Car Finance Pre-Approval: Does Everyone Get Accepted?

Many buyers are unsure if they qualify, but securing pre-approval for a car loan is the first step in anyone’s car finance journey. Lenders will look into your personal details and use these to give you an initial approval or approval in principle. This indicates the likelihood of your formal acceptance for a car finance agreement.

This article will answer your questions on securing pre-approved car finance. We’ll break down exactly how the process works, who gets accepted and how to improve your chances of pre-approval.

What is car finance pre-approval?

When you first apply for car finance, you’ll need to give us some of your personal information. Lenders will then use this information to give you a provisional decision on your likely acceptance for car finance. In other words, if you secure car finance pre-approval, you’ve been approved in principle for car finance acceptance.

Be aware that car finance pre-approval does not guarantee that you’ll ultimately be approved for a finance agreement – it’s a provisional decision. 

Lenders ultimately make their decision to offer you pre-approval based on the information you provide at the time of application. So, car finance pre-approval is not the same as final approval, which will only come once you’ve chosen a vehicle and all contracts are drawn up.

When you first apply for car finance, we’ll ask you for the following information:

• Details about your income and employment status
• Your credit history
• Personal details, including your address history for the past three years

We then use this information to perform a soft credit check. This initial check assesses your car finance affordability, and won’t impact your overall credit score.

We then decide whether you’re eligible for car finance pre-approval.

Securing pre-approved vehicle finance can help you in your search for the most suitable agreement and car for your needs. It gives you an insight into the budget you’re likely working to, allowing you to shop with confidence.

Does pre-approval guarantee car finance?

As mentioned above, securing car finance pre-approval is not the same as final approval. In other words, pre-approval for car finance does not guarantee your ultimate acceptance.

Lender decisions for pre-approved car finance are based on the information you provide at the time of application. Any changes in your circumstances since receiving your pre-approval can therefore change your eligibility. 

Moreover, your final approval for car finance will only be made after the following checks:

• Hard credit check – Unlike a soft credit check, a hard credit check will leave a mark on your credit score. A hard credit check ultimately confirms your car finance eligibility.
• Proof of income and ID – You’ll need to provide all necessary supporting documents to secure car finance final approval. This helps protect both you and the lender from fraud.
• Vehicle eligibility – Any lender will want to confirm the eligibility of the car for finance, and that it suits the lender’s criteria. 

Be aware that your pre-approval and finance terms may change after a full assessment of your background and circumstances. 

Does everyone get pre-approved for car finance?

Whether you’re eligible for car finance pre-approval will depend on your circumstances. Not everyone can secure pre-approved car finance – eligibility usually depends on the following factors:

• Credit score – Your credit score will impact your likelihood of car finance pre-approval. Applicants with poor credit are less likely to secure pre-approval.
• Past defaults/CCJs – If your credit report indicates past loan defaults or CCJs, it will be more difficult to secure pre-approval.
• Employment status – A lack of employment stability can impact your chances with pre-approval as lenders will consider you more of a risk.
• Affordability checks – Your credit report is critical to your likelihood of securing car finance pre-approval – but so is your affordability. Put simply, can you afford the repayments of your agreement?
• Accuracy of application info – Providing accurate, up-to-date information when you first apply is essential for pre-approval.

Why might someone not be pre-approved?

There are a number of reasons why you may not secure pre-approved vehicle finance. The most common include:

• Poor or non-existent credit history – If your credit history is patchy or poor, you’re less likely to secure pre-approval.
• High existing debt or recent missed payments – Missed payments or lots of debt indicate you’re a higher risk borrower.
• Very low or unstable income – Low or unstable income reduces your car finance affordability.
• Not being on the electoral roll – Lenders view registering to vote favourably when considering car finance pre-approval.
• Mistakes or gaps in application – Any mistakes in the information you provide on application will delay the process, impacting your likelihood of pre-approved car finance.

Just because you haven’t secured car finance pre-approval doesn’t mean you won’t secure car finance! There are a number of ways to improve your car finance eligibility… 

How to improve your chances of getting pre-approved

These are the practical steps that you can take to increase your likelihood of getting pre-approved car finance:

• Check your credit report and fix any errors – One of the best ways to improve your chances of car finance pre-approval is by fixing any errors on your credit report.
• Lower your credit usage and pay off small debts – Lowering your credit utilisation and paying off your debts on time helps make you a more viable loan candidate.
• Register on the electoral roll – Lenders will check whether you’re registered on the electoral roll to protect themselves against fraud.
• Provide accurate employment/income details – Providing accurate personal information and proof of income all increase your likelihood of pre-approved vehicle finance.
• Consider a lower loan amount or longer term – Both will improve your chances of pre-approved car finance.
• Work with a broker like My Car Credit for better lender access – With access to the largest lender panel of any UK broker, we’re more likely to get you car finance pre-approval.

Benefits of getting pre-approved

• Know your budget upfront – With pre-approved vehicle finance, you’ll know the budget you’re working with.
• Shop for cars more confidently – Knowing your budget means you can shop for your next vehicle with confidence.
• Less risk of being declined later – Although pre-approval doesn’t guarantee final approval, the likelihood of not being accepted for car finance is lower.
• Potential to secure better interest rates – You’ll get access to better interest rates and more bargaining power with car finance pre-approval.
• Avoid multiple hard credit checks – Unlike soft searches, hard credit checks show up on your credit report and can drive your score down.
• Speeds up the buying process – Securing pre-approval streamlines the financing process.

Why choose My Car Credit for car finance pre-approval?

At My Car Credit, we work hard to improve your chances of securing car finance pre-approval.

You’ll gain access to the UK’s largest lender panel, benefitting from fast decisions, no paperwork and friendly, expert support throughout the process.

An initial soft credit search won’t affect your credit score, and we work with drivers with all kinds of credit backgrounds to ensure an inclusive approach to car finance.

Plus, you can use our car finance calculator to see what kind of agreement you could access through us.

Car finance pre-approval FAQs

Is pre-approval the same as final approval?

Car finance pre-approval is also known as a decision in principle. It’s a provisional decision that indicates your likelihood of formal acceptance for car finance – but it doesn’t guarantee final approval.

Will pre-approval affect my credit score?

Different lenders conduct different credit checks when you first apply for car finance. At My Car Credit, we conduct initial soft searches, meaning that securing car finance pre-approval won’t affect your overall score.

Can I get pre-approved with bad credit?

It’s harder to secure pre-approved vehicle finance with bad credit. Thankfully, there are ways to improve your likelihood of pre-approval, including fixing any errors on your credit report and working with a broker like My Car Credit.

Can I apply before choosing a car?

It’s sensible to apply for car finance pre-approval before shopping for your car. That way, you have a better sense of the rates you’re more likely to qualify for, and can shop with confidence knowing the budget you’re working with.

How long does pre-approval last?

The length of time that car finance pre-approval lasts will vary between different lenders and brokers. At My Car Credit, we’ll give you a no-obligation car finance quote in mere minutes, thanks to our speedy application process.

Ready to check if you’re pre-approved?

By applying for car finance with My Car Credit, you’re gaining access to the UK’s largest panel of motor finance lenders as well as a professional team of car finance experts. 

You can fill out our online application form in minutes, and our initial soft credit check won’t impact your overall score. 

Plus, our inclusive approach to car finance means we can even support drivers with poor credit. Apply now or contact us to find out more.