Car Finance Adequate Explanation Videos

Man watching car finance explanation videos on a laptop in cafe

Hire Purchase (HP) or Conditional Sale Explanation

Personal Contract Purchase (PCP) Explanation

Fixed Sum Loan Agreement Explanation

My Credit Rating

Excellent

  • 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

Good

  • 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

Fair

  • 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

Poor

  • 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

Bad

  • 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
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 23.9%, annual interest rate (fixed) 23.88%, 47 monthly payments of £234.69 followed by 1 payment of £244.69, total cost of credit is £3,775.12, total amount payable is £11,275.12.

My Car Credit is a credit broker and not a lender.

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!

Car Finance Jargon Buster

Row of cars outside of dealership
My Credit Rating

Excellent

  • 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

Good

  • 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

Fair

  • 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

Poor

  • 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

Bad

  • 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
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 23.9%, annual interest rate (fixed) 23.88%, 47 monthly payments of £234.69 followed by 1 payment of £244.69, total cost of credit is £3,775.12, total amount payable is £11,275.12.

My Car Credit is a credit broker and not a lender.

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!

What paperwork do I need to get a car on finance?

Woman signing her car finance paperwork

Applying for something finance-related can be daunting for anyone – finding all the paperwork and information that’s otherwise tucked away in a drawer or cupboard can be an overwhelming task. So, here at My Car Credit, we try to make it as easy and straight forward as possible. As with any other kind of finance application, car finance does require a lot of paperwork, but don’t worry because we are here to assist you with that – every step of the way. Here’s a breakdown of all the paperwork and information you’re going to need when applying for car finance with us.

Before the paperwork

We like to start your car buying journey on the right foot, which is why we only require you to complete a simple online application form to begin your car finance journey. This usually takes less than three minutes and asks you for some simple information such as your full name, date of birth, marital status, residential status and your address history for the last three or so years.

Once this has been completed and you have received your online decision on-screen (as well as by email and text), your personal Car Credit Specialist will be in touch to guide you through the whole of your car-buying journey.

To be able to help you with this, your Car Credit Specialist will require some initial paperwork from you.

Driving licence

Your driving licence will be required regardless of any other circumstances.

We need a clear, scanned picture of your driving licence. Alternatively, you can post it to us – don’t worry, we will keep this safe for you and will return it once we are happy that it is your own driving license and that you are qualified to drive the car that you are looking to buy.

Your driving license also acts as proof that you will be the owner and registered keeper of your new car.

A selfie

In order to prove that you are who you say you are in your application, we may ask you to provide a selfie of you holding your own driving license.

With the rise of technology, we have chosen this as a convenient way for you to prove your identity and a good way for us to be protected against fraud.

Proof of employment and earnings

My Car Credit require information on your employment and earnings, so that we can treat you fairly, as a person and a customer. We need to be able to see that you can manage your finances and can afford the agreement you are looking to take out – this is known as an ‘affordability check’. Essentially, we do this to make sure you are protected from getting into any financial difficulty in the future.

To begin your affordability check, we will need you to provide the names and addresses of all of your employers for at least the last three years (sometimes longer if you have frequently changed jobs, or have gaps in your employment history).

You may also be required to prove your earnings, which will require you to send us copies of your payslips, usually accounting for the last three to six months’ wages. This is a simple safety precaution to make sure that your wages are being paid to you.

We might ask you to provide bank statements dating back for a certain period to show your income. If most of your income is cash and doesn’t show up in your bank statements, you may need to show other information to back up your income claims (such as tax return information).

Alternatively, for your convenience, we may ask you take a clear photograph/clear scanned copy and email them to us. However, the copies must be clear enough for us to be able to read all of the details on them.

Bank account details

We will also need the bank account details for the account you will be using for your monthly payments. You will need to provide us with the branch’s address and sort code, as well as your account number.

The account usually needs to be in your name (or jointly in your name). Again, if you have less than three years with your current bank, you will probably need to provide previous bank details.

Where you have a joint bank account with a spouse, we may also need some financial information from them.

Additional information

If there are issues with any of your documentation, your personal Car Credit Specialist will advise you (and in some cases, require you) to give extra information to us. This isn’t uncommon and it’s certainly nothing to worry about.

The requirement for additional information can result from a number of circumstances. It can occur because you have recently moved to the UK and are therefore unable to provide three years residence information. In this case, you may be asked for overseas checks. Alternatively, younger drivers that may not have the relevant employment or credit history, might be asked to submit a guarantor’s information as well as their own.

There are a number of circumstances that may require the submission of additional information, and this should not be seen as a negative sign for your car finance. We only ask for this information to make sure we get the best finance deal for you, and to improve your chances of being accepted.
It is also important to take note that the types of paperwork we will require can differ depending on your credit profile and the lender we are able to match you with.

Here at My Car Credit, we want you to be in your new car as soon as possible so we are trained to help and advise you. Get in touch with any questions or why not start your car buying journey now and click here to apply with My Car Credit?

My Credit Rating

Excellent

  • 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

Good

  • 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

Fair

  • 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

Poor

  • 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

Bad

  • 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
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 23.9%, annual interest rate (fixed) 23.88%, 47 monthly payments of £234.69 followed by 1 payment of £244.69, total cost of credit is £3,775.12, total amount payable is £11,275.12.

My Car Credit is a credit broker and not a lender.

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!

Is there a cooling off period when you sign up for car finance?

Vehicle skids around during cooling off period

Be honest with yourself, at some point you’ve judged somebody by the car that they drive. We know you shouldn’t judge a book by its cover but sometimes it’s far too fun! So, here’s some of the car brands and stereotypes people have about them.*

Whether you have rushed into your agreement or you’ve found a better deal elsewhere, you should be able to cancel your car finance agreement for up to 14 days after you signed on the dotted line. This two-week period is known as a ‘cooling off period’.

Cooling off periods

Under the Consumer Credit Act, you should have 14 days to withdraw from a credit or loan agreement. This is applicable to all finance agreements, regardless of whether you made it in person with the lender, over the phone or on via an internet process.

The 14-day period begins on the day you sign/agree to the contract, when you receive a copy of the agreement or from when you get a notification from your bank records that you have received the loan.
This applies to any Hire Purchase, Personal Loan or Personal Contract Purchase that amounts to below £25,000. Any higher amount will be susceptible to the terms and conditions of the agreement and/or the lender’s decision. In addition, the right to withdraw does not apply to any loan above £60,260.

How to cancel a loan agreement

You will have to provide a notice of your withdrawal either in writing or verbally. Most often you will have to repay any interest that has occurred between taking out the loan and repayment.
The deposit you can pay to secure some car finance deals will often be kept by the car finance lender. It is possible to get this back under special circumstances (i.e. if there has been unlawful conduct or you have signed the contract away from the premises) but it is highly unlikely.

Returning the car

Whilst you can cancel a car finance agreement, you will not always be able to return the car and receive your money back. If you have bought your car on the premises of a car dealership and signed a vehicle form at that location, you must pay for the car in full within 14 days, or within the specified time limit agreed in your contract via an alternative finance option. This is because a vehicle order form is a binding contract.

There are two exceptions to this rule: if you bought off-premises (i.e. via the phone or internet) and you did not sign a vehicle order form from the dealership, or if the car is not as specified in the contract (i.e. it’s different in specification or it is faulty).

We know that sometimes rash decisions can be made and you can jump into a car finance agreement without taking enough consideration. This is one of the main reasons that a ‘cooling period’ was created. However, it’s always important to know exactly what your options are in the event that you need to cancel a finance agreement. We hope this has given you more understanding of those options, for more information visit the GOV website here.

My Credit Rating

Excellent

  • 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

Good

  • 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

Fair

  • 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

Poor

  • 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

Bad

  • 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
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 23.9%, annual interest rate (fixed) 23.88%, 47 monthly payments of £234.69 followed by 1 payment of £244.69, total cost of credit is £3,775.12, total amount payable is £11,275.12.

My Car Credit is a credit broker and not a lender.

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!

Can I get car finance without a credit check? (a complete guide)

Man using phone to check for car finance without credit check

If you want to apply for car finance but suspect you may have a poor credit profile, or no credit history at all, you may be wondering “Can I get car finance without a credit check?”. The reality is that all regulated lenders perform credit and affordability checks as part of their commitment to responsible lending. However, this shouldn’t put you off applying. There are plenty of finance options for those with less than perfect credit files. It is also possible to check your car finance eligibility using soft search.

Why do lenders do a credit check?

Lenders do credit checks to understand your financial behaviour and assess your history of handling your finances. They will be assessing your ‘creditworthiness’, or your suitability to receive financial credit. This is often based on how reliable you have been at paying back money in the past.

Lenders have an obligation to lend money responsibly. It can be frustrating knowing that your finances and credit profile will be scrutinized but this ensures that you are not lent more money than you can afford (called ‘affordability’), and that the finance product you are sold is suitable for your circumstances.

Whilst there are some payday lenders who will offer finance without a credit check, you will be charged enormous rates of interest to accommodate the increased risk of lending. This can be unaffordable for larger loans, such as buying a car.

By having a credit check done, this ensures you are offered the correct rate of interest for your circumstances, rather than over-paying.

Soft search versus hard search

When shopping around for car finance, customers can be concerned about damaging their credit profile through multiple hard searches.

To avoid this happening, and to make it easier for you to shop around, when you first apply for car finance with My Car Credit, we only do a soft search credit check. This allows us to do preliminary background checks to establish your eligibility for car finance.

The important thing about soft search is that it doesn’t show on your credit file. This means that they don’t impact on your credit score, and they don’t affect your future chance of securing credit. You can have as many soft searches as you like, and only you can see them on your report.

A hard search happens when you have confirmed that you are eligible for car finance, and are happy to proceed with your application.

A hard credit check will show on your credit file. It is worth bearing in mind that too many hard credit checks over a short period of time can affect your future ability to secure finance. This is because they tell lenders that you have applied for credit, and therefore may be a higher risk.

The great thing about using soft search first is that you can establish your eligibility for car finance before you move ahead with a full search. When you then go on to secure car finance, so long as you keep up your repayments, you may actually improve your credit rating. You can even repair your credit file if it is damaged!

What’s involved in a credit check?

When you apply for credit or a loan, the lender will perform a credit check (sometimes called a credit search) so that they can look at the financial information held on your credit report.

Your credit report will show information such as:

  • Your name and date of birth.
  • Your current and previous addresses.
  • Whether you are on the electoral register.
  • Your credit accounts, including bank and credit card accounts, outstanding loan agreements or utility company debts. Late or default payments will show, and stay on your credit report for at least six years.
  • Financial associations. These are people you are financially linked with through joint credit.
  • Public record information. This covers
  • County Court Judgments (CCJs), bankruptcies and individual voluntary arrangements (IVAs). These stay on your report for at least six years.
  • Banks and building societies. Only your overdraft is shown, not your balances or savings.
  • Any convictions of fraud, or if someone has stolen your identity and committed fraud.

Details such as salary, religion, or criminal convictions (other than fraud) are not included.

How can I check my credit profile?

You may want to check your credit profile before you start applying for car finance. Checking your credit profile doesn’t leave a mark on your file and it can help you understand what lenders will see.

It is also a great opportunity to improve your credit score by ensuring that all information held on you is correct and up-to-date. For example, ensuring that out-of-date financial associations don’t have a negative impact on your credit file.

Your credit score is an indication of the health of your credit file, and is usually scored out of 1000. The higher the score, the better your credit profile.

There are three main credit reference agencies in the UK – Equifax, Experian, and Transunion (formally Call Credit). They hold financial information on you, and are governed by the Information Commissioner’s Office or ICO.

Websites like Credit Angel allow you to access your credit report for free for the first 30 days (there is a fee of £19.99 after this, and you can cancel at any time).

What are my options if my credit score is poor?

My Car Credit has over 30 lenders on its panel and so the chances of getting you an acceptance are increased (although cannot be guaranteed!).

We have lenders that specialise in car loans for customers with damaged or poor credit. You will usually have to pay a higher interest rate, as you represent an increased risk for the lender. You can pay off your loan faster if you wish, and this can help to repair your credit file.

It can also help if you put down as large a deposit as you can afford, and keep the repayment term shorter. However, it’s important not to overstretch yourself on your monthly payments.

There is also the option of a Guarantor Loan. This is a loan where a third party that you trust (usually a family member or close friend) guarantees to make the repayments on a car loan if you fail to. You do remain responsible for the finance agreement.

Please be aware that if you fail to make the repayments, your guarantor will become liable. If your guarantor fails to make the payments, you could both be issued with CCJs, which would affect both your abilities to obtain credit in the future.

Whilst Guarantor Loans are a great way for someone with impaired credit to get car finance, they should not be taken lightly as they come with great responsibility. You can read more about Guarantor Loans here.

So, hopefully, we’ve shown you that credit checks are nothing to be worried about. It is more than possible to check your eligibility for car finance before you have a hard credit check, and credit checks ensure that lenders lend you the right amount, at the right interest rate for your circumstances. We hope this helps you feel more confident about applying for car finance to buy that car of your dreams!

My Credit Rating

Excellent

  • 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

Good

  • 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

Fair

  • 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

Poor

  • 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

Bad

  • 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
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 23.9%, annual interest rate (fixed) 23.88%, 47 monthly payments of £234.69 followed by 1 payment of £244.69, total cost of credit is £3,775.12, total amount payable is £11,275.12.

My Car Credit is a credit broker and not a lender.

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!