There’s nothing more disheartening than dreaming of a brand new car, only to have your finance application declined. Before you feel too deflated, remember that it’s not necessarily the end of the road. There are various reasons why car finance applications can be turned down and understanding them can help improve your chances of success next time.

In this article, we’ll explore five possible reasons you’ve had your car finance declined and offer some expert tips on how to turn the tables.

1. Poor credit history

One of the most common car finance decline reasons is a poor credit history. Lenders rely on your credit score to assess your trustworthiness as a borrower. A history of late payments or defaults can drag down your credit score and make lenders cautious about approving your application. To improve your chances, consider building a better borrowing history before submitting your next application.

2. High debt-to-income ratio

Lenders not only look at your credit score but also your debt-to-income ratio. This number measures the percentage of your monthly income that goes towards debt payments. Multiple existing loans like credit card balances, a mortgage or other financial commitments can negatively affect your ability to take on additional auto finance debt. Reducing your existing debts or increasing your income can help lower this ratio and make your application more appealing to lenders.

3. Unrealistic expectations

Lenders want to ensure you can comfortably manage your leasing or car finance payments. If your income doesn’t meet their affordability criteria, your application may be declined. For example, it’s unlikely you’ll be approved for a £60,000 car loan on a £30,000 salary. Before applying for car finance, assess your budget and factor in all monthly expenses to determine how much you can realistically afford. Yes, that brand new Audi SQ5 Sportback set to launch in 2024 is a dream. But if it doesn’t match your borrowing power there’s a high chance you’ll have your car finance declined.

4. Lack of employment stability

Stable employment is one of the most important things lenders consider when assessing car finance applications. If you’ve recently changed jobs, have gaps in your employment history or work on a temporary or freelance basis, lenders may view it as a risk factor. Having a consistent job and income history can increase your chances of approval.

5. Applying with multiple lenders

When you apply for car finance each lender carries out a ‘hard’ credit check as part of the screening process. Multiple hard searches in a short period can negatively affect your credit score and make lenders wary. If you’re declined by one lender and immediately apply with another, you may be seen as a high risk borrower.

This is why it’s important to be strategic when it comes to car finance. Working with a broker like My Car Credit can help you establish your borrowing power before sending through an application. Instead of a hard search, we’ll take a ‘soft’ approach that doesn’t leave a mark on your credit score.  

Tips to boost your application

Car finance declined? Here are some expert tips to boost your chances and get your application over the finish line:

Choose the right lender

Different lenders have different approval criteria. Some specialise in car finance for poor credit and others focus on prime borrowers. Finding a lender that aligns with your credit profile will help improve your chances of success.

Save for a larger deposit

A larger upfront deposit can reduce the amount you need to finance and make your application more attractive to lenders.

Secure a guarantor

If your credit history is a concern, asking a financially responsible guarantor to co-sign your car finance agreement can improve your approval chances.

Review your budget

Make sure your budget is realistic and that you can comfortably afford the monthly payments before applying for car finance.

Improve your credit score

A proactive approach to improving your credit score can open doors to better car finance options in the future.

Car finance declined? We’re here to help

We love a good challenge at My Car Credit, which is why we’re happy to work with applicants who have been declined in the past. Instead of giving up, we see rejections as an opportunity to assess your financial situation and address outstanding issues. Plus, we work with a large panel of lenders which makes it easier for us to push through applications.

Give us a call on 01246 458 810 to find out more or email us at

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating


  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed


  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs


  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit


  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past


  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan

X monthly repayments of

Typical rate

Loan amount

Total payable




*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

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!