Am I eligible for car finance?

Young people checking on ipad to see if they are eligible for car finance

Car finance is a great way of affording the car you want, allowing you to spread the cost of the purchase over a period of time. However, it can be difficult to know if this is the best option for you. We’re going to take you through everything that can impact your eligibility for finance so that you know where you stand.

Age

We know that ‘age is just a number’ but there are some restrictions on when you are eligible for car finance. The minimum age is 18, and the maximum age is 75. You must fit the age criteria from the beginning date of the agreement – i.e. you can be 17 and organise car finance with us as long as you’re 18 when your agreement starts.

Residency

You need to be a UK resident of more than three years. We do not usually accept temporary residents in the UK, but if you’re living in the UK and have an EU driving license, we may still be able to help. Also: To clear up a question we’re often asked – we do accept residents of Northern Ireland.

Credit score

Your credit score makes a big difference to your chances of being accepted and the terms of your agreement. The better your credit score, the more likely you are to have your car finance application approved and receive lower annual percentage rates (APR). An APR is the amount of interest you pay back for borrowing money from your lender.

If you have a poor credit score, you can still be accepted for finance but you may find that providing a deposit will help you to secure an agreement. There are also a number of ways to improve your credit score, which you can find out about here.

The vehicle

The vehicle you’re looking to finance must be less than eight years old at the start of your agreement, and less than twelve years old at the end. However, a poor credit history could mean that the age of the car is limited to a maximum of ten years old at the end of the agreement.

There are no limits to monthly mileage unless you’re on a leasing agreement, such as a Hire Purchase agreement. In this case, the usual mileage limit is 100,000, although lenders do have different criteria.

To learn more about the different car finance options, check out our page.

Employment

You must be in stable employment and able to provide your previous three months’ bank statements and payslips. Stable employment history will be viewed favourably and may also help to reduce the interest rate that you pay on your loan.

If you’ve been in your job for less than three months, we may be able to help if you have been consistently employed in the past.

If you are self-employed, it can be more difficult to obtain car finance, but it is possible. You can read more about this here.

If you work part-time, you will still have options. You will need to earn the lender’s minimum income criteria and be able to provide three months’ payslips.

Benefits

If you claim benefits you will need to prove that at least half of your income is from employment.

Accepted benefits as forms of income include Carer’s Allowance, Local Council Tax Support, Disability Living Allowance, Tax Credits, Incapacity Benefit (long term incapacity), Pension Credit, and State Retirement Pension.

If you claim disability benefit, lenders try to be more flexible due to the nature of the benefit and will accept government-funded mobility allowance.

Retirement

If you are retired, we’re happy to help – despite being out of employment, usually retired applicants are in a good financial position having had the time to build up a good credit history.

All you will need to do is have proof of income. This would need to come from a pension, investment or property rental income.

Due to the usual age group of retired applicants, lenders may want to minimise the term of the loan to help share any associated risks.

If you’ve found the perfect car and you’re itching to get behind the wheel but you’re not sure how you’re going to pay for it, finance is a great option. We hope this has given you a good overview of the factors which affect your eligibility for car finance, but if you have any questions, give the My Car Credit team a shout – we’re always here to help!

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!

I am self-employed, can I still get car finance?

Self-employed lady wants to know if she can get car finance

The short and positive answer is ‘yes’! Whilst the key thing will be proving your income, we want to take you through the ins and outs of getting car finance as a self-employed person – giving you all the information you need to make your car-buying journey as easy as possible.

Proof of income

The first thing that finance lenders will be looking for is proof of steady and regular income. Dependent on your credit score, the lender will probably want to see proof of income on paper in order to assess your credit criteria and your ability to keep up with monthly repayments.

To work out your average income, lenders will usually total your income in the last three month’s bank statements and divide it by three. This then allows them to get a credit limit based on your proof of income. However, if you have a lower credit score, you may be required to produce in excess of three months’ worth of bank statements or payslips to prove your income.

Monies that are authorised by lenders must be from a UK bank account in yours, or your spouse or partner’s name. Cash-in-hand cannot be used as proof of income. If the bank account is in your spouse or partner’s name, they will also need to be added to the finance application.

Most finance companies will also not accept tax returns as proof of income.

Employment and address history

The lender will need to see a minimum of three year’s employment history, three year’s address history, and you’ll need to have been a UK resident for a minimum of five years.

Lenders are looking for evidence of stability in employment and address history – the longer you have been at your current job and address, the better.

Applying as a business

If you’re applying on behalf of your business, there are many things you need to take into account. Firstly, your business will need to have been registered and trading for a minimum of two years. Usually, lenders will take your net profit as financial reassurance, with most requiring it to be at least double the amount of the money you are looking to borrow.

When applying as a business, you’ll also need to decide whether the car being financed will be for business use and the business type is intrinsic to the use of the car. Any cases in which the business use of the car would be deemed excessive or abnormal will usually be rejected by lenders.

As an example, some finance lenders won’t finance a car for self-employed taxi drivers, who will be using the car much more frequently and adding more mileage than normal. This affects the car’s value more than if they were just using it for everyday driving.

What should I do if I’m struggling to show proof of income?

Focus on making sure that your credit profile is as strong as possible. We recommend ensuring you’re on the Electoral Roll. This improves your credit profile and proves your identity through a government-run system. This can reassure lenders that they are not at risk from fraud or identity theft.

There are also a number of additional ways to improve your credit score, which you can read about here.

If your credit rating is good and you can afford to put down a deposit, you should try to put as much money towards the car as possible for your circumstances. This will help to share the risk of the loan with the lender and give them further reassurance to approve your application.

Finally, consider using a guarantor or submitting a joint application. This lowers the risk for the lender and can increase your chances of getting accepted.

Additional information

Essentially, the more information the lender has on you, the more security they have, which will greatly improve the chances of them approving your car finance application. However, make sure that you are as honest as possible. You shouldn’t attempt to overstate your income in the hope that it’ll increase your chances of being approved or get you a better rate. Finance lenders would normally see this as fraud, which could have serious implications.

Going self-employed is many people’s dream – working for yourself means being responsible for your own success and directly reaping the rewards of your hard work. Driven by changes in the economic climate and helped along by the digital revolution, figures show that self-employment in the UK has increased in popularity, from 3.8 million that were self-employed in 2008 to 4.8 million in 2017. We want to help anybody that’s self-employed to get car finance.

So, don’t lose heart if you’re self-employed and want a car loan – there are many different ways to obtain car finance. We hope our advice has been useful but if you need any more information about applying for car finance when you’re self-employed, we’re here to help!

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 such a thing as guaranteed car finance?

Man signs agreement for buying car on finance

Put simply – no. Just as there are no guarantees in life, there are no guarantees in car finance, and we would advise you to be very wary of any company that suggests that they can guarantee car finance to you. At My Car Credit, we don’t offer any guarantees but we always do our absolute best to get you accepted for car finance, so you can buy the car that you want.

The truth

The reality of the situation is that the ‘guaranteed car finance’ claim is often a marketing ploy to entice you into the idea that you will definitely be able to get a loan regardless of your circumstances.

Guaranteed car finance simply doesn’t exist. In fact, there have been laws in place since 2010 which state that making a false or misleading claim around finance guarantees for consumer credit is an offence. Additionally, advertisements that contain the phrase ‘loan guaranteed’ (unless there are no terms and conditions regarding the individual’s credit rating) are also banned.

‘Guaranteed finance’ schemes

There are many ‘guaranteed finance’ schemes which are designed to catch you out. A particularly common scheme is to ask for a ‘guaranteed finance enquiry’ fee. Usually this fee, and the offer that it is meant to guarantee, are attached so closely to small print (i.e. legal jargon), you’d need to be a qualified lawyer to decipher it!

Any finance lender suspected of dealing with customers in this way, can end up with a full Financial Conduct Authority (FCA) investigation into their conduct, which could lead to them being fined or forced to close.

In summary – almost every guaranteed car finance claim is a scam.

How it really works

Car finance agreements are purely based on your individual circumstances and your credit profile. This means that there will inevitably be some individuals who aren’t eligible for car finance. Whilst we will try and help you as much as possible to get approved for car finance, it’s the lenders that make the final decision after fully assessing your credit profile.

A credit profile is a document that contains information regarding your credit ‘worthiness’ and credit history. Your credit profile includes: what types of credit you hold, the length of time your credit accounts have been open for, if you made your repayments on time, and any applications for new credit. Lenders will be far less likely to lend you money if you would not be able to repay them. Not only is this bad business for them but it is also not ethical for them to lend you money if you can’t afford to repay it.

A more ethical solution to car finance

At My Car Credit, we only carry out a ‘soft search’ when you first apply with us. This means that there will be no footprint or indication on your credit file that a search has been carried out. Once you have made an application with us and a ‘soft search’ has been performed, we know if you will be accepted by one of our lenders on our extensive panel.

The benefit of this approach means that (in the small chance the application does not get accepted), your credit profile will not be affected.

What we can offer

My Car Credit have access to a large panel of lenders which are vetted by the FCA for their trustworthy operations and the quality of their service.

Our large network of lenders increases the chances of you getting accepted, across all credit profiles (from poor to excellent). Our unique underwriting policy prioritises the best outcome for you, the customer, in order to give you the best available outcome on car finance for your circumstances.

You can trust My Car Credit because we are part of Evolution Funding, the UK’s largest motor finance broker and market leaders in the industry. We have helped thousands of customers get the car they want; at the price they can afford.

We are regulated and monitored by the Financial Conduct Authority (FCA) and so you can borrow for your next car safely in the knowledge that we are professional and reputable.

There is lots of advice on our Help and Advice pages about how credit decisions are made and how you can improve your credit rating. If you have any questions, our Car Credit Specialists are here to help. Finally, you can get an instant decision, that won’t affect your credit file, by applying today.

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 finance a car for my daughter/son?

Young person holding bag waiting for parent to arrive in new car

Financing a car for your child is a proud moment for many parents. Often you are looking to finance a car as your son or daughter are at a point in life where a car is simply too expensive. We are often asked whether it’s possible to finance a car for a son or daughter, so here’s a run-through of both the available routes with My Car Credit.

Guarantor Loans

A guarantor loan is one way of financing a car for your son or daughter. This type of car finance agreement works similarly to a normal loan, in the sense that your child will be responsible for making the agreed repayments. However, it also allows for a third party (i.e. you) to guarantee the repayments in the case that your son or daughter is unable to make them. By being a guarantor on the agreement, you are reducing the risk to the car finance lender. This can increase the likelihood of securing car finance on behalf of your son or daughter.

Guarantor Loans are a big responsibility for both of you. Should your son or daughter fail to make the monthly repayments, you would be liable for the debt. If you fail to make the payments on behalf of your child, both of you could be issued with a County Court Judgement (CCJ) and you would both have damaged credit profiles, which would affect your ability to secure finance in the future.

A guarantor loan can create an opportunity for your son or daughter to improve upon their credit score for the future. An improved credit score will increase their chances of being approved for any future financial agreements they should wish to take.

Joint Application

A stronger option for financing your son or daughter’s car is with a joint application – an agreement in which both of your circumstances are taken into account. This is especially useful when your child has a good income but a slightly poorer credit score.

In this case, both parties are responsible for upholding the repayments, and if one is no longer able to meet their financial commitments, the other must pick up the full amount. The risk with this kind of agreement is that any missed repayment (from either party) will be recorded on both parties’ credit files. However, if you are supporting a child with a good income but a less than perfect credit score, this is an option to consider.

Financing your child’s car is a matter of pride for lots of parents, but you must consider all your options before signing onto a car finance agreement.

Guarantor loans and joint finance are two ways to get your child up and running with My Car Credit – whilst our online application form doesn’t allow for adding in an additional person, our experienced Car Credit Specialists can help you with this over the phone. Simply give us a call on 01246 458 810.

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!