But here’s the sticking point – cars are expensive. And most young motorists don’t have the money to buy one outright. That’s where car finance for young drivers comes in, allowing you to spread the cost over time and get on the road sooner.

That said, car finance can feel like a maze. Between credit checks, finance types, deposits and jargon, it’s easy to feel like the whole thing isn’t made with young drivers in mind.

We’re here to fix that. This guide will cover everything you need to know about cars on finance for young drivers in the UK. Yep, even with little credit history or part-time income. We’ll break down what lenders actually look for, how to choose the right car and finance type, and what steps will help you get approved. 

Can young drivers get car finance in the UK?

Yes! More young people are doing it every year. In fact, getting a car on finance for young drivers has become one of the most popular ways for under 25s to secure a first or second vehicle.

But there are a few things that make it trickier when you’re just starting out. Here’s what you need to know:

• You must be 18 or older to apply for car finance in the UK.
• If you have little or no credit history, lenders can’t easily judge how responsible you are with money.
• Many young drivers are in part-time or gig work, which can make income harder to verify.
• Lenders see new drivers as higher risk, since younger people are more likely to make insurance claims or miss repayments.

That doesn’t mean you’ll be turned down automatically. It just means lenders will look at your whole financial picture, not just your age. Plus, there are steps you can take to make yourself a stronger applicant and score the best car finance for young drivers.

What lenders look for in young driver applications

Lenders aren’t expecting you to have a glowing credit report and a £40k salary at 19. But they do want reassurance that you’re a safe bet. Here’s what they’ll be checking:

Age

You need to be 18 to legally enter into a credit agreement. Some lenders prefer applicants aged 21+, but many now offer flexible options for 18-20-year-olds, especially with a guarantor.

Employment and income

Most lenders want to see some kind of regular income, even if it’s from part-time work or self-employment. You don’t need a full-time office job (even shifts at Costa or Deliveroo earnings can help) but the more predictable your income is, the better.

Credit score

A good credit score shows you can manage money responsibly. But if you don’t have a score at all yet, don’t panic. Many young applicants are in the same boat. Lenders may just ask for a bit more info or suggest a guarantor.

Affordability

Lenders calculate whether the monthly repayments, plus your insurance and living costs, are realistic. Applying for a £15k car with a £400/month repayment when you earn £900/month won’t fly. £150/month for a £5k car? Much more doable.

The best types of car finance for young drivers

There’s no one-size-fits-all answer. The reality is that some plans suit young drivers better than others. Here’s a rundown of your options for car finance for young drivers:  

Hire purchase (HP)

HP is one of the most popular finance options for new drivers, because it’s simple and stable.

• Pay a fixed amount each month
• No mileage restrictions
• You own the car at the end of the term

It’s easy to understand, budget-friendly and often more accessible for those with limited credit.

Example: You’re 19, working part-time and want to buy a £6,000 car. With HP, you might pay around £140/month over four years, and it’s yours once you’ve made the final payment.

Personal contract purchase (PCP)

PCP lets you lease the car for a fixed term with the option to:

• Return it at the end
• Pay a balloon payment to buy it
• Trade it in for a new model

Monthly payments are lower than HP, but you won’t automatically own the car unless you make the final payment. PCP is great if you like the idea of upgrading every few years or want lower payments short-term. Just keep an eye on mileage limits and wear-and-tear terms.

Example: You finance a nearly-new Ford Fiesta for three years. You only pay for the depreciation, not the full cost, which keeps your payments low.

Personal loan

You can also take out a personal loan from your bank or another lender to buy the car outright.

• You own the car from day one
• Use the money wherever you like (including private sales)
• Great for those with strong credit or parental co-signers

It’s not always ideal for first-timers, but if your credit’s decent or you have a guarantor, it can offer more flexibility.

Guarantor finance

This is when a parent or family member agrees to cover the loan if you can’t.

• Can open up better deals and lower rates
• Lenders see it as less risky
• Everyone involved needs to understand the legal responsibility

Guarantor finance is a useful option for students or young people without a credit record. Just make sure both parties are 100% clear on the terms. 

Family support: help from the Bank of Mum and Dad

Let’s be real, getting on the road isn’t cheap. From buying the car itself to sorting insurance and ongoing running costs, it’s no surprise that many young drivers turn to family for help.

Research from the AA found that over a third of young drivers (26%) received some form of financial help toward purchasing a car, whether that was with the deposit, monthly finance payments or insurance costs. The top reasons? A reward for passing the driving test, a birthday gift, starting university or celebrating exam results. 

It’s nice to have help. But of course, lots of young drivers don’t benefit from that level of support. Around 66% of young motorists haven’t received any financial help from family. If you’re in that majority, don’t panic. You’re certainly not alone and there are still affordable ways to get behind the wheel, especially when you work with a broker like My Car Credit.

How to boost your chances of getting approved

There are lots of practical steps you can take to improve your odds, even with limited credit or income.

Use a broker

A broker like My Car Credit has access to dozens of lenders, not just one. This increases your chance of being matched with someone who understands young drivers and offers better rates.

Improve your credit

Start building your credit before you apply. The below steps can work wonders for your score:

• Register to vote
• Use a credit builder card and pay it off in full each month
• Avoid missed payments on bills or subscriptions

Every little bit helps, especially over 6-12 months.

Get a guarantor

A parent or guardian can act as your financial safety net, which reassures lenders. It’s not always needed but it helps if you’re still living at home or just starting work.

Apply for what you can afford

Lenders love realism. Start with a modest, reliable car to show you’ve got your head screwed on. You can always upgrade later once your credit and income grow.

Pick the right car

Small, fuel-efficient, and low-insurance group cars are a good bet. Think:

• Ford Fiesta
• Renault Clio
• Honda Jazz
• Volkswagen Polo
• Mini Cooper
• Kia Picanto 

Avoid anything flashy, thirsty or expensive to fix. It’ll only bump up your repayments and insurance. Not to mention bring down your chances of approval. 

Choosing the right car for your finance application

The car you choose has a huge impact on your application. Here’s what matters:

Car value

Lower value = lower repayments = easier approval. Basically, lenders are more likely to offer car finance for young drivers if the value is modest. 

Insurance groups

Choosing a car in a low insurance group (models like the VW Up, Hyundai i10 and Toyota Aygo) can be a great way to win over lenders and boost your chances of approval. Looking for car finance for young drivers with insurance rates you’ll love? Check out our roundup of the 10 Cheapest Cars to Insure for Young Drivers. 

Consider used

Used or nearly new cars don’t just cost less. They hold their value better and can be just as reliable as showroom vehicles. Avoid write-offs or private sales. Lenders prefer trusted dealers like the ones you’ll find in My Car Search. 

Insurance and finance: why they go hand-in-hand

It’s easy to think of car insurance and car finance as separate things. Not true! They’re linked and lenders know it.

When reviewing your application, lenders consider:

• Insurance costs as part of your monthly expenses
• Your ability to afford both the loan and the insurance
• How likely you are to make repayments long-term

Consider black box insurance

Looking for ways to save on car finance for young drivers with insurance? A black box (or telematics) policy tracks your driving and rewards you for being careful. It can lower your premium significantly and show lenders you’re a low-risk driver.

• Ideal for under-25s
• Proves you’re responsible
• May positively influence lender decisions

Tips to improve your credit score as a young driver

Your credit score is like your financial reputation. The better it looks, the better your finance options. 

Here’s how to start building it, even as a student or first-time earner:

• Get on the electoral roll – This proves your identity and address – a quick win if you want to boost your score.

• Use a credit-builder card – Spend a little each month (like your Spotify or Netflix bill) and pay it off in full.

• Avoid missed payments – Set up direct debits for your phone, utilities and subscriptions.

• Keep credit utilisation low – If you have a £500 limit, try not to use more than £150-£200 at any one time.

• Check your credit file regularly – Use tools like Experian, ClearScore or Credit Karma to spot errors or see progress.

Remember, building credit takes time. But starting now pays off when you’re ready to upgrade or apply for a mortgage down the line.

Don’t forget: young driver incentives

Some lenders, car brands and dealerships offer special deals on car finance for young drivers. These can include:

• Cashback offers
• Deposit contributions
• Discounted servicing packages
• Free insurance for a year
• Student-specific deals (especially through unis)

Always ask what offers are available. You might be surprised by what’s out there! Every little saving helps when you’re just getting started.

Why use My Car Credit to find young driver car finance?

At My Car Credit, we’re here to make your first (or second) car finance experience smooth, safe and totally stress-free.

Here’s what makes us different:

• Wide lending panel – We work with the UK’s biggest panel of lenders, including high-street banks and alternative options. More variety means more options for young drivers.  
• Our soft credit check means zero impact on your score.
• Quick, online application – No paperwork piles or long phone calls when you’re trying to cram for a uni exam. 
• Expert support from real people who know how to finance cars for young drivers. We know our stuff and can also help with tips on car finance for young drivers with insurance. 
• Transparent terms – What you see is what you get with My Car Credit. No sneaky fees or jargon. Just the best car finance for young drivers. 

It’s everything you need, minus the headache. Whether you’re a student in Sheffield, a new apprentice in Reading or have just scored a post-grad job in London, we’ve got your back.

Ready to get started? Use our car finance calculator to see what you could afford or apply online now.

FAQs

Can I get car finance at 18?

Yes! 18 is the legal minimum to get a car on finance for young drivers in the UK. Your options may be limited without income or a credit score, but a guarantor can help.

What’s the best car finance option for young drivers?

Looking for the best car finance for young drivers? Hire purchase is the most straightforward. PCP is good for flexibility and lower payments. Guarantor finance works well if you’re just starting out.

Can a student get car finance in the UK?

Yes, especially with a part-time job or a guarantor. Many lenders are happy to work with students as long as repayments are affordable.

Do young drivers need a guarantor?

Not always, but it helps if you’re under 21, don’t have credit history or aren’t earning much yet.

What credit score do I need for car finance?

There’s no fixed score, but the higher your score, the more options and lower rates you’ll get. You can still get finance with fair or limited credit.