Car Finance On Benefits

Car Finance

Rates from 10.9% APR. Representative APR 19.9%

Rates from 10.9% APR. Representative APR  19.9% Representative Example: Borrow £6,000 with £1,000 deposit over 48 months with a representative APR of 19.9%, the monthly payment would be £182.26, with a total cost of credit of £2,748.61 and a total amount payable of £8,748.61. Car Loans UK is a broker not a lender. This is an example only, all finance subject to status. Lender fees may apply.

What Is Car Finance On Benefits?

Buying a car is a major expense and not everyone can afford to own one outright. Because of this, many people will opt to purchase a car through car finance. Car finance allows you to spread the overall cost across more manageable monthly repayments, making buying a car more achievable. To get car finance you will need to make an application. While it can be more difficult, it is possible to get bad credit car finance on benefits.

Car Finance

Use our finance calculator

Find out how much you could borrow

Rates from 10.9% APR. Representative APR  19.9% Representative Example: Borrow £6,000 with £1,000 deposit over 48 months with a representative APR of 19.9%, the monthly payment would be £182.26, with a total cost of credit of £2,748.61 and a total amount payable of £8,748.61. Car Loans UK is a broker not a lender. This is an example only, all finance subject to status. Lender fees may apply.

How Does Car Finance Work?

Car Finance

The Initial Deposit

This step isn’t always required. Although, placing down a deposit when completing a car finance agreement is highly recommended.

Mercedes Interior

Repayment Plans

Depending on the agreement that has been put in place for example HP, PCP & CS, your repayment plan may vary.

Car Finance

Contract Completion

Upon completion of your contract, you will then have a number of different options available to you. Which we will state below.

Everything You Need To Know With Car Finance On Benefits

It’s a general assumption that being on benefits or having bad credit, stops you from obtaining car finance. The general thought is that if you are on benefits, your income can’t sustain the payments. Contrary to this, many people receiving benefits are also holding down a steady job.

The Lenders

Lenders are notoriously risk-averse and tend not to want to lend money if there’s a chance they won’t receive their repayments. Those on benefits tend to have a more limited income and may find it hard to meet repayments. Because of this, they could fall into a risky category for lenders which results in higher interest fees. Less scrupulous lenders could exploit borrowers, so it is always best to shop around for the best deal.

According to the Department of Work and Pensions, there were 20 million people claiming benefits as of 2019. You will not be the only person seeking car finance on benefits.

Some car finance companies will look at your overall finances, including the amount you receive for benefits. Bad credit isn’t always a bar either; lenders may be understanding about County Court Judgments, debt and defaults, and in some cases unemployment. At CarLoansUK, we have made the application process as simple and stress-free as possible.

Your overall spending would be grossly over-inflated by extortionate interest charges, making keeping up with repayments harder.

A very low, or non-existent interest rate is also something to watch out for; this may mean the cost of the loan is bundled into the overall price of the car itself. This makes it much harder to determine whether the car is of good value. To make sure, it is worth taking the time to get other quotes to compare. Put in the same information such as a type of finance, deposit, repayment length, etc.

A guarantee

It is an offense for a lender to say they can waive the results of a credit score and guarantee a loan as set out in the Consumer Credit Act, 2010. If they are happy to break these rules, the chances are they will not follow other equally important regulations. Avoid these lenders as they could cause you no end of trouble.

Fees

If a company charges you an application fee, it may be best to go elsewhere. Often, even when it’s stated the fee is refundable, in reality getting the money back can be hard. Some lenders will charge up to £300.

It is illegal to deny you your rights to a vehicle if you are on benefits due to your physical or mental condition. If a lender ever uses this reason for not going forward with your application – avoid them. If we are in control of your application here at CarLoansUK, we will take all of the necessary steps if we ever come across a lender of this nature. In saying this, most lenders are aware of these rules and will be sure to stick to them. Especially those lenders in our database.

The Latest From Car Loans UK

Dreams On Driveways

Car Loans UK © 2024 All rights reserved

Car Loans UK is a trading style of BMG FG (UK) LTD, a company registered in England and Wales. (Company number: 12382512, Registered Address: 4th Floor, Kingsgate, Wellington Road North, Stockport, Cheshire, SK4 1LW. We act as a credit broker and not a lender and are authorised and regulated by the Financial Conduct Authority for consumer credit FCA no.928674. Car Loans UK can introduce customers to a limited number of finance providers based on overall credit profile and we receive a commission for such introductions, this will not impact the rate you are provided. We do not charge a fee to the customer for arranging the finance. This is a fixed payment or percentage, but can vary by lender. Further information is available on request. Written quotations on request. All finance subject to terms and status Data Protection Registration No.ZA766848.

Car Loans UK logo containing blue, black and white