Car Finance For Students and Young Drivers


Rates from 29.7% APR
40.9% Representative APR -
Subject to status and affordability

There is nothing like that feeling of passing your driving test and having the flexibility to go anywhere, at any time – without relying on mum or dad.

Here we take a look at the things you may need to consider if you are looking to get car finance as a student or young driver.

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Representative example – Total amount of credit £9,000, annual interest rate 21.75% (fixed), charge for credit £10,092.32 (£9,787.32 interest, £295 admin fee and £10 option to purchase fee), total amount payable £19,092.32. Loan term of 60 monthly instalments, 59 payments of £318.04 and 1 final instalment of £328.04. 40.9% Representative APR – Subject to status and affordability

Car finance considerations for students and young drivers

Being a student or a young driver can make it a little more difficult to get car finance. Here are a few reasons why that may be the case:

Little or no credit history

If you’re under 25 years old, it may be harder to find a suitable car finance agreement because you’ll probably have little – or no – credit history and this is likely to affect the number of lenders that are willing to provide you with a car loan.

If you’re 17 years old, you are not allowed to sign a credit agreement until you turn 18. In that case, your only option is to buy the best car you can afford through your savings or wait until you are 18 to enable you to apply for car finance or a personal loan through your bank.

At 18, you can apply for car finance, but it may be hard to secure car finance due to a lack of credit history.

No steady income

Many lenders will be reluctant to agree for young drivers or finance unless you’re in employment, with a regular income. Students are less likely to have a steady income due to the nature of being in education.

Higher risk

Lenders may also see young drivers as a bigger risk for repaying loans and only accept applications from consumers 25 years or older.

More prone to accidents

As students and young drivers are less experienced on the roads, there is a higher risk of them being involved in car accidents. For this reason, lenders tend to be a little more cautious.


How can students or young drivers secure car finance?

If you are looking to have the best chance of securing car finance, there are things you can do in the meantime that will help you over the long-term.

  • Building a credit history – this will dictate how successful you’ll be in applying for finance in the years to come.
  • Pay your bills on time – this is a good way to prove to lenders that you are capable of managing your finances.
  • Register on the electoral roll. You can do this by visiting

Car finance for students

We can provide car finance to students.. If you have a full valid driving licence and enough income to afford the repayments, and you are 25 years or older we’ll consider your application for student car finance.

Please note you must have an income of £1500 a month to be considered for a car loan with us, and we are unable to consider student loans and bursaries as income.

The good thing about Go Car Credit is that we don’t just review your credit profile to make our decisions, we will look at your affordability for a car loan with us.

Types of car finance for students and young drivers

As a student or young driver, you may still be suitable for standard forms of car finance but you will still need to be able to afford the monthly payments so income may be a barrier for you. Different car finance providers will have different income requirements and lending criteria. The below car finance options may be able be available to you:

  • Hire Purchase Car Finance – This is where you spread the full cost of the vehicle across a set amount of time such as 36 months. You will make fixed monthly payments and at the end of the agreement you will own the vehicle in full.
  • PCP Car Finance – PCP is a bit like hire purchase, but there are some differences to consider. You will be required to pay a deposit on the car and make monthly repayments until the end of the term. When the term ends, you will have a choice: you could make a lump sum payment – known as a balloon payment – in order to purchase the vehicle outright or hand the vehicle back and have no further payments.
  • Personal loan – A personal loan allows you to borrow a fixed amount of money, which you pay back in monthly instalments over a set period of time. This loan is not fixed to an asset like the above two options, so you can choose any type of car and don’t have any mileage restrictions or balloon payments.

Insurance costs for young drivers and students

Young drivers’ car insurance is likely to be very expensive and as a new driver there are a few things you can do to ensure you get the lowest price available to you.

  • Opt for an insurance policy that comes with a black box. These telematics devices monitor how the car is being driven and reports back to the insurance company. Premiums on such policies can be lower, if the black box data evidences you drive safely and responsibly.
  • Add a more experienced driver to the policy. However, you must never put them as the main driver when that’s not the case, as that’s fraudulent.
  • Choose a car in a low insurance group. Your choice of car is important. Each car is assigned an insurance group number from one to 50, with one being the cheapest to insure and 50 the most expensive. Driving a car in a low insurance group is the easiest way to reduce your premiums.
  • Paying for the full 12 months’ insurance upfront. This will make your payment slightly lower, as paying in instalments adds on an interest amount, making it slightly more.

Why choose Go Car Credit?

Still deciding whether we are the car finance partner for you. Here are six reasons to make an application today with us:

  • Regulated: Get peace of mind knowing that we’re authorised and regulated by the Financial Conduct Authority (FCA) and are committed to achieving fair outcomes for our customers.
  • Trusted: Don’t just listen to us. See what our customers think! We’re rated ‘excellent’ on the independent customer review site Trustpilot!
  • Responsible: We take an ethical approach to car loans, and will work with you to provide affordable, simple and sensible car finance.
  • Supportive: Our team are always happy to offer help or receive feedback. We ensure the car finance process is stress free.
  • Fair: We never discriminate. No matter your credit history or personal circumstances, we will review your application on an individual basis.
  • Straightforward: Applying for car finance with bad credit can feel daunting and complicated. We’ll communicate as clearly as possible to ease you through the process.

How do I apply?

Not wanting to fill out form after form. With Go Car Credit, applying for car finance with bad credit couldn’t be easier.

Enter a few details into our safe online application form in a matter of minutes. Once we’ve given you a decision, we’ll ask for some details on your vehicle of choice before asking for you to give an online signature if you want to go ahead.

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