Make your choice
Decide which car finance option is right for you, from PCP or HP.
Compare car finance deals from across the market
Our partner Motiv works with a wide range of providers, including the big car finance brands, to help you borrow the money you need
Can I get accepted for car finance with bad credit?
In most circumstances, yes. Even if you’ve had difficulties getting credit in the past or have a poor credit history, there may still be car finance options available to you.
Our partner Motiv works with a range of specialist lenders to track down some of the best car finance deals, even for those with a lower credit score.
Can I get a deal without having a credit check?
You won’t be able to get a finance agreement from a reputable dealership without passing a credit check. This is because car finance is a form of borrowing and, as with a mortgage, loan or credit card, the loan provider needs to be confident you can afford to pay it back.
While too many credit checks in a short period can potentially lower your credit score, MoneySuperMarket’s partner Motiv runs a soft search first to show you the deals you’re most likely to be approved for.
A soft credit check won’t impact your credit score and won’t be visible to lenders when you apply for further credit.
What types of car finance are available with a bad credit score?
1) Personal Contract Purchase (PCP): Pay a deposit then borrow towards some of the remaining value of the car. At the end of the contract, make a large final ‘balloon’ payment to keep the car, return it, or take out a new PCP on a new car. Compare PCP deals.
2) Hire Purchase (HP): Pay a deposit then make monthly payments. You’ll own the car after you’ve made the final payment, plus any fees. There are not usually any restrictions on your mileage during the HP contract. Compare HP finance.
3) Car loan: Take out an unsecured personal loan to buy the car outright and spread the cost by making monthly repayments. There are no extra fees to pay on top of the loan and this can be a great option if you're buying a used car. Compare car loans.
What are the pros and cons of car finance for bad credit?
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Pros
Can access vehicles you otherwise couldn’t afford
Decent selection of cars to choose from
Opportunity to rebuild your credit score
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Cons
Expect to be offered higher rates
Your choice of lenders is likely to be relatively limited
Higher-end cars are likely to still be out of reach
What is the best financing option for me?
When deciding, consider the affordability, how long you want the car for, and if you want to own the car once the deal is finished.
Personal loan | HP (Hire Purchase) | Personal Contract Purchase (PCP) | |
|---|---|---|---|
Deposit needed | No | Likely | Likely |
You own the car straight away | Yes | No | No |
You’ll own the car at the end of the deal | Yes | Yes | No (unless you pay off the remaining balance – but this is likely to be a large final payment) |
Secured (against the car) | No | Yes | Yes |
Excess mileage charges | No | No | Yes |
Monthly payments | Yes | Yes | Yes (are often lower due to the balloon payment) |
Available with bad credit | Yes, but expect high rates | Likely | Likely |
How do I improve my credit score to get a better car finance deal?
Here are four main ways to improve your credit rating to get better car finance terms:
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Get on the electoral roll
Serves as proof of address and is checked by lenders as part of your credit score
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Don’t use all available credit
Not maxing out your credit limit means potential lenders will view you as managing your finances responsibly
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Pay your bills on time
Missed or late payments can leave a mark on your credit report that could negatively affect your rating for a long time
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Use Credit Score
Check your score for free with our credit score tool. Correct any errors and get tips on improving your rating
Our expert says…
Bad credit can make borrowing cash to buy a car more difficult – but it’s not impossible. If you’re not eligible for a personal loan due to a poor credit score, you could look at hire purchase (HP) instead. With HP, the car still belongs to the lender until you finish making payments. This makes people with bad credit less risky for finance providers, so you could get a deal for the wheels of your dreams.
Kara Gammell Personal Finance & Insurance Expert
Compare car finance with MoneySuperMarket and our partner Motiv
Find the right car finance option for you and see which rates you’ll be guaranteed to get
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More expert guidance on borrowing with poor credit
Can I get car finance if I’ve been declared bankrupt?
You aren’t allowed to take loans out while you’re going through bankruptcy. It gets easier once the bankruptcy has been discharged, but there’ll still be a mark on your credit history that will prevent you from getting the best deals for a minimum of six years. This means you will be able to get car finance eventually. In the meantime, it’s worth trying to build up your credit score in other ways.
Can I get car finance if I’ve got a CCJ?
You can get car finance if you’ve been issued with a County Court Judgment (CCJ), but approval is harder to come by. Lenders are likely to charge more to customers with a CCJ, or you might have to seek car finance from a specialist lender. Once the CCJ is marked as paid, it should be detailed on your credit rating and help with getting finance in the future.
Can I get car finance if I’ve defaulted on a loan?
You can apply, but you’re not guaranteed to be approved if you’re been in arrears with credit repayments in the past. Loan defaults stay on your credit record, and will show up when a lender looks at your application. This can make it harder to get all kinds of credit in the future.
Does applying for car finance affect my credit score?
MoneySuperMarket uses a soft search of your credit history to ascertain whether you’ll be eligible for the loans we list. This will not harm your credit score. However, if you then apply for a loan you’re not likely to get, the lender will use a hard search which may affect your score.
Can I get car finance if I have no credit history?
You may still be able to get car finance if you have no credit history, but it may be more expensive. Options to help include starting to build your credit history through other sorts of borrowing, such as a credit card – although make sure you understand how they work and keep on top of repayments. Some car finance providers may also allow a guarantor to co-sign an agreement with you. Alternatively, a few specialists may do no-credit-check finance, but again this is likely to be more expensive.
Can I pay off my bad-credit car finance early?
Just like any loan, you will be able to pay off your bad-credit car finance early, but you may face an early repayment charge.
Calculate whether the amount you will save in interest will outweigh any financial penalty you receive. You may also want to consider other factors, such as being free of car finance if you want to borrow elsewhere, i.e. a mortgage or different loan.
Can I get bad-credit car finance without a deposit?
This will depend on the type of car finance you are seeking. For car finance agreements such as hire purchase or PCP you are likely to have to pay a deposit whether you have bad credit or not. If you take out a car loan, you will simply be borrowing the money to pay for the vehicle so won’t need a deposit.
Is car finance a good idea with a bad credit score?
Whether car finance is a good idea with a bad credit score depends on the individual and their financial situation. If having a reliable car is critical for you to be able to earn an income, then car finance could be justified even if it takes a chunk out of your income. But if the car would be more of a luxury and your finances really can’t stretch to further borrowing, then it would probably be a mistake.
Can I get 0% finance with bad credit?
No, you generally cannot get 0% finance with bad credit. These deals are typically reserved for those with a 'good' to 'excellent' credit score because lenders want to ensure that borrowers won't miss repayments.
Can you get car finance on universal credit?
Yes, it is possible to get car finance while on Universal Credit. There are options such as hire purchase (HP) which are available and popular due to the straightforward process. Some lenders also offer car finance with no deposit, even if you have bad credit.
Can I get guaranteed car finance if I have bad credit?
Unfortunately, no lender offers guaranteed car finance. That applies whether the applicant has a good credit score, or has a record of failing to make repayments.
In all instances where you apply for credit a host of factors will be taken into account and the decision is very much down to your individual circumstances.
What happens if you miss a payment?
If you've got a bad credit rating but still took out a car finance deal, it's even more important that you make all your repayments on time and in full.
That's because a missed debt payment could cause even more damage to your credit score and result in a County Court Judgement against you.
What's more, any assets secured against the loan could eventually be repossessed.
If you're worried that you may struggle to may a payments, speak to your lender as soon as possible. The lender should be able to offer options to help you mitigate the problem.
Reviewed on 26 Dec 2025 by
