For many of us, having a car isn't just a luxury; it's a necessity, right? But getting car finance when your credit score isn't top-notch? That can feel like climbing Mount Everest. Luckily, things have changed. 

There are options out there for those of us dealing with less-than-perfect credit. 

The real deal-breaker in any car finance deal is the interest rate, even more so when you're dealing with bad credit. In the UK, rates for bad credit can be higher - ranging from 15% to 30% or even more. But here's the trick: comparing and negotiating can really make a difference. Even a little reduction in interest can save you a lot in the long run.

 

Can Bad Credit Get Car Finance?

Some lenders may not accept people with very low credit scores, and some may accept you, but with much higher interest rates. If you are offered such a deal, it’s important to check you are able to make the monthly repayments within your budget.

Some lenders might ask for a bigger deposit or a guarantor. Knowing what each lender looks for and how they handle bad credit is a smart move.

To secure car finance, regardless of whether you have bad credit, you've got to tick some boxes:

-Proof you have a steady income

-Proof of address

-Valid ID

Types of Car Finance for Bad Credit 

It’s possible you may still qualify for different types of car finance if you have a less-than-perfect credit score. You will just need to keep in mind that you may get higher rates and will likely need a bigger deposit to give your lender some confidence. 

Read more about the different types of car finance to get a clearer idea of what your options are.

Steps to Get Car Finance with Bad Credit in the UK

Having bad credit doesn’t make it impossible to get a car finance deal, but it can make things a little more difficult. However, there are steps you can take to improve your chances.

Step 1: Improve Your Credit Score

Get a free copy of your credit report and go over it to check for any inaccuracies that can be fixed. You should also see if any information is outdated as that could also be dragging your credit score down.

Step 2: Figure Out Your Budget

Take a look at your monthly outgoings and commitments to figure out how much you can realistically afford to pay for car finance. If you need help figuring out this number, there’s a great free government-sponsored Budget Planner tool you can use.

Step 3: Save a Deposit

Having a larger deposit can be very helpful in securing a car finance deal. Putting down a deposit may also mean you are offered better interest rates from lenders. Although keep in mind that every lender is different.

Step 4: Explore Multiple Lenders

Some lenders are more open to offering credit to people with bad credit than others. It can be challenging to try and find lenders on your own, which is where Autodosh comes in. As a car finance credit broker, we can help to put you in touch with one of our trusted lenders. It makes your journey a little easier knowing you’re in good hands.

Step 5: Get Your Documents in Order

When you apply for car finance, you will need to show various documents to the lender. You’ll need to show proof of income and employment (read more about self-employed car finance). You will also be prepared to show proof of address and a valid ID for your finance application.

Step 6: Choose Your Car

This is the exciting part! But a note of caution - you should only choose to finance a car that is comfortably within your budget. Make sure you consider things like the cost of petrol and any repairs that might be needed along the way. It could be worth considering financing a used vehicle to reduce the financing you need.

Step 7: Check Your Terms

If you have been offered a car finance deal from a lender, be sure to go over the terms and conditions carefully. This might not be the most exciting task, but it’s really important to make sure you know exactly what you’re signing up for. Ask questions to your lender if you’re not sure, to keep yourself crystal clear.

How much does Bad Credit Car Finance cost?

With any car finance deal, there’s no set price. It all really depends on your individual circumstances. Many things can affect the deal you are offered, such as:

-Your credit score

-Your deposit amount

-Your contract length

-Your borrowing amount

As a general rule of thumb, people with poor credit scores can expect to see higher interest rates. But again, the terms of your car finance deal are up to the lenders and will differ according to each one.

 

Final Thoughts

At Autodosh, we get it. Having a car is a big deal, especially when you're dealing with credit hurdles. Our team can help you explore bad credit car finance options. We're all about clear terms, good rates, and making sure you're happy every step of the way on your car finance journey.

Get a quote today from one of our lenders and turn your car dreams into reality!

Editorial Disclaimer: This content is for entertainment purposes only. Opinions expressed here are the author’s alone, and not those of any bank, credit card issuer, or any other company. This article has not been reviewed, approved, or otherwise endorsed by any of these organisations. NB: The information on this page does not constitute financial advice, please do your own research to ensure that the product/service is right for your individual circumstances.

Autodosh is a credit broker, not a lender.