effect on the 29th of January. A total of 8 new rules will be added along with updates to 49 rules already in place.
The biggest change for road users will be the ‘Hierarchy of Road Users’. This will prioritise vulnerable road users, such as cyclists and pedestrians.
What new rules are being introduced to the Highway Code?
Rule H1
The Hierarchy of Road Users rule will put more responsibility on the drivers of larger motor vehicles to look after more vulnerable road users.
The rule change states that:
‘Those in charge of vehicles that can cause the greatest harm in the event of a collision bear the greatest responsibility to take care and reduce the danger they pose to others’.
Rule H1 also states that cyclists and horse riders have a responsibility to look after pedestrians. It also stresses that all road users have an obligation to ensure their own safety, as well as that of other road users.
Rule H2
Rule H2 applies to drivers, motorbike riders, horse riders and cyclists. The rule states: ‘At a junction, you should give way to pedestrians crossing or waiting to cross a road into which or from which you are turning.’
What this means is that if you are turning into a road and there’s a pedestrian waiting to cross, you should give way to them.
Rule H3
Rule H3 covers drivers and motorcyclists. The rule states that ‘You should not cut across cyclists, horse riders or horse-drawn vehicles going ahead when you are turning into or out of a junction or changing direction or lane.’
What other rules have been introduced?
Several new rules have been included to help clarify when pedestrians have priority on the road. Cyclists are advised to take care when overtaking pedestrians and horses by slowing down and using a bell to alert them.
Cyclists are also now encouraged to ride in the centre of their lane to make themselves more visible on quieter roads and in slow-moving traffic or going up to junctions when it would be unsafe for vehicles to overtake.
How is the highway code enforced?
The Highway Code is being updated to improve road safety for road users. However, there will be no changes to the law. The rules of the highway code are only advisory, meaning a person will not be prosecuted for not complying with them.
However, the rules of the Highway Code can be used in court to establish liability in the event of an accident under the Road Traffic Act.
Altrincham, UK £22,000 – £26,000 OTE £45,000 – £60,000 (uncapped)
Company description
This is an exciting opportunity to join an ambitious and customer-centric focused car finance credit broker, servicing near/non-prime customers, delivering a 5 star service.
We have a strong ethos, of making sure work is enjoyable, and wish to continue to promote a strong work-life balance.
We are based a minute’s walk from the nearest tram stop in Altrincham, and we are accessible from all major road/motorway networks.
Job description
We are looking for ambitious people who MUST be able to demonstrate previous experience within B2C Sales, preferably within finance/car finance.
This is a B2C role whereby you will receive pre-approved web applications to call, qualify, and help find the customer a competitive finance package, and assist them with their car purchase.
You will have access to a panel of direct lenders, covering all credit types, with full control and access to lender portals, so you can quote your customer in real-time with no guesswork involved.
Being in a Sales role, you will work to monthly targets, and KPI’s set out by management. There will be plenty of scope for development and career progression in a thriving business/industry.
£22,000 – £26,000 depending on experience.
OTE £45,000 – £60,000 Though Uncapped!
Additional pay:
Bonus scheme = Ad Hoc weekly competitions
Commission pay
Benefits:
Casual dress
Company events
Company pension
Referral programme
A good work-life balance
Experience:
Sales: Credit Broker or Car Sales – 1 year minimum
Mohamed Salah has an impressive car collection, including the Bentley Bentayga.
Roberto Firmino – Range Rover Sport
Forward Roberto Firmino has been spotted driving to and from training in a Range Rover Sport.
Virgil Van Dijk – Mercedes G-Wagon
Van Dijk’s car of choice whilst driving on the roads of Liverpool is a Mercedes G-Wagon.
James Milner – BMW X5
Ever dependable James Milner can often be seen driving his BMW X5.
Jordan Henderson – Mercedes-AMG GT 63 S Coupe
Captain Jordan Henderson is regularly spotted in his Mercedes AMG GT 64 3 Couple en route to training.
Jurgen Klopp – Vauxhall Insignia
It may surprise you that Manager Jurgen Klopp’s car of choice is a rather modest Vauxhall Insignia. However, Klopp is an ambassador for the Vauxhall/Opel brand.
Looking for Car Finance deals in Liverpool? Check out the Motorly Car Finance Liverpool Page for more details and to apply
Looking for sleek style and top performance from a compact SUV at an affordable price point? The Range Rover Evoque could be the right car for you…
The UK has seen the compact SUV market explode over the last few years. Customers can’t get enough of high-riding, family-focused compact SUVs that offer both style and performance.
Launched in 2021, the MK1 Range Rover Evoque has built up a big following, especially after the 2014 facelift. It offers buyers the desirable brand image at a more affordable price point, without sacrificing the sleek looks that make Range Rover so popular. The car has gone on to sell close to half a million units worldwide since its launch.
Despite being on the market for nearly a decade, the Evoque has aged well. Used values remain strong, meaning that bargains can be hard to come by. However, you can expect the car to hold its value better than others.
Which model should I go for?
There’s a lot of different models available on the market today, which can make choosing the right one harder than you’d expect. If you can, we’d advise that you go for the five-door diesel. The three-door Evoque can be tight for space in the back, and the petrol model can only muster up a mere 32 miles per gallon.
What issues should I be aware of when buying a Range Rover Evoque?
If you’re looking to buy a Range Rover Evoque, it’s worth looking for these common issues so that you can make sure to avoid them.
Wheels and Tyres: Replacement tyres are not cheap for the car. It’s worth checking the tread depth to make sure the tyres are up to the job.
Electrical Issues: The biggest issue with the Evoque is the electrical issues. Remember to check every switch and button before purchasing.
Check below the sills for damage: The Evoque is not a true off-road vehicle, unlike some bigger models available. Not all drivers get the memo, though. Look for signs of damage on the skills, floorpan, wheel arches and exhaust.
What alternatives are available on the market?
The popularity of the compact SUV market means you have plenty of alternatives. We’d recommend that you check the Audi Q3, and Nissan Qashqui.
Looking to get finance on a Range Rover Evoque? Check out our Motorly Car Finance Page for more details.
