Car Finance With Bad Credit: Your Guide To Getting

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Joe Brayne

Car Prchasing Guru

Are you struggling to get a car finance deal that best suits your circumstances? Then bad credit car finance could be the answer. When you are looking to finance a car, you have three main options. These include Personal Contract Purchases (PCPs), Hire Purchases (HPs), and car loans. Having bad credit shouldn’t stop you from getting your dream car. Bad credit car loans are available to those with a poor credit history. You could even use them to purchase all types of vehicles. They’re also easy to apply for online and over the phone when you contact one of our passionate team members.

This guide will explain how bad credit car finance works, who is eligible for it, and what the benefits are. Plus, how you can find the best loan deal for you!

How Does Bad Credit Card Finance Work?

Bad credit car financing works the same way as regular car financing, but the process of getting approved is harder.

If you have poor credit, a lender will need to trust you can make the repayments on time each month. This means they’ll undertake a thorough financial check and ask for evidence of income. As well as proof that you’re able to afford the monthly payments. They’ll also typically want to see some form of security. This is so they know their money will be repaid if you default payments.

What Are The Benefits Of A Bad Credit Car Finance Loan?

If you’re looking to get a new car, but have a bad credit history, then bad credit car finance is the best option for you. Because it works similarly to regular car finance loans, you will go through the same process as someone who is applying for car finance with good credit. However, with bad credit car finance, more lenders might decline your application, but there are some that will accept applicants with bad credit. They may also be able to help make a payment plan that is suitable for you and can help you make repayments on time.

Bad credit car finance allows you to get car finance with bad credit if you have been refused before. It is important to not apply for car finance lots of times in a short period of time, because this can lower your credit score and make it more difficult for you to get accepted for car finance.

How Do I Find The Best Bad Credit Car Finance Deal?

When you’re trying to find the best bad credit car finance deal, it’s essential to understand what each of these terms means.

  • The APR is a measure of how much interest you’ll pay on your loan. If you have good credit and take out a loan with a low APR, it’ll be cheaper for you over time—but if you want to drive off in an expensive car but can’t afford it at this moment in time, then maybe it’s worth taking out a high-APR loan. Think about whether this is something that’s going to be worth paying more in interest every month until the end of the term (usually three years). Remember: if you have bad credit, you will likely get a loan with a higher APR, compared to customers who have better credit scores.
  • The deposit is essentially collateral against defaulting on your repayments. Having a deposit usually helps to lower your monthly payments because it goes towards the overall value of the car you are paying for. But, it is possible to get car finance with no deposit, this means your monthly payments may be more expensive to make up for the value not paid in the deposit. This type of car finance is easier to secure if you have good credit. Some lenders may offer bad credit and no deposit to customers. But this relies on the lenders, not all of them offer this option.

Is It Possible To Buy A Car Through Bad Credit Car Loan Finance If I Have No Deposit?

Yes, it is possible to buy a car through bad credit car loan finance if you have no deposit. If you have no savings or income to pay the deposit, your options are still available.

Your options
  • Get a guarantor: If you have a good friend or family member who will act as a guarantor for your car finance application and they own their own home and/or have an excellent credit rating, this can be used as security against the loan. This means that if you are unable to make payments on the vehicle, then they would be responsible for paying them instead of you. Don’t worry though, we also offer car finance for people with no guarantor.
  • Use your savings: Instead of using someone else’s money (your friend’s or family member’s), why not use yours? You could save up from any spare cash that comes in over time until enough has been accumulated so that there are now sufficient funds available for buying a car outright with no deposits required whatsoever!
  • Use income: Just because someone doesn’t work conventional hours doesn’t necessarily mean they don’t earn enough money every month! However, we understand that this may be difficult depending on your financial circumstances. Our specialist team could help you find the car of your dreams, for most financial circumstances considered.
  • Get joint finance: Like car finance with a guarantor, this means that you have someone else who is also responsible for making repayments. It will work best if you are financing your car with someone who has a good credit history. This is because you will be able to apply for better deals. However, some lenders will have requirements you will need to meet when applying for joint car finance. For example, you may need to live at the same address. Our experts will guide you through this process to see what could be offered to you with a joint finance agreement.

What If I Have No Credit History?

It may be possible for you to get car finance with no credit history. But bear in mind that this could mean some lenders may reject your application. When lenders assess your situation, they will see you as someone with bad credit if you don’t have a credit history. So, what you get offered may be similar to what people with bad credit will be offered when it comes to car financing deals. Due to this, lenders are less likely to offer your car financing if you don’t have a credit history because they have no way of knowing whether you will be able to repay the loan.

What If I Have An IVA?

An Individual Voluntary Agreement (IVA), is a way of repaying your creditors at an affordable price. It’s a legally binding payment plan between you and your creditors, you will need to stick to it and it could prevent you from being accepted for car finance. This is because you need to get permission from your IVA supervisor to take out another loan.

IVAs can negatively affect your credit score, meaning lenders may see you as less dependable for making monthly payments. On the other hand, some lenders may see you are committed to paying off your debts. Remember that it is possible to get car finance with an IVA. Make sure that you discuss this with your IVA supervisor before approaching one of our brokers. They will try their best to secure you your dream car, just make sure you get permission first.

Will A CCJ Affect My Chances Of Getting Car Finance?

A County Court Judgement (CCJ), is a high court judgement stating you owe money. It happens if someone takes court action against you saying you owe them money and you don’t respond. CCJs make a dent in your credit score because it shows you haven’t been able to make repayments to someone.

Unfortunately, whether you pay it off or not, it shows up on your credit record for 6 years. This can make it difficult for you to get a car on finance. This is because you are seen as unreliable to lenders. But it is possible to get car finance with a CCJ that has negatively affected your credit score. The best way to improve your chances of getting accepted for car finance is to pay off your CCJ before applying.

There are a few things lenders will take into consideration when it comes to assessing your financial circumstances when it comes to customers with CCJs.

They are:

  • The amount of the outstanding debts you owe
  • The length of time your debts have been outstanding
  • The type of debts you have- if it’s secured or unsecured

Luckily, there are some lenders that may offer your car finance if you have a CCJ held against you that isn’t paid off. It would be best to use a broker service that can find lenders that can assess your circumstances and accept your application for car financing. We can’t guarantee that you will be accepted, but it isn’t impossible to get car finance with a CCJ.

Which Car Finance Is Best For Me If I Have A Poor Credit History?

If you have a poor credit history, then you may be able to apply for a bad credit car loan. Bad credit car finance is a type of car finance that is available to people who have a poor credit history.

It’s best you talk to one of our team members to see which car finance is best for your circumstances

Even if you have been refused car finance elsewhere, you could get accepted when applying for car finance through us!

Am I Eligible For Bad Credit Car Finance?

You must be over 18, a UK resident, and have a regular income to be eligible for bad credit car finance. Even if your credit history is poor, there are still some lenders that may accept applicants with lower credit scores. You will be more likely to get accepted for bad credit car finance if you have a deposit to put down on your car.

Which Dealerships Offer Car Finance With Bad Credit?

Dealers licensed by the Financial Conduct Authority (FCA) can work with lenders or brokers to offer legal car finance. Including loans to people with bad credit. Dealerships will likely sell you a car if they know they’ll be paid by the lender. Therefore, the lender takes the risk.

We have a panel of reputable lenders that we work closely with to get you the best car finance deal, for most financial circumstances considered.

How Long Does The Process Of Applying For A Bad Credit Loan Take?

When you apply for a loan, the lender will ask you to provide them with some basic information. This includes your name, address, and employment details. The process of securing your car on finance will heavily depend on your circumstances and the lender you go with. Our brokers will do their best to match you with a lender that will offer you car finance that works for you and your finances.

The process of applying for a bad credit loan takes less than 24 hours and is usually completed within minutes. If you’re lucky enough to be approved in this time, then congratulations! You’ve just saved yourself a lot of time and stress by finding out straight away that your application was successful.

If your application does not get accepted on its first submission, don’t panic! There are plenty of other lenders out there who offer loans to those with poor credit, or even no credit.

Our team members are here to help you apply for car finance, whether you have good or bad credit. Use our car finance calculator to get a feel for what rates our lenders could offer you!

Can I Get A Brand-New Car With Bad Credit Car Finance

Definitely. The technicalities of financing new and used cars are similar, despite the fact that the cost of a new car is higher, and the monthly payment is higher. If there is a way you can prove that you can make monthly repayments, you will have a better chance of lenders offering you car finance with bad credit.


If you’re thinking about applying for a bad credit car loan, it can be a daunting prospect. However, with some research and preparation, it’s not as difficult as you might think. You just need to make sure that you do your research beforehand. As well as ensuring your finances are in order before applying for bad credit car finance. By applying for car finance through Car LoansUK, you can get in touch with one of our team members. They will aim to help you with any questions you may have. And, also they could help guide you through the process of getting car finance with bad credit. Get in touch with us, today!


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