Navigating Bad Credit Car Finance

13 Dec 2023

Navigating Bad Credit Car Finance

13 Dec 2023

For many individuals, 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, and there are options out there for those of us dealing with less-than-perfect credit. Here's a complete guide to navigating the world of bad credit car finance in the UK:

What's a Good Car Finance Rate with Bad Credit?
The real deal-breaker in any car finance 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.

Who Can Get Bad Credit Car Finance in the UK?

To bag car finance with bad credit, you've got to tick some boxes:

Show Your Money:

Proving you've got a steady income is key.

Where You Live and Who You Are:

They'll want to know you live in the UK and have the right ID.

Deposit or a Pal:

Some lenders might ask for a bigger deposit or a friend with good credit to back you up.
Knowing what each lender looks for and how they handle bad credit is a smart move.

The Different Flavors of Bad Credit Car Finance

Subprime Lenders:

These folks specialize in working with those of us with not-so-great credit scores. Their rates might be higher, but they can be more forgiving about your credit history.

Hire Purchase (HP) or Personal Contract Purchase (PCP): 

Yep, even with bad credit, you might find HP or PCP options. But brace yourself for higher rates and maybe needing a bigger deposit.

Guarantor Loans: 

Some lenders offer these where a person with better credit co-signs, giving the lender a bit of confidence.

What Makes Rates Jump in Bad Credit Car Finance?

Loan Time: Longer loans might mean higher rates.

The Ride You Want: New or specific types of cars might have different rates.

Putting Down Cash: A larger upfront deposit might make things a bit easier.

What the Lender Thinks: Some lenders take a closer look at your story and might give you a better deal.

Steps to Get Car Finance with Bad Credit in the UK

Know Your Credit:

Grab your credit report and fix any messes.

Count Your Cash:

Figure out what you can handle monthly, considering everything else you've got going on.

Scout the Bad Credit Crew:

Check out lenders who specialize in bad credit. Compare what they offer.

Get Your Papers in Order:

Get your proof of income, ID, and where you live docs ready.

Apply Smart:

Apply carefully, not to too many at once – it can ding your credit score.

Study Those Offers:

Look hard at the terms, especially the interest and fees.

Bargain Like a Pro:

Try to get better terms, especially if you've got options on the table.

Get What It's All About:

Make sure you're crystal clear on what you're signing. Ask questions if you're not sure.

Monthly Costs for Bad Credit Car Finance in the UK

With bad credit, you're likely looking at higher monthly costs because of those higher interest rates. Let's say you're eyeing a £10,000 car for 3 to 5 years – you might be shelling out £300 to £500 a month or more, depending on the rate and your situation.

Wrapping Up

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

Get in touch with us today, and let's figure out how we can help you turn the dream of owning a car into reality, no matter what your credit looks like. Let's work together to make car finance work for you.