Can I Get Car Finance While on Universal Credit or Benefits?
If you’re currently receiving Universal Credit or other government benefits, you might be wondering: can I still get car finance? It’s a common concern. The answer is yes, it is possible.
While receiving benefits can affect your application, many lenders today are more focused on affordability and reliability of income rather than just whether you’re in full-time employment. In this guide, we’ll explain how car finance works if you’re on benefits, what lenders are looking for, and how to give yourself the best chance of approval.
Is It Possible to Get Car Finance While on Benefits?
Yes, but it depends on the lender and your personal circumstances.
Some mainstream lenders may have stricter rules, but specialist lenders are more flexible. These companies often work with people who are self-employed, on part-time income, or receiving support such as:
- Universal Credit
- Personal Independence Payment (PIP)
- Employment and Support Allowance (ESA)
- Disability Living Allowance (DLA)
- Pension or Carer’s Allowance
The key question is whether you can afford the repayments.
What Car Finance Companies Look For
When assessing your application, lenders will consider:
- Total income: including benefits, pensions, or part-time wages
- Regularity of payments: consistent income is more important than the source
- Credit history: including any missed payments, defaults, or CCJs
- Monthly outgoings: your spending vs income balance
- Address stability: how often you’ve moved in recent years
- Existing debt: high debt levels can be a red flag
It’s important to be honest when applying. Lenders will do their checks, and transparency helps ensure you’re matched to suitable options.
How to Improve Your Chances
Even if you’re not in traditional employment, there are a few ways to boost your chances of being accepted:
- Save for a small deposit: this shows commitment and reduces the lender’s risk
- Use a guarantor: someone with stronger credit who agrees to back your loan
- Check your credit report: and correct any mistakes before applying
- Avoid recent payday loans: as these can negatively impact your application
- Choose a realistic car: lower value cars with lower repayments are more likely to be approved
Be cautious with “no credit check” or “instant approval” offers. These can come with extremely high interest rates and hidden fees. Always read the small print.
Frequently Asked Questions
Will applying affect my credit score?
Not at first. Using a site like Motorly to check your eligibility only performs a soft search – this doesn’t affect your credit score. A full application might involve a hard search, but you’ll be notified beforehand.
Can I apply if I’ve been declined elsewhere?
Yes. Many people come to Motorly after being turned down by mainstream lenders. We work with a panel of finance providers, some of whom specialise in helping people with less conventional circumstances.
Being on Universal Credit or other benefits doesn’t mean car finance is out of reach. Lenders are increasingly looking at your whole financial picture, not just your job title. If you have stable income and manageable outgoings, there’s a good chance you’ll find a lender who can help.
At Motorly, we make the process easy by matching you with trusted finance providers who understand real-world circumstances. There’s no upfront cost to check, and no obligation to proceed if it’s not right for you.
Ready to see your options? Start your quote today – it only takes a few minutes.