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 credit rating 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.


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.


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.


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.

Thinking about getting your next vehicle on finance? We have created an easy to use finance calculator to make this process easier than ever. Simply drag & drop the buttons up or down to suit your needs and reveal your estimated loan and repayment amounts. It’s that easy.


The FCA has investigated the car finance industry across the past two years

An incoming commission ban will save drivers £1,100 each.

From this report, it has emerged that certain car dealerships have been earning commission on the interest rate set. This in effect, “creates an incentive for brokers to act against customer’s interests” according to the FCA. Essentially, the higher the interest rate for the customer, the higher the commission the dealership receives. Commissions encouraged brokers and dealerships to act against what is best for customers.

The FCA report published in March 2019 states “some motor dealers are overcharging unsuspecting customers over a thousand pounds in interest charges in order to obtain bigger commission payouts for themselves”. This led the FCA to remove this type of commission. Which will, in turn, save the consumer money when it comes to the types of car finance deals available to them.

Additionally, they have promised to make further changes to how customers are told about these commissions. Ensuring that in the future they are aware of what is being presented to them. This will allow customers to choose the right deal once they have all of the facts.

Adrian Dally, from the Finance & Leasing Association, said this is, “good news for the industry and consumers, as it delivers clear rules and a consistent approach to commissions”.

This is great news for car finance customers and the industry alike. Creating this sense of transparency makes the market landscape clearer for everyone. Making all sides happier by creating better, fairer deals for all. It will also make the market more competitive, presenting customers with the very best options.

The FCA went on to say, “We have found a significant difference in the amount of interest customers pay when taking a motor finance deal arranged through a broker who benefits from a discretionary commission model compared to a flat fee model.”

The Financial Conduct Authority will have completed the plans ready for 2020. Here at motorly, we do not charge a fee for arranging car finance, nor do we make a commission on car finance interest deals. We strive to find our customers the best deal available to them at all times. Another win for motorly customers!

Want to find out more about the different types of car finance? We explain everything here.