Can I get car finance with a Guarantor?

If you’re having difficulty getting approved for car finance, then you might want to consider getting a Guarantor. Having a Guarantor is ideal if you:

  • Have a poor credit rating
  • Want to borrow more than the lender is happy or comfortable with
  • Are someone with next to no credit history (this may be your first loan application)

So, what exactly is a Guarantor and how do you go about getting car finance with their support?

We advise a lot of people about car finance, both with and without a Guarantor, so we understand that it can be a difficult concept. That’s why we’re going to talk you through exactly what a Guarantor is and how they can help you to get car finance.

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What is a Guarantor?

So, what exactly is a Guarantor?

Quite simply, a Guarantor is someone who will take on the responsibility of making your finance payments in the event that you default on your arrangement. This means that if you miss a payment on your car, your Guarantor will have to pay it.

Who can be a Guarantor?

If you are looking to family or a friend to become your Guarantor there are some criteria they must meet. Your Guarantor must be:

  • 21 or over
  • Have a strong credit rating
  • Not financially linked to you

Traditionally, a Guarantor is a family member or close friend, however, you can ask a work colleague to be a Guarantor.

Guarantor - Mother and teenage son looking at laptop

So, if you’re a young driver struggling to get finance because you don’t have a credit rating or your credit rating is low, you can ask one of your parents to be your Guarantor (as long as they are not financially linked to you).

A Guarantor loan is not a new concept. Before computer credit scoring became the number one trust-based system, Guarantor loans were largely how banks used to lend money.

Admittedly, car finance with a Guarantor isn’t something you hear about often; however, many mortgage companies and landlords continue to ask for a Guarantor, especially if your credit rating is low or you don’t have one (for whatever reason).

What happens if I default on my loan?

If you end up defaulting on your loan, or you fail to keep up with your payments altogether, then the lender will turn to your Guarantor. At the same time, the lender will continue to chase you for outstanding payments and any interest you have accrued.

If neither you nor your Guarantor makes a payment, the lender could take you both to court.

What should I consider before becoming a Guarantor?

We’re going to be honest here; being a Guarantor is a rather large responsibility. While you may be confident that your child, best friend or work colleague will make their payments on time, there is a chance that they won’t. If that happens you will have to ensure that you have enough money available to cover the payment. While this is unlikely to happen, it’s something you should think about.

Therefore, before taking on the responsibility of becoming a Guarantor, you should ask yourself the following questions:

  • Why does your friend/family/colleague need a Guarantor?
    • Is the person asking you going to make their payments on time?
  • Is there a chance they will have issues making any of the payments?
  • Do they really need to use car finance, or could they just use their savings?
  • Are they responsible enough for a loan?
  • Are you really willing to back their car finance?
  • What would you list as security?
    • In the unlikely event that they can no longer make the payments, is the car worth more than the remainder of the loan? You need to have that sort of security otherwise you could be left with the rest of the loan to pay.

Of course, these are just suggestions. But, as we have previously mentioned, becoming a Guarantor for anyone is a big responsibility and you do need to take your time to seriously consider whether this is a commitment you feel comfortable with. If you have doubts or questions that you can’t answer, then you really shouldn’t do it,

What are the advantages of having a Guarantor?

There are quite a few advantages to using a Guarantor. These advantages include:

  • The interest you are charged could be less
    • This is compared to a funder who specialises in people with poor credit
    • This could also mean you could get a car you previously wouldn’t have been able to consider
  • It’s a good way to get on the credit score ladder if you don’t have one.

Getting car finance using a Guarantor is a viable option for many. Especially if you’re a young driver or you would like to borrow more than your lender will allow (or is comfortable with loaning to you). However, it’s not an option that should be taken lightly by the potential Guarantor.

If you have been asked to be a Guarantor you should definitely think about it carefully before you agree to anything, and most definitely before you sign anything. Therefore, we do advise that you speak to a bank, your broker or dealership before making any final decisions.


Request a call back and one of our specialists will be in touch within one working day to talk you through your options.

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