How to get a car with bad credit

Buying a car isn’t always straightforward, and when you have the issue of bad credit standing in your way, it can be an even more daunting task. You’ll not only have to consider the best way to finance your car, but you’ll also need to question whether it’s even going to be possible.

So, if you’ve got queries such as how to get a car loan with bad credit?’ And ‘where can I get a car with bad credit?’ We’ve created an insightful guide to help you. We’ll show you some practical ways in which you can achieve your goals and take charge of your financial future.

Why might it be difficult to get a car if I have bad credit?

First things first, let’s take a look at what exactly a bad credit score is, and why it might impact you when purchasing a car.

What exactly is a bad credit score?

Put simply, your credit score is your financial history. Lenders will use this history as a baseline to assess the risk of them lending you credit (such as car finance). If you have bad credit, you might have previously failed to meet payment deadlines, or you may have struggled with your finances in the past.

Bad credit inevitably causes concerns for lenders who may worry about your ability to pay back a loan. They might turn you down completely, or charge you a higher interest rate as a way of mitigating the risk. With a bad credit score, you may also face limited finance options, as well as a restricted selection of vehicles.

It’s also important to note that if you apply and are rejected, this will leave a mark on your credit report. To make sure your credit score doesn’t dip further, you should think carefully before applying for a loan of any kind.

Is it possible to get car finance with bad credit?

With bad credit, securing car finance can feel like an uphill battle. This is not to say that it’s an impossible task, however. Car finance is a great way to get behind the wheel of a newer vehicle, and there are ways in which you can boost your chances of being accepted:

• Improving your credit score: this is the first and most important option on our list. It’s never too late to work on bettering your credit score, and an improved score will not only help you get finance, but it will also contribute to your overall financial health.

• Ask whether you can put forward a guarantor: a guarantor is someone who agrees to step in and make payments if you fail to do so. With a guarantor, a lender is more likely to accept you as the risk of them losing out is lessened. Why not delve into our guarantor guide to see whether this may be a good option for you?

• Adjust your expectations: you’ll have to be realistic when considering your finance options. Borrowing a smaller amount for a cheaper car for instance may increase the likelihood you’ll be loaned the money.

Where can I get finance with bad credit?

Now you know how you may be able to get finance, let’s delve into where exactly you should look for it.

Most car dealerships offer finance options, and because you’re securing a deal against a physical car, there may be lower requirements (as the car can be reclaimed if you fail to make payments).

Because of this, it’s important to ensure you can comfortably meet deadlines if you’re thinking of signing an agreement.

Some banks also offer car finance, and interest rates can be lower than those offered by dealerships. You should compare banks before settling on one and also use an eligibility checker to see whether you’ve got a chance of being accepted. As mentioned, this is essential, as you don’t want to damage your credit score even further.

To apply, you’ll need proof of ID (such as a driving license or passport) as well as proof of address, and sometimes an upfront deposit.

Remember, if you do manage to get approved for finance, making consistent payments will significantly contribute towards an improved credit score.

Should I take out a separate loan?

You may be wondering whether you should take out a separate loan to purchase a car, well, there are a few things to consider before doing so.

Personal loans can be used for almost anything, including to purchase a vehicle. Banks offer these loans, but they are sometimes secured against assets such as your home, so you’ll need to carefully consider whether you can afford the repayments. Never commit to something you’re unsure of, and make sure you’re clued up on the repercussions of failing to pay.

There’s also the option of specific bad credit loans, designed for those with little to no credit history or a negative one.

We’ve got more information on flexible and fair bad credit loans for you to dive into. So, before applying, make sure you’re clued up on the intricacies of borrowing with bad credit.

Taking out a separate loan is a feasible option, but you’ll need to be strict with your repayments to ensure your credit history doesn’t decline further.

Why not head over to our guide on what to consider before taking out a loan? There, you’ll find more information on credit scores, interest rates, and any fees you should expect. Similarly, our guide on how much can I borrow with a personal loan might be of use.

Moneyboat’s top tips for transforming your credit score

If you’re still wondering how to buy a car with bad credit? First and foremost, we recommend you work towards improving your credit score. Here are some ways in which you can improve yours:

• Regularly check your credit report and dispute any discrepancies or previous errors.

• Stay super organised and keep on top of any future payments. You’ll have to be proactive, and constantly keep your finances in check.

• Make sure to pay your bills on time, as your payment history is one of the most significant factors when it comes to your credit report.

So, it’s evident that securing a car with bad credit requires strategic planning and patience, but it’s certainly not an impossible task.

Hopefully, you’ve now got a clearer idea of how to get a car with bad credit, and specifically how to get car finance with bad credit. Obtaining a car isn’t something which will happen overnight, but it is more than possible to improve your credit score and get behind the wheel of a vehicle sometime shortly.

Remember, understanding your credit score (and the impact that it can have) is key to paving the way to a more financially healthy future.

Representative Example

Based on the last working day of each month

Interest rate 255.5% pa (fixed) Representative 939.5% APR

Compare payday loans.

Warning: Late repayments can cause you serious money problems. For help, go to www.moneyhelper.org.uk.

Warning: Late repayments can cause you serious money problems. For help, go to www.moneyhelper.org.uk.

Representative Example: Borrow £400 for 4 months, 4 monthly repayments of £149.37. Total repayment £597.48, interest rate p.a. (fixed) 255.5%. Representative APR 939.5%.Compare Moneyboat loans.

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