Can I get car finance with Bad Credit?

If you have bad credit or an insufficient credit record, obtaining car finance may appear difficult, but there are choices accessible to you.

Struggling with a poor credit history and worried about getting car finance? However, don’t let this discourage you as there are options available to you. In this blog, we’ll guide you through your options and provide tips on how to improve your credit score to increase your chances of getting accepted for better finance deals.

Poor Credit Car Finance – what you need to Know

Applying for finance with bad credit history can mean that some lenders won’t offer you the money for your car, as they view you as more likely to miss payments. Poor or incomplete credit history might also mean you’ll have to pay a higher interest rate, even if you do get offered car finance.

It’s important to apply only for car finance that you’re confident you can repay because you can improve your credit score over time by paying off the finance on time and in full.

To increase your chances of getting accepted for a better finance deal in the future, you can improve your credit score by checking that the credit companies hold correct information about you, staying at an address for three years, building a history of paying back loans and settling any debts.

In the short term, don’t let a bad credit score get you down – there are still a few ways to get behind the wheel.

Can You Get Car Finance with Bad Credit?

It’s possible to get car finance with bad credit, as long as you’re reasonable with your needs. If you’re applying for finance on a vehicle that’s out of your budget or a bit unusual (think imported classic cars), you’re less likely to get accepted. Look at your budget and decide what a sensible choice is for your next car, and make sure you’ll be able to keep on top of the payments.

At Motorly, our lender partners can take you through your options if you’re struggling with your credit score.

Can You Get Car Finance with No Credit History?

If you’ve just turned 18 or you’re new to the UK and haven’t been able to build up any credit history yet, you might have little to no credit history. You should still be able to get car finance, but you might find that interest rates are higher, or you need to pick a lender who specialises in these situations. The good news is that if you keep on top of your payments, car finance will help you build a good credit report.

The Best Way to Get Car Finance with Bad Credit

Getting car finance with poor credit history is possible with a few adjustments. You might find that your monthly payments are higher, as interest levels might be raised, but there are ways to make it work.

  • Offer a larger deposit: You might be able to get lenders to agree to car finance if you offer a larger deposit, as this gives the lender added security. The higher the deposit, the less your finance company will need to lend you, and it’ll see this as a lower-risk deal.
  • See if you can add a guarantor to your finance agreement: Adding a guarantor to your finance agreement is a good way to minimize more of the risk for your lender, as they’ll know they have someone else there for security. If you don’t keep on top of your payments, your guarantor will be responsible for them. This way, the lender knows it has added security for getting its money back and can show that somebody close to you has enough faith in your finances to have your back. Guarantor loans are less common now, so you might need to shop around to find a finance provider that has this option.
  • Find lenders who work with bad credit: There are lenders out there who specialize in working with people who have poor credit, so it might be worth checking them out. Motorly can help you find the perfect Bad Credit Car Finance partner.

Overall, if you have a poor or no credit history, it may be more challenging to get car finance, but it’s not impossible. By taking steps to improve your credit score and making sensible choices when it comes to choosing a vehicle and lender, you can increase your chances of being accepted for car finance.

Remember to always stay on top of your payments, as this will help you to build a good credit report over time, which will be helpful for any future credit applications.

Ready to take the next step? Visit the Motorly Bad Credit Car Finance page.