Am I eligible for car finance?

Before you apply for car finance, it’s a wise idea to check whether or not you would both be eligible for and qualify for a loan. We answer the most common questions our customers ask to determine their car finance eligibility.

Who can apply for car finance?

Those who are over the age of 18 – there’s no upper age limit to applying for car finance.

Do I have to have a full driving licence to apply for finance?

No, you do not. You will need a full licence if you intend to drive the car on your own, however you do not need one to apply for car finance. You’ll also need to provide some form of identification so you will need a provisional licence or passport.

I think I may have been blacklisted in the past, am I eligible for finance?

There is no such thing as being blacklisted for car finance. Your credit rating simply contains information about your credit history and a relevant score. If one finance company declines your application, this does not mean that you won’t be able to get finance elsewhere. The better your credit rating is, the more likely you are to be accepted, but there is no official blacklist that you would be put onto for having a poor credit history.

I am not British, can I apply for car finance?

Individuals of any nationality can apply for car finance or a car loan in the UK if they have lived in the country for three years or more. This time period allows you to build a credit history in the UK. However, you may want to do that before applying.

What car finance can I qualify for?

There are four main types of car finance: PCP (Personal Contract Purchase), PCH (Personal Contract Hire), HP (Hire Purchase) and Personal Loan. The type of finance you choose will depend on your circumstances and preferences, and you can find out more about each type in our car finance explanation article. The lender your finance application will be given to will depend on your circumstances as well as the car you choose. When you speak with one of our experienced salespeople in branch, the best finance company for you will be chosen from the range of over 20 finance companies we have access to.

Do I need to be working to be eligible for car finance?

You are eligible to apply for car finance if you’re unemployed, but as you may be required to show proof of annual income, you’re less likely be accepted than someone in full-time employment. There are some finance companies that would accept your application but you may find that you end up paying a higher interest rate with a subprime lender. A subprime lender specialises in lending to borrowers with a less than perfect credit history. A subprime loan is characterised by less favourable terms and higher interest rates (than prime loans). These rates and terms are defined by how much of a risk the lender evaluates you to be.

You are also eligible if you are retired or self-employed. In these cases, proof of income may be required.

What is a guarantor loan and why would I need it?

A guarantor loan is a type of unsecured loan that requires a third person who is not financially linked to you, known as a guarantor, to sign the contract agreement. By signing the agreement, the guarantor is agreeing to pay back the loan should you default on repayments. You might need a guarantor if you’re young and have a limited credit history, or a lender might be chosen for you that asks for one. The loan would work in the same way as any other car loan, but at the point of signing the documents, you would need a guarantor to co-sign them.

If I get car finance, how much can I afford?

This is your own decision and nobody should influence that. You need to assess your finances to make sure you can afford the monthly repayments, insurance, tax and maintenance of a car. The finance company will also decide how much they believe you can afford to repay when deciding on how much to lend.

Our rates for used car finance are as little as 7.9% APR representative with a low deposit.

How can I improve my chances of being accepted for car finance?

There are several factors a finance company will look at in order to define your eligibility for finance. They will check an applicant’s address, whether or not they are on the electoral roll and any previous names they may have had. When applying for any finance it is advisable to ensure all of your personal details are correct and that you are registered on the electoral roll.

Arnold Clark Automobiles Limited is authorised and regulated by the Financial Conduct Authority and acts as a credit broker, sourcing credit to assist with your purchase from a carefully selected panel of lenders.