Bad Credit Car Finance
All circumstances considered, apply without affecting your credit score.
Rates from 9.9% APR.
Representative APR 10.9%
At My Car Credit, we get questions all the time about whether it’s possible to secure car finance with bad credit. Whether you have CCJs, IVAs, loan defaults or missed payments on your account, don’t stress – it’s entirely possible to secure bad credit car finance!
Admittedly, a bad credit rating makes securing car finance harder, but not impossible. What’s more, by working with a broker like My Car Credit, you can improve your likelihood of finding bad credit car finance.
Our access to the largest panel of car finance lenders out of any UK broker means we can connect applicants with bad credit to specialist lenders who will consider your individual circumstances.
Can I get car finance with bad credit?
Yes, it’s more than possible to secure bad credit car finance.
At My Car Credit, we understand that sometimes you haven’t had adequate time to build up a reasonable credit history. Our approach centres on looking at you as an individual and not just as numbers on a bad credit score.
Regardless of whether your bad credit history has been caused by CCJs, IVAs, mortgage defaults or late bill payments, we remove judgement from your application and try all possible routes to find a car finance option that works for you.
What are the reasons for having bad credit?
There are any number of reasons why you might have bad credit, but some of the most common include:
- Missed or late payments on bills or credit cards – Missed or late payments will remain on your credit profile for a period of time, reducing your access to favourable finance agreements.
- County Court Judgments (CCJs) – A CCJ is a formal notice from the County Court which indicates when a lender has taken legal action to recover a debt. It can lower your credit score and make you seem riskier for future loans.
- Individual Voluntary Arrangements (IVAs) – IVAs are a legally binding agreement that indicates an individual’s commitment to paying back creditors over an agreed period. Like CCJs, they remain on your credit score for a number of years and lower your overall credit rating.
- Bankruptcy or debt management plans – Much like CCJs and IVAs, either bankruptcy or an indication of debt management plans will lower your overall credit score, making you a riskier future loan prospect to lenders.
- High credit utilisation or too much borrowing – Using a large amount of your available credit (high credit utilisation) can negatively impact your credit score. Lenders will view it as indicative of poor credit and debt management.
- Little or no credit history (thin file) – Minimal credit history can reduce your overall score.
- Irregular income (self-employed or gig work) – If you’re self employed, freelance or a gig worker, this can make securing car finance more challenging (but not impossible).
There are plenty of people with poor or bad credit scores. At My Car Credit, we look at each individual applicant, removing judgement to help applicants find suitable car finance for bad credit, whatever the circumstances.
How bad credit car finance works with My Car Credit
As a car finance broker, we’ve got access to a wide range of specialist lenders willing to consider every applicant’s profile on a case-by-case basis. This improves your likelihood of finding car finance with bad credit – we look at the person, not their numbers.
Securing car finance for bad credit is a speedy, straightforward three-step process:
- Apply online – Use our online application form for a quick answer on bad credit car finance. Our initial search is only soft, meaning it won’t impact your overall credit score.
- Choose a car – Now you’ve got a sense of your budget, you can find your next car from a reputable dealer. Alternatively, use our My Car Search to shop quality, pre-approved nearly-new and used vehicles.
- Sign the paperwork and drive away – We’ll manage any last-minute liaison with the lender and you can approve the paperwork online from the comfort of your own home. We’ll then transfer the funds the next working day and you can collect your new drive.
Any initial quote from us for bad credit car finance is no obligation and it won’t impact your overall credit score.
What lenders look at with bad credit applications
If you’re applying to finance a car with bad credit, lenders will typically conduct more thorough searches of your profile and background.
Typically, they will focus on the following when considering bad credit applications:
- Affordability checks – You should be ready to disclose your monthly budget with lenders, outlining your debt-to-income ratio and regular expenditure and outgoings.
- Credit history details – Your credit history will play a significant part of a lender’s overall evaluation, as it indicates your past financial record and borrowing behaviours. However, your credit history isn’t the only factor that lenders will evaluate for bad credit car finance.
- Stability – By providing details like your address and employment status, you’ll be improving your overall stability in a lender’s eyes.
- Deposit amount – Having a deposit can help in securing car finance with bad credit. It’s not essential, but having a deposit shows lenders that you’re serious about the application and can improve the rates you may be offered.
- Vehicle value/age – The value and age of a vehicle determine the lender’s evaluation of loan risk.
Improving your chances of getting approved
If you’re looking to finance a car with bad credit, don’t panic – there are ways of improving your overall profile that may increase your chances of getting approved:
- Save for a deposit to reduce lender risk – Saving for a deposit has multiple advantages. It will reduce the amount you need to borrow, but also shows a lender you’re committed to the purchase and willing to take on some of the risk.
- Show affordability with bank statements – Lenders will use your bank statements to gain a comprehensive overview of your monthly expenses. Reviewing your budget before applying will give you a better sense of your income versus your outgoings, ensuring you stand in the best possible stead when applying.
- Consider a cheaper or used vehicle – If you choose a cheaper or used vehicle, your overall loan and any interest rates will be lower. Borrowing a smaller amount can therefore increase your likelihood of acceptance for bad credit car finance.
- Pay bills on time to show responsibility – A tried and tested strategy for improving your credit score is paying off your bills on time. This shows you’re responsible with money and will benefit your application.
- Apply through a broker like MCC – As part of the UK’s largest motor finance broker, we’ve got a wide panel of lenders who specialise in areas like bad credit car finance. This gives you access to a wider choice of lenders, which can help in finding a suitable agreement for your circumstances.
Car finance for bad credit
Hire purchase (HP)
Hire purchase (HP) car finance continues to be one of the most popular auto finance agreements available. With fixed monthly payments for budgeting predictability and vehicle ownership at the end of term, HP appeals to Brits with a wide range of credit profiles. But for applicants with bad credit reports, HP offers a higher chance of approval compared to other finance agreements.
Personal contract purchase (PCP)
Personal contract purchase (PCP) offers lower monthly payments compared to HP and more flexible options at the end of term. Those looking to finance a car with bad credit are less likely to secure PCP finance – but it is still possible.
Used car finance
Used car finance from My Car Credit offers a practical route for applicants hunting for car finance with bad credit. You’re more likely to be approved thanks to better affordability – and your vehicle won’t experience such significant depreciation compared to a new make and model!
A quick and hassle-free process
Get approved
Use our car finance online application form for a quick answer on car finance. Our decision using soft search won’t impact your credit score!
Find a car
Find your car first or apply for car finance and then find a car – so long as it’s from any reputable car dealer.
Sign & Collect
Approve your paperwork online, from the comfort of your home. We’ll transfer funds next working day, and you’re ready to collect your car!
Car finance for bad credit – step by step
Apply Online
Our application form is short and easy to fill out in a few minutes. You’ll provide us with basic personal information and we’ll carry out an initial soft credit search, giving you an instant online decision.
Choose Your Car
Once you’ve got a sense of the budget you’re working with, you can shop around for your car. Choose any reputable dealer or make use of our one-stop shop of quality, pre-approved vehicles. We’ll help ensure that both the vehicle and dealer are above board and trustworthy.
Drive Away
We’ll help you complete the final paperwork, handling liaison between you, the dealership and our lenders. Once all the parties are happy, you get to collect your keys and hit the road.
Why choose My Car Credit for bad credit car finance?
A large lender panel
We’ve got access to a wide panel of lenders, many of which are specialists in car finance for bad credit. This improves your likelihood of securing an agreement that’s most appropriate for your circumstances.
No impact on your credit score
Any initial search that we perform at the application stage is a soft search. As such, it won’t impact your overall credit score by leaving a mark on your report.
Fast, simple online process
Our application process has been designed to save you time and stress. Apply online anytime and benefit from no obligation, quick decisions on your eligibility for bad credit car finance.
Support from specialists
Our team of dedicated car credit specialists are on hand to guide you through the process from initial application to picking up your keys. They’re there to offer support and expertise from the get-go.
Apply for car finance with bad credit today
At My Car Credit, we pride ourselves on taking a whole-picture look at applicants. By looking at the person rather than their numbers, we can help even applicants with bad credit secure suitable car finance. In fact, even if other lenders have said no, My Car Credit may still be able to help you find car finance for bad credit.
Check your eligibility in minutes with no impact on your credit score, and find out if you can secure car finance with bad credit via My Car Credit.
Approachable bad car credit specialists
When you apply for car finance with My Car Credit, you will be assigned your own Car Credit Specialist. All our specialists are experienced in handling bad credit car finance and will help to guide you through the entire process to make your experience stress-free. They are also on-hand to give you advice and guidance for improving your bad credit profile.
You can also get a FREE credit report from Experian.
At My Car Credit, our team have a reputation for their openness and professionalism – we have helped lots of bad credit customers to secure car finance for their dream car. Don’t take our word for it: read some of our customer feedback below!
Bad credit car finance FAQs
It’s possible to secure car finance with CCJs – but you may face higher interest rates and a more challenging application process. Applying for bad credit car finance via a broker like My Car Credit can increase your likelihood of acceptance thanks to our access to a wide panel of specialised lenders.
You don’t need a guarantor if you’re applying for bad credit car finance – but it may help your chances of securing a suitable agreement. A guarantor acts as a third party who agrees to make repayments for you if you can’t, so it’s a serious responsibility that shouldn’t be undertaken lightly.
Typically applicants looking for car finance with bad credit will face higher interest rates compared to applicants with better credit scores. Lenders will charge these higher rates to offset the risk of bad credit applicants defaulting on the loan.
Bad credit car finance may help you rebuild your credit if you make your repayments in full and on time. By repaying your monthly installments in a timely fashion, you’re proving your reliability as a borrower, which can slowly increase your credit score over time.
Require more help?
Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!