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Car finance ›
How to get a car on finance: 9 ways to increase your chances
Daniel Timblick, Senior Credit Risk Analyst, Thursday, 29 April 2021
Updated: Wednesday, 22 May 2024
Updated: Wednesday, 22 May 2024
Applying for car finance can feel daunting, almost like decisions are completely out of your hands. Fortunately, there are things you can do before applying that may increase your chances of being approved.
To help, this guide explains 9 ways you can maximise your chances of being accepted for car finance. First, let’s explore why a finance company may reject your application.
Why might you be rejected for car finance?
If you have been refused car finance in the past, it can be tricky to understand exactly why this happened, as the lender may be unable to tell you the exact reason due to internal processes and procedures.
Here are 5 common reasons why your application may have been declined:
Applying for car finance can feel daunting, almost like decisions are completely out of your hands. Fortunately, there are things you can do before applying that may increase your chances of being approved.
To help, this guide explains 9 ways you can maximise your chances of being accepted for car finance. First, let’s explore why a finance company may reject your application.
Why might you be rejected for car finance?
If you have been refused car finance in the past, it can be tricky to understand exactly why this happened, as the lender may be unable to tell you the exact reason due to internal processes and procedures.
Here are 5 common reasons why your application may have been declined:
To ensure finance is suitable for you, car finance companies make several checks on applications. One of these is checking your credit history so they can understand how you’ve managed credit in the past, and whether you’ve missed any payments.
If you have a history of late payments, defaulting on credit agreements, or have a CCJ or IVA, you may find it difficult to get approved by mainstream lenders. It’s not impossible to get car finance with bad credit, it just means you may have to use a specialist lender.
Poor credit history
To ensure finance is suitable for you, car finance companies make several checks on applications. One of these is checking your credit history so they can understand how you’ve managed credit in the past, and whether you’ve missed any payments.
If you have a history of late payments, defaulting on credit agreements, or have a CCJ or IVA, you may find it difficult to get approved by mainstream lenders. It’s not impossible to get car finance with bad credit, it just means you may have to use a specialist lender.
Insufficient income
Lenders will look at your income to make sure you’ll be able to make your monthly payments. Your application may be declined if your income is not high enough to cover the repayments.
It’s important to know what sources of income are accepted before you make an application. Some lenders don’t accept applications for car finance with benefits, while Moneybarn do.
Insufficient income
Lenders will look at your income to make sure you’ll be able to make your monthly payments. Your application may be declined if your income is not high enough to cover the repayments.
It’s important to know what sources of income are accepted before you make an application. Some lenders don’t accept applications for car finance with benefits, while Moneybarn do.
Unstable employment
Car finance companies prefer you to have a stable employment history as it shows you have a steady source of income. Frequent job changes or periods of unemployment may show that you cannot keep up with your payments.
If you’re self-employed, you may also struggle to get accepted for car finance as your income can vary from month to month. At Moneybarn, we specialise in supporting people who work for themselves. See our self-employed car finance page for more information.
Unstable employment
Car finance companies prefer you to have a stable employment history as it shows you have a steady source of income. Frequent job changes or periods of unemployment may show that you cannot keep up with your payments.
If you’re self-employed, you may also struggle to get accepted for car finance as your income can vary from month to month. At Moneybarn, we specialise in supporting people who work for themselves. See our self-employed car finance page for more information.
Incorrect information
Mistakes on your credit report or car finance application can impact your chances of being approved. To avoid this, make sure to keep your address up-to-date on your drivers licence and check if you’re registered on the electoral roll if you’ve moved recently.
You could also check your credit report and make sure that everything is correct.
Incorrect information
Mistakes on your credit report or car finance application can impact your chances of being approved. To avoid this, make sure to keep your address up-to-date on your drivers licence and check if you’re registered on the electoral roll if you’ve moved recently.
You could also check your credit report and make sure that everything is correct.
Limited credit history
If you have not taken out credit before, you may struggle to get car finance. This might be because you’ve always paid for things with cash, or because you’ve simply never taken out credit to buy something. Having little or no credit history means there is no evidence that you can manage credit responsibly.
You may find it difficult to get credit with a limited history. If you’re approved, you might find you are offered the same interest rates as someone with a poor credit score. This is because lenders rely on past credit agreements to assess your ability to make repayments.
Limited credit history
If you have not taken out credit before, you may struggle to get car finance. This might be because you’ve always paid for things with cash, or because you’ve simply never taken out credit to buy something. Having little or no credit history means there is no evidence that you can manage credit responsibly.
You may find it difficult to get credit with a limited history. If you’re approved, you might find you are offered the same interest rates as someone with a poor credit score. This is because lenders rely on past credit agreements to assess your ability to make repayments.
9 ways to increase your chances of getting car finance
Nothing is guaranteed to boost your chances, but there are steps you can take that may make it easier to get approved for car finance.
9 ways to increase your chances of getting car finance
Nothing is guaranteed to boost your chances, but there are steps you can take that may make it easier to get approved for car finance.
Know your credit score
Knowing your credit score can help you to understand what factors may affect your application. To see your credit file, you can sign up to the 3 Credit Reference Agencies (CRAs): Experian, Equifax, and TransUnion.
Each CRA has its own scoring system, so it can be helpful to know where you sit on all 3. This is because different finance companies use different CRAs to understand your eligibility and affordability. Read our guide on what a ‘good’ credit score is for more information.
Improve your credit score
Some CRAs will show ways to improve your credit score based on your credit report. These may include:
- Join the electoral roll: This helps finance companies verify your identity and address.
- Make regular payments on time: This shows lenders that you can manage credit responsibly.
- Consider your credit utilisation: If you use a high percentage of the credit available to you, it could be a sign that you’re overly reliant on credit.
Research lenders
Just because one lender has refused your car finance application in the past, it doesn’t mean all lenders will.
There are many lenders to choose from, and some specialise in providing car finance to people who have struggled to get accepted previously.
For example, at Moneybarn, we offer Conditional Sale agreements and help finance vehicles for people looking to build their credit score.
Know your credit score
Knowing your credit score can help you to understand what factors may affect your application. To see your credit file, you can sign up to the 3 Credit Reference Agencies (CRAs): Experian, Equifax, and TransUnion.
Each CRA has its own scoring system, so it can be helpful to know where you sit on all 3. This is because different finance companies use different CRAs to understand your eligibility and affordability. Read our guide on what a ‘good’ credit score is for more information.
Improve your credit score
Some CRAs will show ways to improve your credit score based on your credit report. These may include:
- Join the electoral roll: This helps finance companies verify your identity and address.
- Make regular payments on time: This shows lenders that you can manage credit responsibly.
- Consider your credit utilisation: If you use a high percentage of the credit available to you, it could be a sign that you’re overly reliant on credit.
Research lenders
Just because one lender has refused your car finance application in the past, it doesn’t mean all lenders will.
There are many lenders to choose from, and some specialise in providing car finance to people who have struggled to get accepted previously.
For example, at Moneybarn, we offer Conditional Sale agreements and help finance vehicles for people looking to build their credit score.
Know what you can afford
Lenders will only offer you car finance if you can afford it. They will use an affordability check to understand whether you can afford to make the monthly payments.
Before applying for finance, think about what you spend each month and how much money you have spare. You’ll also need to consider the other costs of owning a car, such as road tax, insurance, MOTs, fuel, and servicing.
You can use our online car finance calculator to get an idea of what your repayments might look like with us.
Check your financial links
If you have previously signed a joint finance agreement with someone with a bad credit score or little credit history, this could affect your credit score.
Being linked to a bad borrower can make it harder to get approved for car finance. It can also affect your ability to get other forms of credit.
If you’re no longer linked to that person, you can apply for a notice of disassociation, which shows lenders you are no longer financially connected to the individual.
Consider a joint or guarantor deal
Applying for a finance agreement with a guarantor (usually a friend or family member) with a good credit history can improve your chances of being approved.
A guarantor agrees to make the repayments on your behalf should you be unable to. This can help you get finance if you have very bad credit or little credit history.
It’s worth knowing that there is no minimum credit score for car finance, and there are specialist lenders like Moneybarn who can help you get vehicle finance.
Know what you can afford
Lenders will only offer you car finance if you can afford it. They will use an affordability check to understand whether you can afford to make the monthly payments.
Before applying for finance, think about what you spend each month and how much money you have spare. You’ll also need to consider the other costs of owning a car, such as road tax, insurance, MOTs, fuel, and servicing.
You can use our online car finance calculator to get an idea of what your repayments might look like with us.
Check your financial links
If you have previously signed a joint finance agreement with someone with a bad credit score or little credit history, this could affect your credit score.
Being linked to a bad borrower can make it harder to get approved for car finance. It can also affect your ability to get other forms of credit.
If you’re no longer linked to that person, you can apply for a notice of disassociation, which shows lenders you are no longer financially connected to the individual.
Consider a joint or guarantor deal
Applying for a finance agreement with a guarantor (usually a friend or family member) with a good credit history can improve your chances of being approved.
A guarantor agrees to make the repayments on your behalf should you be unable to. This can help you get finance if you have very bad credit or little credit history.
It’s worth knowing that there is no minimum credit score for car finance, and there are specialist lenders like Moneybarn who can help you get vehicle finance.
Save for a deposit
Saving for a deposit or increasing the amount can improve your chances of being approved for car finance.
You might be looking for no deposit car finance. This may be more affordable at first, but might cost more in the long run due to increased monthly payments and interest.
If you are wanting to pay a certain amount each month, you could consider lengthening the period of your loan to reduce the monthly cost. Learn more about this with our guide ‘What deposit should I make for car finance?’.
Choose a realistic term
When you’re looking for car finance or a loan, choose a timeframe that fits your budget and financial goals. A longer agreement term may result in lower payments but means you’ll end up paying more in interest.
If you want to pay a certain amount each month, you could consider lengthening the period of your loan to reduce the monthly payment amount.
Our car finance agreements last between 36 and 60 months (3 to 5 years).
Provide proof of a stable income
Finance companies want to know that you have a steady income and can afford the monthly payments.
To prove this, make sure you have the relevant documents, like payslips, tax returns, and employment verification, before applying.
Having your documents ready in case the company requests them can help avoid unnecessary delays. Find out more about what you need when applying for car finance.
Save for a deposit
Saving for a deposit or increasing the amount can improve your chances of being approved for car finance.
You might be looking for no deposit car finance. This may be more affordable at first, but might cost more in the long run due to increased monthly payments and interest.
If you are wanting to pay a certain amount each month, you could consider lengthening the period of your loan to reduce the monthly cost. Learn more about this with our guide ‘What deposit should I make for car finance?’.
Choose a realistic term
When you’re looking for car finance or a loan, choose a timeframe that fits your budget and financial goals. A longer agreement term may result in lower payments but means you’ll end up paying more in interest.
If you want to pay a certain amount each month, you could consider lengthening the period of your loan to reduce the monthly payment amount.
Our car finance agreements last between 36 and 60 months (3 to 5 years).
Provide proof of a stable income
Finance companies want to know that you have a steady income and can afford the monthly payments.
To prove this, make sure you have the relevant documents, like payslips, tax returns, and employment verification, before applying.
Having your documents ready in case the company requests them can help avoid unnecessary delays. Find out more about what you need when applying for car finance.
What to do if you've been rejected for car finance
If you’ve recently had a declined application for car finance, don’t worry. First, try to understand why you were turned down to see if you can fix the problem.
To do this, you could contact the finance provider directly or check your credit report.
If the company that has rejected your application has conducted a hard credit check, this will show on your credit report, but the result of their report will not be recorded.
Regular hard checks on your credit history can affect your score, so if you have been rejected, it may be worth leaving some time before applying for credit again.
Read ‘What checks are done for car finance‘ for more information, or check out our ‘Soft search vs hard search credit check‘ guide for details on the differences between the checks.
How long does car finance approval take?
The time it takes to accept or reject a car finance application depends on several factors, including the type of lender you want to borrow from and your circumstances.
Explore what can slow an application in our guide, ‘How long does car finance approval take?‘.
Increase your chances of getting car finance with Moneybarn
We specialise in bad credit car finance, so if lenders have rejected you in the past or you have no credit history, we could help. We have over 30 years of experience helping people up and down the UK who are just like you.
What to do if you've been rejected for car finance
If you’ve recently had a declined application for car finance, don’t worry. First, try to understand why you were turned down to see if you can fix the problem.
To do this, you could contact the finance provider directly or check your credit report.
If the company that has rejected your application has conducted a hard credit check, this will show on your credit report, but the result of their report will not be recorded.
Regular hard checks on your credit history can affect your score, so if you have been rejected, it may be worth leaving some time before applying for credit again.
Read ‘What checks are done for car finance‘ for more information, or check out our ‘Soft search vs hard search credit check‘ guide for details on the differences between the checks.
How long does car finance approval take?
The time it takes to accept or reject a car finance application depends on several factors, including the type of lender you want to borrow from and your circumstances.
Explore what can slow an application in our guide, ‘How long does car finance approval take?‘.
Increase your chances of getting car finance with Moneybarn
We specialise in bad credit car finance, so if lenders have rejected you in the past or you have no credit history, we could help. We have over 30 years of experience helping people up and down the UK who are just like you.
How our car finance works
We could help, even if you:
- Have poor or very bad credit
- Are in or have had an IVA
- Have little or no credit history
- Have a CCJ or default
- Are self-employed
- Have been discharged from bankruptcy
- Are receiving benefits
Find out more about our Conditional Sale car finance. When you’re ready, get a personalised quote in less than 5 minutes to see how we could help you. We only use a soft search when you get a quote, which doesn’t affect your credit score.
We only do a hard credit check on your file once you’ve found a vehicle and are ready to go ahead with the agreement.
We could help, even if you:
- Have poor or very bad credit
- Are in or have had an IVA
- Have little or no credit history
- Have a CCJ or default
- Are self-employed
- Have been discharged from bankruptcy
- Are receiving benefits
Find out more about our Conditional Sale car finance. When you’re ready, get a personalised quote in less than 5 minutes to see how we could help you. We only use a soft search when you get a quote, which doesn’t affect your credit score.
We only do a hard credit check on your file once you’ve found a vehicle and are ready to go ahead with the agreement.
How our car finance works
For a better road ahead
Moneybarn is a member of the Finance and Leasing Association, the official trade organisation of the motor finance industry. The FLA promotes best practice in the motor finance industry for lending and leasing to consumers and businesses.
Moneybarn is the trading style of Moneybarn No. 1 Limited, a company registered in England and Wales with company number 04496573, and Moneybarn Limited, a company registered in England and Wales with company number 02766324. The registered address for these companies is: Athena House, Bedford Road, Petersfield, Hampshire, GU32 3LJ.
Moneybarn’s VAT registration number is 180 5559 52.
Moneybarn Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702781)
Moneybarn No. 1 Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702780)
