Can I get car finance if I am on benefits?

For many, a car is fundamental. Whether we need to take our children to school, drive to the doctors, or just getting ourselves to work, a car is an important part of 21st-century life.

Buying a brand new car outright is not an option for many. Some would rather save the money for something else, and others simply do not have the money. So, car finance is an option. But, is it viable?

We get quite a few customers ring up and ask whether they can get approved for car finance if they are on benefits. And the answer is yes, you can. However, there are some things you should consider first.

Are you able to make the payments?

This is an important thing to consider before we go any further. Can you afford the payments?

Because of a part, or all, of your income, is from the welfare system, any lender will base your ability to pay on your total income from the benefits, against your financial outgoings.

Before they do this, you will need to take a look at your incomings and outgoings to see whether you do indeed have enough money left at the end of the month to pay for the finance.

Applying for finance blindly only to find that you can’t actually afford it, can leave a bad footprint on your credit rating.

Can I Get Car Finance if I’m on Benefits But Have a Good Credit Rating?

Having a good credit score will support your case as it proves that you can manage your money just as well as someone who is not receiving benefits. Having a good credit score will open a number of options for you.

However, it is vital you check your credit score beforehand. This is because multiple credit checks done by funders could damage your credit score. Which isn’t ideal if you want to be approved for car finance.

Can I Get Car Finance if I’m on Benefits and Have a Bad Credit Rating?

Unfortunately, if you have a poor credit rating and are on benefits then that’s a double blow against you.

The chances are, a lender will not approve a loan if you have both a bad credit rating and are on benefits. This is because it does not give them the impression that you will be able to afford it.

However, there is still a chance you can get car finance. And that is by getting a guarantor. You can read more about getting car finance with a guarantor here.

What is a Guarantor?

Good question.

A guarantor is someone that will take over your payments if you miss one. So, if you can’t pay, the finance house will turn to your guarantor, who will pay for it on your behalf.

If you end up defaulting on a loan or you cannot keep up the repayments, the lender will look to your guarantor to make the payments. You aren’t let off the hook by the way; they will be chasing both of you at the same time.

If you and your guarantor both fail to make the payments, then the lender can take you both to court.

Who Can Be My Guarantor?

[vc_single_image image=”38692″ img_size=”article-image”]Your guarantor can’t just be anyone. There’s a criteria that must be met before they can become your guarantor.

They must;


  • Be 21 years of age or older
  • Have a strong credit rating
  • Not be financially linked to you


Traditionally, your guarantor is a family member or a close friend but it can be anyone you trust as long as they meet that criteria.

What are the advantages to using a guarantor?

Using a guarantor can be particularly advantageous if you are claiming benefits and have a bad credit rating. Some of those are;


  • You are more likely to be approved car finance
    • This is because it gives the finance company peace of mind that they will get their money back. You become much less of a risk if you have a guarantor.
  • The interest rate could be less
    • Compared to a funder who specialises in those with poor credit
  • It can help boost your credit score
    • Say you cannot get approved car finance without a guarantor. If you find someone who will be your guarantor and you make the payments on time, this boosts your credit rating.


It should be noted that being a guarantor is a huge responsibility and should not be decided at the last minute. You need to seriously think about what you are agreeing to do before you sign along the dotted line. You can read more about getting car finance with a guarantor here. 

So, you can get car finance if you are on benefits. However, it will be difficult and there is a high chance that you will not be approved. You can boost your chances by getting a guarantor but this is something that you should take some time to think about before you agree to anything. 

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