Yes, you can get car finance with bad credit, but it may come with higher interest rates and limited options. You may also need to provide additional proof of income.
Can I get car finance with bad credit?
Yes, you can get car finance with bad credit, but it may come with higher interest rates and limited options. Many lenders now cater to individuals with poor or limited credit histories, as they understand that not everyone has a perfect financial record.
When applying for car finance with bad credit, lenders will still assess your affordability and overall financial stability. This includes looking at your income, employment status, and monthly expenses. You may need to provide additional proof of income, such as recent payslips or bank statements, to reassure the lender.
Specialist bad credit car finance providers offer tailored options for those with low credit scores. While these deals often have higher interest rates to reflect the increased risk, they can help you get on the road and improve your credit over time if you keep up with payments.
Another option is to provide a guarantor. A guarantor with good credit can co-sign the agreement, offering the lender additional security that the payments will be made. This can result in better interest rates or higher chances of approval.
Making a larger deposit is also beneficial, as it reduces the amount borrowed and demonstrates financial commitment. Opting for a cheaper or used car can also make repayments more affordable and manageable.
Finally, improving your credit score before applying can increase your options. Paying off existing debts, checking for inaccuracies on your credit report, and keeping credit utilisation low are effective ways to boost your score.
In summary, while bad credit makes securing car finance more challenging, it is not a barrier. With careful planning and exploring specialist lenders, you can find suitable options to finance your car.