Can you get Car Finance with Bad Credit in the UK?

In this article, I want to answer your question: Can you get Car Finance with Bad Credit in the UK? I understand how daunting bad credit can feel, especially when you’re worried about transportation. I’ll walk you through what lenders look for, how to improve your chances, and practical steps you can take—backed by trusted UK sources like HMRC, MoneyAdviceService, and the FCA.

What is considered “Bad Credit”?

Before diving in, let’s define bad credit. In the UK, bad credit typically means:

• Adverse marks on your credit report (e.g., missed payments, County Court Judgements)
  
• A credit score below “fair”
  
• A short or thin credit history
  

You might wonder, Can you get Car Finance with Bad Credit, and the answer is yes—you can—but lenders see you as a higher risk. That affects the deals you get.

How lenders assess car finance applications

Lenders consider several factors:

1. Credit history and credit score – They check your credit report from agencies like Experian, Equifax or TransUnion.
   
2. Income and affordability – Proof of income reassures them you can afford repayments.
   
3. Deposit or trade‑in value – A larger deposit reduces the lender’s risk.
   
4. Type of finance – PCP, Hire Purchase (HP) or Personal Contract Hire (PCH) have different criteria.
   

Because of this, the question Can you get Car Finance with Bad Credit requires a nuanced answer—you can, but your circumstances matter.

You can also read this guide on car loan:

How Do You Get a Car Loan in the UK?
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Types of car finance for those with bad credit

Here’s how the main finance types stack up if you’ve got a poor credit history:

Hire Purchase (HP)

• Suited to bad credit applicants
  
• You pay fixed monthly amounts and own the car at the end
  
• Lenders often need a deposit of 10–20%
  

Personal Contract Purchase (PCP)

• Monthly payments are lower, but you must pay a final balloon payment to own the car
  
• Lenders tighten criteria, may require better credit or higher deposit
  

Guarantor Loans

• A family member or friend “guarantees” the loan
  
• Can improve approval chances and rates, but guarantor must have good credit
  

Yes, Can you get Car Finance with Bad Credit? HP and guarantor loans are your best bet.

Improving your chances of approval

Even with bad credit, you can boost your chances:

1. Check your credit report – Use free checks via HMRC‑approved tools or credit reference agencies.
   
2. Correct any errors – Dispute inaccuracies (like wrongly reported missed payments).
   
3. Affordable deposit – Aim for at least 10% of the car price.
   
4. Manage your current debts – Clearing existing debts free up disposable income.
   
5. Keep income records – Payslips or bank statements help prove affordability.
   

By addressing these factors, your answer to Can you get Car Finance with Bad Credit shifts from “maybe” to “likely”.

Lenders who specialise in bad‑credit car finance

Some lenders cater for applicants with poor credit. Examples include:

• Evolution Funding
  
• Motonovo Finance
  
• Bumper
  
• Zuto
  

These are typically brokers who champion affordable deals for those with a lower credit score. Make sure they are FCA‑authorised by checking the Financial Services Register on the FCA website.

The cost of car finance with bad credit

Yes, you can get car finance with bad credit, but you’ll pay more over time. Interest rates often range from 9% APR upwards. Compare multiple quotes and ask brokers for the Representative APR. Avoid deals that hide fees or have excessive rates.

The Money Advice Service notes it’s vital to check the APR and monthly cost over the full term. Be realistic about what you can repay to avoid putting your credit under further strain.

Alternatives if finance is still rejected

Even if lenders say no, all is not lost:

• Save for a larger deposit – Even 15–20% can make a big difference
  
• Joint applications – A partner with better credit can help
  
• Improve your credit score – Use a credit‑builder card responsibly for 6–12 months
  
• Look into used cars – Cheaper vehicles reduce monthly repayments
  

By following these, your answer to Can you get Car Finance with Bad Credit moves from hopeful to achievable.

FAQs

Q: Does a guarantor affect my credit?
A: If the guarantor misses payments, it hits both your credit files permanently. Use this carefully.

Q: Will a bad‑credit car finance appear on my credit report?
A: Yes—every application, even declined, leaves a hard search on your file.

Q: Can I refinance later?
A: Yes—once your credit improves, you can refinance to reduce your rate or shorten the term.

Trustworthy UK resources

To support your journey:

• HMRC – For general tax and income guidance: gov.uk/hmrc
  
• FCA – To check if a lender is regulated: 
• MoneyAdviceService – Neutral guidance on finance:
• Citizens Advice – Support for credit issues:

These are flagship authorities that earn Google’s trust.

My personal tip

I’ve dealt with clients who’ve waved goodbye to lenders before. Often, a modest 10% deposit and a clear repayment plan helped them get accepted. If you ask me Can you get Car Finance with Bad Credit, I’d say: absolutely—if you prepare smartly.

Bonus tools for you

Before you apply, make sure you’ve got your tax and budget clear:

• Listen to Taxman Calculator
  

These are free and made for UK drivers like you!

Final words

So, Can you get Car Finance with Bad Credit? Yes—with thought, preparation, and reliable support. Always compare APRs, stay within your means, and use official UK resources. If you’re ready for finance, use the tools and tips above—and remember, building better credit now sets you up for a brighter future.

Wishing you all the best in your car‑buying journey—drive safely!