How does car finance work with bad credit?

Go Car Credit is not a third-party provider or a finance broker, which means that when taking out a car finance agreement with us, you will not be dealing with an unknown car finance company.

Hire Purchase is one of the most common types of loan for people with bad credit. You hire the vehicle and make monthly repayments until you have paid off the agreed finance. Once all the payments have been made, the car is yours.

Hire Purchase is a suitable form of car finance for people who are struggling to get other forms of credit such as personal loans, people with bad credit as well as people who do not want to pay cash for a vehicle. It is a convenient way to pay for a vehicle based on budget and credit profile so you can get affordable monthly payments.

APPLY NOW

How do I get car finance if I have bad credit?

We do not require a deposit, but providing a deposit may help your application if you have bad credit.
You will need to provide 3 years’ worth of address history and employment history so we can search your credit history, as we’re unable to perform a credit check until we have these details. A decision can be made faster if we have all of this information.
Choice of vehicle is an important part of the car finance application if you have bad credit. We would suggest you think about the costs associated with your choice of car such as fuel, insurance, tax, MOT, servicing and maintenance costs, as these will all have an influence on the affordability of the vehicle.

What affects being approved for car finance?

Missed payments or arrears – we are happy to consider providing car finance to people who have missed payments or have a bad credit rating. However, if you have fallen behind on repayments on other credit agreements it would be in your interest to do everything you can to get the repayments up to date quickly in order to improve your chances of being accepted for car finance with bad credit.
IVA’s – Do you currently have an IVA? If so, we will need written confirmation from your Insolvency Practitioner that they are happy for you to borrow again. If you have had an IVA in the past which has been settled, then you are welcome to apply for our car finance.
Bankruptcy – If you are currently in bankruptcy, unfortunately, we are unable to help at the present time. Our car finance blog, features articles on how to manage debt, helpful tips to improve your credit rating and general advice about the bad credit car buying process, so keep an eye out for these articles, which may be of help to your current financial situation. If your bankruptcy has been discharged, then we will be happy to consider you when you apply for car finance.
CCJ’s – If you have an outstanding CCJ, that does not mean it is the end of the road when it comes to applying for bad credit car finance as you can still apply for car finance with us and we can review the application.

How can I start to rebuild my bad credit?

Try to make sure that all outstanding credit is going down and regular on-time payments are being made.
Make sure all debts are registered in the correct name by contacting your existing creditors to check and update your details.
Make sure you are on the electoral register. If you are not listed, it may become difficult for you to get credit. If you are not currently registered, or are unsure whether you are, visit Your Vote Matters for advice on how to register.
Be aware of your options when considering credit repair companies; you may see adverts from firms that will repair your bad credit rating in return for a fee. Paying for credit repair services cannot legally provide a service which you could not do for free either yourself or via a free debt management service.
For further advice on free bad credit advice and debt management services available to you, click to learn how to establish good credit.
Finance lenders like to see long-term employment history, long-term record with the same bank and long-term living in one place.

‘Guaranteed Finance’ Fact

Many companies offer ‘guaranteed finance’. The fact is no finance company providing car loans for people with bad credit can guarantee that you will be accepted if you have had bad credit or still have a bad credit profile. Go Car Credit has lending criteria that need to be met and taken into consideration when reviewing your application, but we will work with you to ensure we fully understand your financial situation if you have a poor credit history.

What are the risks of getting car finance?

As with all types of loan and credit agreements, there are some risks. Here in the UK, car finance is regulated by the Financial Conduct Authority and lenders must follow responsible and ethical lending practices. The finance is secured on the vehicle, so if you don’t keep up with the monthly repayments, Go Car Credit can repossess the car.

Similarly, failure to make payments can also damage your credit report and give you a bad credit profile. To help people who have a bad credit profile, Go Car Credit will look at your income and expenditure to ensure that you can safely afford the repayments.

For more information about how to improve your chances of getting car finance if you have bad credit, please visit our Bad Credit Car Finance Infographic page on our blog.