Getting approved for car finance is not half as scary as it sounds. Honest. But, it does get a whole lot less scary once you know exactly what finance companies are looking for.
Arming yourself with the right kind of knowledge will save you a lot of hassle in the long run.
Our sales experts know exactly what the finance companies are looking for and they talk people through the process every day.
We understand that it can be a daunting task, so we’ve written an article explaining exactly what finance companies are looking for and how you can boost your chances of getting approved for car finance.
Are There Minimum Requirements For Getting Approved Car Finance?
Often, the minimum requirement for getting approved for car finance is employment.
If you have a job, either part-time or full-time, you have a greater chance of securing car finance. If you do not have a job, then there’s still a chance you can get approved for car finance.
If you have an income that is supplemented and strengthened by benefits then there is still a chance that you will be approved for car finance.
Ultimately, it’s essential for the finance company to know that you will be able to make monthly payments. It’s for this reason that it’s important that you have a regular, stable income.
Check Your Credit Report
Believe it or not, credit reports often come with at least one error.
A recent study carried out by the American Trade Commission (FTC) found that 26% of us have at least one minor error on our credit report. The study also found that 5% of us have major errors. This has led to people being denied credit, having to pay higher rates of interest, or even being denied car finance.
The FTC also found that if you dispute the errors on your credit report, you have 50% chance of actually increasing your credit score.
So you should definitely check your credit report before you apply for car finance. If you see any errors then you need to dispute them. Some finance companies will approve or deny finance based on your credit score alone, so it’s important that you check beforehand.
On a side note regarding the statistic above, both America and the UK tend to have the same credit score companies, so there is no reason to presume ours is more accurate. As a company, we experience errors in people’s credit scores weekly.
Can I Get Approved for Car Finance If I Have a Bad Credit Score?
One of the easiest ways of securing car finance is by having a good credit score.
Which can be disheartening if you have a less than perfect credit score.
However, there are ways in which you can get car finance even with a poorer credit score. Some brokers will have access to specialist finance that work extensively with people with a lower credit score.
Be aware though, if you do have a poor credit score then there is a chance that your monthly payments will be higher. This is because you are seen as a higher risk to the finance company. You can read our article on leasing with bad credit here.
Alternatively, you can use a guarantor. But we’ll talk about that in a minute.
Shop Around for Rates and Deals
You can secure car finance with either a dealership, an independent vehicle supplier or a bank. But, each lender will have different rates, different deals and different options available to you.
For example, some companies will be happy to work with 18-year-olds, but there will be some that won’t. Some will still consider you even if your credit report is less than perfect. Others, on the other hand, will not. To find the best deal that is perfect for you, I advise that you do some shopping around rather than using your nearest dealership out of convenience.
By shopping around, you can find out which options would be best for you. That way, you are fully prepared when you do decide it’s time for you to speak to a dealer or a vehicle supplier.
Honesty is the best policy, after all.
Sometimes, people are tempted to make a false application in an attempt to guarantee car finance. This is particularly tempting if they have a poor credit rating. However, a false application can be easily spotted. And, in the event of a false application, you’ll be denied finance and possibly blacklisted. It’s just not worth it.
You need to be honest about your financial situation and history. You’ll be surprised at how flexible finance companies can be as long as they get reassurance that your financial future is looking brighter than your past.
Andrew has been in the motor trade for over 20 years. What he enjoys most about his job is the team spirit and the dedication of his work colleagues. He also appreciates the teams input in the improvement of the company.
Latest posts by Andrew Kirkley (see all)
- Should I use a Car Broker? - 14th August 2018
- What are hydrogen fuel cars? Are they are real possibility? - 22nd January 2018
- Six secrets to know when renting a car - 19th January 2018