Car finance for bad credit

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A new car is one of the most expensive purchases most ordinary people will make in their lifetime. And while they’re usually necessary – whether you need them for work, shopping or the school run – when even the cheapest new car costs thousands of pounds, it can be hard to get all the money together.

That’s where car finance comes in. There are a few options available, including car loans, hire purchases and personal contract purchases, and plenty of firms which specialise in lending people the money they need to drive off with the new car they need. 

Your credit score is important when you take out a car loan: the better your financial history, the better the interest rates you’ll be able to find. But don’t despair if you have a low credit rating – you will have slightly fewer available options, but you should still be able to borrow the money and make the purchase.


Bad credit car finance is a type of loan that’s offered to people who have a poor credit history, and who might not be able to find other types of loan.

If you have bad credit – or if you’re young and don’t have much credit history at all – you should expect to find car loans with worse terms, but options are available for responsible borrowing.

Personal loans

Secured loans

Guarantor loans

Credit cards

Other arrangements

Our eligibility checker shows you the loan rates you’re guaranteed, helping you protect your credit score and apply in confidence.

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Credit Monitor will help you take control of your credit score, with free personalised tips to help you improve your score - this could give you a wider range of loan rates to choose from.

Check your score for free with Credit Monitor in as little as 3 minutes.

We compare offers from a wide range of lenders from across the market

We work with over 30 loan providers including most of the big brands to help you borrow the money you need.

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Who can get a car finance loan?

You generally have to be over 18 to get a car loan, and lenders will often have their own specific requirements. You can find out more by looking at their website or contacting them directly, by phone, email, or post.

It’s worth remembering that you should only apply to loans from lenders who are likely accept you. This is important as too many rejected applications for loans or credit can look bad on your credit report.

How do I apply for a car finance loan?

To apply for a loan you’ll need your address, contact details, details about your incomings, expenditures and employment. You’ll also need to mention how much you want to borrow, and for how long.

MoneySuperMarket is a great way to find excellent options to suit your needs, though you’ll also be able to apply to most lenders by phone, email, through their website or via a postal form. However before you do, you should make sure you’re in the best place to make a successful application.

Can I repay my car loan early?

This depends on the lender. Some loan providers will charge you extra fees if you start making higher repayments than have been agreed, but others may allow it.

What are secured and unsecured loans?

A secured loan is a loan you can take out that’s tied to an asset of yours as security. For example a mortgage is a type of secured loan, and the asset would be the house you take the mortgage out on – when you repay the loan the house is yours, but if you don’t repay then the lender could seize your house. These are uncommon for car loans.

An unsecured loan isn’t tied to any collateral, and as a result you normally need at least a fair credit score to qualify. There is also often a maximum amount you’ll be allowed to borrow.

What is a soft search?

A soft-search or soft-application is a way of finding out where you stand in terms of getting a loan without leaving a mark on your credit report. It’s a useful way of finding a loan you’ll be eligible for without harming your chances of being accepted. MoneySuperMarket’s loan Eligibility Checker uses a soft search.

What happens if I miss loan repayments?

Missing repayments can mean you might be fined by your lender, and it could also end any low or zero interest incentives you have. It may even lead to a hike in the interest rate you’ll make future repayments at.

What is APR?

APR, or your Annual Percentage Rate, is the interest rate at which you pay back money you’ve borrowed. It takes into account the actual interest rate you pay, plus any other fees or charges involved in the deal, to give you a more complete picture of what you loan will cost.

When you see a rate advertised as the representative APR, this means the lender is required to offer this rate to at least 51% of applicants – however it doesn’t mean you’re guaranteed to receive this interest rate yourself.


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We commit to providing you with clear and informative answers on all points such as this, so we have gathered the relevant information on this page.