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Bad credit car finance

FInd a car finance deal even with bad credit

  • Representative 23.9% APR

  • Searching won't harm your credit score

  • You can sort the deals by the likelihood you'll be accepted

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Compare car finance deals for bad credit from across the market

Our partner Motiv works with a range of providers, including the big car finance brands, to help you borrow the money you need.

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Can I get car finance with bad credit?

In most circumstances, yes. Even if you’ve had difficulties getting credit in the past, 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.

There are a few main types of car finance including Personal Contract Purchase (PCP), Hire Purchase (HP) and a car loan.

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What types of car finance are available with a bad credit score?

There are lots of different types of car finance to choose from. Some options may be more affordable if you have a low credit score

  • 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.

  • 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.

  • 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 and charges to pay on top of the loan.

How much will car finance cost me if I have poor credit?

Car finance is likely to be more expensive if you have a low credit score, but there are ways you can keep costs down. These include:

  • Buying or leasing a cheaper car or one which won’t lose its value as quickly

  • Extending the deal term to bring down monthly payments – although you’ll pay more in interest overall

  • Improving your credit score to boost your range of options and lower pricing

This table gives a guide to costs for a hire purchase deal for someone with a lower credit score (at Representative 19.9% APR).

 

36 month example

Car Price

£8,500

Deposit

£500

Representative APR

19.9%

Option to purchase fee

£10

Monthly cost

£290

Total cost of credit

£2,463

Why compare car finance for bad credit with MoneySuperMarket?

We work with our partner Motiv to find specialist car finance deals for buyers with bad credit.

  • It’s quick and easy

    We'll ask you a few quick questions to check your credit rating. Rest assured: it won’t harm your score

  • We search the market

    We'll use the information to find the best deals available to match your circumstances 

  • Weigh up your options

    You’ll be able to sort car finance options by overall cost and the likelihood you’ll be accepted 

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:

  • Tick

    Get on the electoral roll

    Serves as proof of address and is checked by lenders as part of your credit score

  • Tick

    Don’t use all available credit

    Not maxing out your credit limit means potential lenders will view you as managing your finances responsibly

  • Tick

    Pay your bills on time

    Missed payments can leave a mark on your file that could negatively affect your rating for a long time

  • Tick

    Use Credit Monitor

    Check your score for free with our credit monitor tool. Correct any errors and get tips on improving your rating 

Can I get a car finance deal without having a credit check?

You won’t be able to get a car finance deal 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.

Car illustration
Emma Lunn

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.

"
- Emma Lunn, Personal finance expert

Compare car finance for bad credit with MoneySuperMarket and Motiv

We’ve teamed up with Motiv to bring you the best car finance deals available

  • Tell us about yourself

    Let us know a few details about your finances and what you’re looking for

  • We scour the market for best deals

    We’ll search for finance deals suited to you and your financial situation

  • Select and apply online

    You can filter and compare options, and then apply online in minutes

Each car finance provider will take its own view on your credit rating before deciding whether to offer you finance and at what rate. The better your credit score, the better deal you’re likely to get. However, through our partners, Motiv, we work with specialists in dealing with those with bad credit scores, so will always try to find a solution that works for you. 

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.

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.

You can apply, but you’re not guaranteed to be approved. 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.

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.

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.

You’re likely to get a better deal on your car insurance policy if you pay an annual lump sum rather than in monthly instalments. This is largely because in a way monthly payments are similar to taking out credit – you’ll be covered in full, but without having paid the full amount yet. 

Paying monthly can be useful as you’ll be able to spread the cost out, but you will end up paying a little extra overall.

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.

This will depend on the type of car finance you are seeking. For car finance 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.

This will depend on your financial situation and the view taken by the car-finance provider. Key factors include how much you can afford for the monthly repayments – dictated by your income and outgoings – and your credit rating.

Whether car finance is a good idea with a bad credit score depends on the individual. 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.

MoneySuperMarket gives you lots of clever ways to save a lot, by doing very little.

  • Take control of your credit score by checking and improving it for free with Credit Monitor

  • Never overpay again with Energy Monitor, our energy monitoring service

  • Over 50 ways to Get Money Calm

So how do we make our money? In a nutshell, when you use us to buy a product, we get a reward from the company you’re buying from.

But you might have other questions. Do we provide access to all the companies operating in a given market? Do we have commercial relationships or ownership ties that might make us feature one company above another?

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.

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