In this day and age, most households need access to a car whether it be to make the school run, pick up the weekly shopping, or take the family out on a weekend adventure.

If you have previously had issues with credit, you may be wondering if you could still finance a car for your household. At UCan, we believe everyone should have access to a vehicle, no matter what their situation. 

In this blog, we’ll explain how you may still be able to get car finance with bad credit.

Can I Get a Car Loan with Bad Credit?

Yes, it’s possible to finance a car with bad credit. With most lenders, such as a bank, it may be more difficult to get your car finance approved as they may perceive buyers with previous credit issues as posing a greater risk when it comes to repayments. This might especially be the case when you’re looking to borrow larger sums of money.

At UCan, we specialise in helping people with previous credit issues get access to affordable finance. Many of our previous happy customers were likely to struggle to get a loan from a bank, but we were able to help them.

How Does Poor Credit Car Finance Work?

Buying a car with bad credit can be a simple process. First, you will need to find a provider, submit some personal information, find an agreeable repayment plan to fit your financial situation and then choose the perfect car for you that fits your budget.

This is likely to be the process no matter your credit history, the only thing that may change is who your provider and lender are. As mentioned, lenders, such as banks, want to minimise risk when handing out a loan, so you may find it more difficult to get finance through them with poor credit.

Luckily, there are a range of finance providers in the market that operate at different levels of risk. Independent lenders may be willing to offer you finance where mainstream banks would not, however, the interest rates could be higher. Ultimately, lenders won’t offer you car finance at all if they don’t have confidence in your ability to repay the money borrowed, but with that in mind – it’s absolutely crucial that you budget carefully to make sure that you can afford to take out a finance agreement. 

What About Interest?

With a car finance plan, there will be an interest premium on top. Simply put, interest rates are how much extra you will pay on top of the sum borrowed for the car. The lower the interest rate, the less you will pay for the repayment plan in total.

Does This Limit My Chance of Getting a Car?

Bad credit doesn’t have to limit your chances of getting a car. You should budget for yourself and figure out what is repayable in the short-to-medium term, create a forecast for yourself that takes into account your monthly incomings and outgoings, and choose a finance amount that fits your repayment ability. Then you will know your own budget for your new car.

How to Tell if I Have Bad Credit?

The quality of your credit can be better understood with a credit check. These credit checks take a look at your credit history and give you a numbered rating based on how well your finances are managed. 

Credit checks are usually carried out by one of the three main credit reference agencies: TransUnion, Experian, and Equifax. However, these days your bank may well offer the service via your app or other providers use one of these agencies to also check your score. These agencies use a different scoring system but the general rule of thumb is that the lower your number is, the worse your credit score is.

There are a lot of credit score checkers out there so choose carefully and make sure they’re partnered with one of the three main credit reference agencies. 

However, this is not the whole story and specialist lenders will consider a range of characteristics to decide if you qualify for finance or not.

What Classes as a Bad Credit Score?

The credit checker you use will advise you on what your score means for you and will offer ways to improve your credit. But again your credit score is not the only important factor in whether you qualify or not.

Find The Right Deal For You with UCan

At UCan, we can help you find the perfect vehicle to fit your lifestyle and current credit status. We stock a wide range of vehicles including coupes, hatchbacks, SUVs, and saloons from a variety of the world’s finest manufacturers.

If you feel like this article is relevant to your financial situation, get in contact with our friendly experts and they can assist in finding the perfect car finance plan for you.