Bad Credit Car Finance
Compare lender quotes and you could save money on your monthly repayments.
- Save money on your car finance
- Get a quote in less than 5 minutes
- It’s fast, free and simple
How can I get car finance if I have bad credit?
One of the easiest ways to find cheap car finance it to compare quotes with us. We’ll show you the best deals from a variety of the UK’s most trusted car finance providers. You can compare hire purchase agreements based on, APR, deposits, term and age of vehicle.
There are plenty of things you can do to ensure you get the best deal:
We’re Bad Credit Car Finance Specialists
As car finance specialists, we understand that it’s not always possible to have the perfect credit score, whether you’ve not taken out credit before, or have experienced credit problems in the past. Bad credit doesn’t have to mean you can’t buy a car.
We know how difficult it can be to secure the right deal for bad credit car finance. That’s why we always go the extra mile to find the best deal for your individual circumstances. We’ll start by conducting a ‘soft search’ rather than a full credit check, so the initial application won’t affect your credit score. This will give us a clear indication on whether we can source credit for you and the kid of credit we can get. If what we initially offer seems right for you, only at this point, we will progress onto the full credit application.
Great experience and certainly easy to sort out due to the finance staff doing all the work so less hassle for myself. Recommended 100%
Excellent customer service from Sully was very patient and went above and beyond to make sure I got the car I really wanted I would have no hesitation recommending this company and if your looking for a new car speak to Sully.
Whole process was quick and easy. Special thanks to Joseph for going the extra mile to find me the perfect car.
On This Page
Bad Credit Car Finance
If you’re looking to get yourself a new car, one of the major options to consider is car finance, which you’ve probably already encountered frequently as you search for the best deals for bad credit. When you’re looking at car finance deals, you’ll want to be sure that you’ve got a good understanding of the type of car finance that’s in front of you - it isn’t always the same and each different type of finance works differently, with some more tailored to certain people than others. To help you to navigate your way through the car finance maze, we’ve put together our comprehensive guide to bad credit car finance, where you’ll be able to find all the information you might need to make an informed purchase decision. Read on to learn more about the deals available here at ChooseMyCar!
First, let's take a look at the different types of car finance that are available.
Each of these forms of car finance enables drivers to get back on the road in a safe, comfortable vehicle that’s available at a more affordable price than they would be to buy with a single up-front payment. By utilising a finance deal, you will be able to spread the cost of the vehicle over a number of years, with a monthly payment plan in place to help you manage to cost over the course of the contract.
Hire purchase: this is a type of car finance where the full cost of the vehicle is spread across the duration of the contract. There is no large balloon payment at the end of the contract - you’ll either become the owner of the car automatically after the last payment, or after paying a small final fee, which can be as low as just £1.
Personal contract hire: with this type of car finance, your monthly repayments tend to be much lower than with other deals such as HP car finance, however you will not own the car at the end of the contract. Instead, you’ll have the option to either hand the car back or select an upgrade - this is an ideal type of car finance for those who want to ensure they’ve got a new set of wheels on a regular basis.
Personal contract purchase: similarly to HP and PCH deals, you will spread the cost over a number of years and repay the credit amount over a series of monthly payments. The factor that sets PCP aside is the lower monthly payments and option to buy at the end of the contract. Should you wish to purchase the car once the agreement is over, you’ll be able to pay a pre-arranged balloon payment.
This is just a brief overview of the different types of car finance that are available to those who suffer with poor credit, but you’ll be able to read more about each of these further down the page.
How ChooseMyCar can help customers with bad credit
As car finance specialists, we understand that it’s not always possible to have the perfect credit score, whether you’ve not taken out credit before, are reliant on no credit checks, need help with debt management, or perhaps you have even filed for bankruptcy. Bad credit doesn’t have to mean you can’t buy a car.
We know how difficult it can be to secure the right deal for bad credit car finance. That’s why we always go the extra mile to find the best deal for your individual circumstances. We’ll start by conducting a ‘soft search’ rather than a full credit check, so the initial application won’t affect your credit score. This will give us a clear indication of whether we can source credit for you and the kind of credit we can get. For example, you might be in need of a guarantor loan or a specific PCP (personal contract purchase) or HP (hire purchase) car finance option. If what we initially offer seems right for you, only at this point, we will progress onto the full credit application.
Here are just some of the other ways we can help:
CCJs, defaults and arrears
Our network of trusted lenders can help you find finance, even if you have CCJs, arrears, IVAs or a debt management plan. It may be that you're self-employed. Whatever your situation, we could help you to secure car finance.
Approved, reputable dealerships
All our trusted dealerships are handpicked by our experts. That means quality cars, from quality dealerships. So, you can feel safe in the knowledge that your experience will be smooth from beginning to end.
Applying won’t affect your credit score
Representative 21.4% APR
We’re always transparent with our finance deals. Plus, we always find you the best rate. For starters, our representative APR is just 21.4%. Because putting you first is what we do best.
I have poor credit and I'm worried that I won't be able to get car finance - what are my options?
If you have a poor credit rating due to missed payments or anything else, we understand just how of a worry it can be when looking for new finance arrangements. But having bad credit isn't going to stop you from needing to be on the road with your own personal transport - here at ChooseMyCar, we understand this. In fact, having a car might be crucial to continue earning and begin improving your credit rating. Fortunately, you've come to the right place.
Whether you have a poor credit score, an IVA (Individual Voluntary Agreement), a CCJ, or if you have been refused car finance elsewhere, the friendly team of experts here at ChooseMyCar are here to help. We have years of experience helping to match customers with poor credit scores with manageable and affordable car finance across the country. Regardless of your financial situation, get in touch with us today for the guidance and advice you need.
The good news is that there are a few options open to you when it comes to your car finance application, even if you have bad credit. From taking steps to improve your credit rating and credit report, using a guarantor loan for added financial security, using our online car finance calculator to make sure of what you can afford, we will work alongside you as a finance company who will support and guide you through the process. Making a finance or loan application when you have bad credit can be daunting - we are here to help.
Your finance options if you have bad credit
If you’re looking for bad credit car finance, it’s likely that you fall into one of the common bad credit categories that typically make it more difficult to find car finance with most lenders - whilst this may seem like a hindrance, it doesn’t have to be. Here at ChooseMyCar, we’re experts when it comes to providing our customers with an affordable car finance package, even if they have bad credit. You can find more information on the types of bad credit car finance that we offer below:
A CCJ (County Court Judgment)
The first type of car finance we offer for those with bad credit is CCJ car finance, which helps those with County Court Judgements to get back on the road despite their past financial troubles. Having a past or present CCJ can hurt your chances of being successful in credit applications, but it does not mean that you will be automatically refused car finance - there are lots of variables, with specialist bad credit car finance providers offering tailored plans that account for your specific problems. With the help of a bad credit car finance expert, you’ll be able to find a finance plan that works best for you, meaning you could be back on the road much sooner than you initially might have thought.
How will a CCJ impact my car finance application?
Once it has been issued, your CCJ will remain on your credit file for 6 years, meaning that it will continue to make it tough to gain access to car finance or other forms of credit for that period. A CCJ will remain on your file even after the debt it relates to has been paid off, which means there are likely to be long lasting repercussions if you are handed one. This is one of the things that will be taken into consideration when you are being considered for credit and often contributes to your score being lower than you would like it to be.
This lower rating on your credit score becomes an issue when you are applying for new credit agreements, as it indicates that you have a history of failing to make payments on outstanding debts to the point where an official order had to be put in place for payments to be made. Whilst you may not fail a credit check solely down to your CCJ, a low credit rating will often result in the applicant being subjected to higher interest rates than those who have healthier scores might.
How can ChooseMyCar help?
Here at ChooseMyCar, we pride ourselves in being able to assist those in tougher circumstances with their car finance - we use a system that protects both the lender and the borrower, ensuring that payments can be made and unpayable debt is avoided. Get in touch with our team to find out how we can help you to get back on the road in a new vehicle using our bad credit car finance deals!
Finding a car under a debt management plan
Much like the impact of a CCJ, the presence of a debt management plan can often hinder the availability of credit and car finance for many people. A debt management plan is something that is put in place for individuals who have particular trouble managing multiple debts, often to the point where multiple creditors are pushing for more authoritative action to be taken against the borrower. Debt management plans (DMPs) take the control of the debt away from the individual, with the debt instead being handled by an external handler who will determine how much money is given to each creditor that the indebted owes money to. Rather than directly paying the money to their creditors, the individual would pay a lump sum to a debt management plan provider, who will then disperse this money fairly, prioritising the most pressing debts to ensure that no further action is required.
One of the steps that a DMP enforces is that you are not able to take out any more credit than what already exists on your account - this is to ensure that the amount that your debt is always reducing, never increasing. Whilst this may sound like car finance is out of the question, it doesn’t necessarily have to mean that. On the first glance, it does seem that car finance is adding further debt to your account, which is prohibited under a DMP, but it’s important that context and necessity are accounted for in this situation - even under a debt management plan, you may be granted the option to apply for car finance should it be deemed a possession that is entirely necessary to your circumstances. The rules around this can be quite strict, however, if you can prove that you need a car for specific reasons that are pivotal to the lives of yourself and your family, you will be able to apply for car finance.
There are a few criteria that are considered when trying to decide whether a car is a necessity for an individual that is under a debt management plan, which are as follows:
Are there any dependents who would suffer without a car? In many circumstances, the car is more than just a vehicle for the person that drives - it’s often the way that children get to school, the way that parents get to and from the shops, or the way that vulnerable family members are able to get to the places they need to go to safely and comfortably.
Are there adequate transport routes in your area? This factor will be looked at very closely, with only extreme cases being granted access to car finance due to a lack of transport routes.
If you have any kind of transport to the local towns or cities within a reasonable distance of your home, it’s likely that you will not be granted access to car finance - this factor is only really applicable to extremely rural and remote areas where you need to travel great distances for work, shopping, school, or medical appointments and transport is not a feasible option.
Do you have any health issues? Individuals with health issues that make travel difficult may be allowed to apply for car finance to aid them with transport in certain situations.
It’s likely that this will only be possible if your health issue has a direct impact on mobility, or if public transport is considered too high of a risk due to your health problems.
How Long Is Your Commute To and From Work? Your commute to work is absolutely essential when under a debt management plan - it is your main source of income, which is used to pay off your debts, so it’s vital that you ensure you are able to get to work.
Whilst many people may live close enough to commute to work using public transport, this isn’t always the case, so if you aren’t able to make it to work without a car, you may be allowed to make an application for car finance.
If you think that you meet the above criteria, you’ll need to discuss the possibility of applying for car finance - this request could still be rejected, however, given the extreme circumstances stated above you do stand a chance of being allowed to look for car finance deals that provide you with a reliable vehicle to aid your day to day needs.
Getting a vehicle after bankruptcy
Another circumstance in which you may need to look for specialist bad credit car finance is bankruptcy, particularly as you’re coming out of bankruptcy and looking to start to get things back on track. One of the first things that you’ll want to arrange is a vehicle - it’s not just a useful possession, it’s something that enables you to do so much more, including start finding new job opportunities that aren’t accessible with public transport. As you can imagine, having a bankruptcy associated with your credit file will have a huge impact on your ability to apply for new credit arrangements, but it does not mean you won’t be able to. Instead, you may be best focusing your attention to finance providers such as ourselves here at ChooseMyCar, where we specialise in car finance packages that are tailored to help out those in particularly difficult financial situations such as those coming out of bankruptcy.
When you are coming out of bankruptcy, your credit score is likely to be close to an all-time low, which can mean you have to be incredibly careful not to damage it further. This becomes even more difficult when you consider that you must carry out a credit check, which can have a negative impact on your credit score when applying for finance for things such as car payments or housing agreements. At ChooseMyCar, we follow a two-step credit check that allows you to see whether you may be eligible for our finance packages before you are submitted to a hard credit search - this means that you’re minimising the risk of a rejected application, which can be a red flag on your credit file. To get started with an application, simply follow the steps right here on our website - you could be holding the keys to your shiny new car in no time at all!
No deposit packages
When you’re looking to make your car finance plan as affordable as possible, there are a lot of different options to consider - you could look for a cheaper vehicle, you could choose to spread to cost over a longer period of time, or you could look for a no deposit car finance package! By removing the need to pay for a deposit, you won’t have to worry about bringing together a large lump sum at the start of your payment plan, you simply pay your monthly payment and that’s all you need to think about! For many, the need for a car is immediate, so it’s great to be able to get hold of a suitable, reliable vehicle quickly should you need one. This speedy service isn’t always possible when you need to build up the money for a deposit, so many choose packages such as our £0 deposit car finance schemes to get back on the road as soon as possible.
One thing to be aware of when buying a car on a zero deposit finance plan is that the cost of the monthly payments will be higher - this is to account for the absence of the deposit which would usually be paid when entering such an arrangement.
Are hire purchase (HP) agreements a good option?
You might have poor or bad credit for a wide range of different reasons, we understand that here at ChooseMyCar. You might be self employed, a young driver with no credit history, someone with an IVA or County Court Judgement, or you might be someone who has experienced bankruptcy in the past. Whatever the reason, hire purchase car finance agreements are very popular for people with poor credit. With a hire purchase (HP) deal, the total cost of the car is divided into monthly repayments - and when the total amount repayable has been met, the car will officially belong to you.
This is great for drivers hoping to own a car asset at the end of their car finance. There is often a small lump sum deposit to be made at the beginning, and you don't actually own the car until the final payment has been made. By using this purchase method, you won’t have to worry about paying the large sum at the end of the contract as you would with a PCP package - instead you will simply own your car at the end of the payments, meaning you can choose to keep the car for yourself or sell the vehicle to fun a newer car for yourself!
This flexibility is a very popular way to buy a car, as it makes payments more affordable whilst also eliminating the large lump sum payments often faced at the end of your contract.
Below, we take a more in-depth look at hire purchase car finance deals and how they might be able to help you get back onto the road in style.
Hire Purchase: what is it and why would you use it to buy a car?
Let’s take things back to basics and take a look at what exactly HP is and why you would want to use it when you’re buying a new car. Essentially, hire purchase car finance is a pay monthly structure that enables you to split the cost of your car over a set term - this makes the car far more affordable for those who aren’t able to put down a large sum of cash to buy the car outright. You’ll be able to set your deposit amount and the length of the agreement to suit your finances, which will enable you to ensure that your finance plan repayments are a manageable amount for the entire duration of the contract. One of the main benefits of hire purchase when compared to other types of finance is that you’ll become the owner of the car at the end of the payment plan, rather than having to pay a large lump sum to purchase the car as you might when utilising a different type of car finance. The overall cost of the car is built into your monthly instalments, which saves you from having to deal with a balloon payment once the contract is up. Whilst this may initially mean that your monthly repayments for your hire purchase deal are slightly higher than with other deals, the absence of a balloon payment makes this one of the most cost-effective ways to own a car.
There are, of course, lots of things that you need to consider before you enter a hire purchase agreement, as these payment plans aren’t always the best option for everyone. The main things to consider are:
Do you want to keep this car?
If you aren’t too keen on the idea of keeping the car after your payment plan, you could benefit from looking into other options where you can hand the car back at the end of the contract.
Can you afford the repayments?
As we’ve already mentioned, hire purchase repayments are usually more expensive than that of a PCP or PCH deal, as the full cost of the car is being covered by these payments, as opposed to the balloon payment that you would have to pay with other payment plans.
Are you financially stable enough to maintain your repayments for the duration of the contract?
We understand that your circumstances can change in an instant, and this can mean that you may find yourself in a situation where you cannot afford to make a repayment on your HP plan. Before you enter an agreement, be sure to take a hard look at your finances to ensure that you are capable of sustaining a regular payment plan over a number of years.
Will you own the car at the end of the agreement?
This is where hire purchase car finance tends to differ from other pay monthly car finance options - yes, you will own the car at the end of the plan! Hire purchase agreements are exactly what it says on the tin - an agreement in which you hire the car whilst making repayments until you have purchased the vehicle. Over the course of your payment plan, you’ll pay off the full price of the car (plus APR), so you won’t be faced with a large balloon payment at the end of the agreement. In some cases, a small fee is paid, but this can be as low as £1 in some deals; for other deals, you’ll become the owner automatically after the last payment is made, so it’s worth checking this with your finance provider and dealership so you’ve got a clear idea of how the transfer of ownership works with your specific package.
This is, of course, one of the biggest benefits that hire purchase offers - it gives you an affordable, cost-effective way to own your car, rather than paying a considerable monthly fee to then still have to pay a large lump sum at the end to finally own the car. Once the car is yours, it’s entirely up to you how you use it; you could choose to keep the car as your own, sell the car and buy a new one, or use it to put down a deposit on a new car, which would allow you to lower the monthly payments on your new finance plan.
Why is a hire purchase deal good for if you have bad credit?
If you’ve got bad credit, you need to make sure that any financial decision you are making is the right one - you won’t be able to afford any more slip-ups if you want to avoid serious implications such as a CCJ, debt management plan, or even bankruptcy in extreme cases. HP car finance can, when used in the right way, be a great idea for those who suffer with bad credit, helping them to find a car that’s safe and reliable whilst also remaining affordable thanks to the monthly payment method. If you’re able to keep up your payments without missing any or not being able to pay in full, you’ll likely see your credit score improve as a result of your responsible lending behaviour exhibited throughout the hire purchase deal.
One of the biggest hurdles for those with bad credit is gaining approval for a finance package, as this means you would need to open a new credit application, which is something you’ll likely be advised not to do if you struggle with bad credit. However, it’s not always the case - using credit in the right way is the best way to improve your credit score and prove to lenders that you are a reliable and trustworthy recipient of credit.
Here at ChooseMyCar, we’re specialists in bad credit car finance, so there’s nobody better at helping you find the right car at the right price that we are. Get in touch with our friendly team today to find out how we can help you to find an affordable finance deal for a reliable vehicle!
HP vs PCP: what are the differences between the two most popular car finance options
There are, however, alternatives to HP car finance - whilst it may be one of the most popular options, it isn’t the only popular option, so it’s always worth considering your other options to make sure that you have made the correct choice for a person in your specific situation. One of the major alternatives is PCP, which works in a very similar way to HP, but with a few key differences to consider.
As we’ve previously touched on, the major difference between hire purchase and every other type of finance is the automatic ownership at the end of the agreement (as opposed to the option to buy that you’re usually offered with other deals such as PCP). Whilst this does mean you have to put down a large final payment to buy the car using a PCP deal, you’ll notice that your monthly repayments are cheaper than they would be with a hire purchase agreement. In the end, the decision between the different types of car financing will come down to whether you want to own the car at the end of the deal - if you enjoy the vehicle and would like to keep hold of it for a little while longer, HP will be the ideal choice, but if you aren’t too bothered and would like to hand the car back for a replacement or upgrade, you may find that you lean towards PCP or even PCH (we’ll explain what these are later!).
What happens when you miss one of your monthly repayments?
We’ll preface this with a crucial piece of information: you must avoid missing credit agreement repayments at all costs if you want to avoid serious long term damage being done to your credit score and file.
If you can, please ensure that a payment is being made each month and in the full amount - if you think you aren’t going to be able to do this, you need to contact your finance providers immediately to alert them to this and try to come to an agreement regarding payments.
With a hire purchase agreement, you don’t own the car until all of the payments are made, which puts the lender and dealership in a very comfortable position. As you do not yet own the car missed payments could be rectified by the car being repossessed by the dealership, which you will not be able to contest due to your breach of contract.
In general, the missed payments process will follow the following steps:
- The payment is missed.
At this point, you’ll be contacted by your creditor (if you haven’t already contacted them in advance), and they will make an agreement to either extend your payment period or allow you to pay the extra arrears over time.
- If these arrears are still not paid back, the creditor will issue a default
This will happen around 3 months after the missed payment - after issuing this notice, they will be able to take action to repossess the goods.
- Your car will be repossessed.
If, after this default notice, you still fail to take any action in regards to repaying your arrears, your vehicle will be repossessed.
Will my Hire Purchase agreement impact my credit score?
Yes, a hire purchase agreement will impact your credit score, this is an unavoidable fact, but the way in which your credit score is impacted by your hire purchase agreement will entirely depend on your behaviour in regards to your repayments and responsibility. If you show that you are a trustworthy recipient of credit by making your payments on time and in the full amount, this will help you to start improving your credit score over the course of the agreement.
Of course, there is also an alternative to this, which doesn’t paint a pretty picture at all. If you have existing credit issues associated with your credit file, you’ll likely be well aware of the dangers posed by additional missed payments and defaults.
If you’re already in a precarious position in relation to your credit, a poor showing when it comes to making your hire purchase repayments could be devastating. We suggest that you only apply for a HP car finance package if you are confident that you will be able to manage the repayments responsibly, otherwise you could fall into vast amounts of debt and a worrying state of financial insecurity.
If you want to learn more about our hire purchase car finance deals here at ChooseMyCar, get in touch with our team or head over to our online knowledgebase today!
Considering a personal contract purchase (PCP) agreement?
For drivers with bad credit records, another popular option is the personal contract purchase (PCP) car finance deal. Similar to the hire purchase arrangement, in a personal contract purchase agreement, you pay monthly instalments, often make a small deposit at the beginning, and have the option to own the car at the end of the finance deal.
The biggest difference between a hire purchase deal and a personal contract purchase agreement is that, with the PCP deal, you will need to pay a balloon payment at the end in order to own the car. This is a large optional final payment to transfer ownership of the car to you, or you can choose to give the car back or part-exchange it. The fact that this large optional final payment is part of the PCP deal means that your monthly repayments are often lower than those made in a hire purchase deal.
By choosing to pay for your car using a PCP deal, you’ll be reducing the cost of the monthly payments whilst leaving the decision at the end of the contract entirety up to yourself at the time - you won’t be tied in to own the car at the end of the payment plan should you decide you don't want to.
This is great for people who are interested in keeping newer cars, which is a popular choice for many modern drives thanks to the lowered risk of maintenance due to lower mileage and use. On the other hand, should you wish to own your car at the end of your contract, you can do that too! You’ll just have to pay the pre-arranged final fee and the car will be yours to keep. Very few car finance options provide a solution as flexible and affordable as a PCP deal will, making it ideal for new drivers and drivers with bad credit.
What is Personal Contract Purchase car finance?
Before you dive headfirst into a deal, you’ll want to know what exactly it is that you’re signing up for - this means doing your research and evaluating the package against the other options that are available to see which is best suited to you. In general, PCP deals are best suited to those who are looking for flexibility and the ability to make a decision regarding the vehicle at a later date, but there’s more on that later. With a PCP car finance deal, you’ll usually pay a deposit and then spread payments over a set number of months, after which you’ll be offered the option to pay a balloon payment should you wish to keep the car after your contract expires. There are many benefits associated with PCP car finance, leading to them being one of the most popular purchase options on the market, but it’s worth noting that there are downsides to be aware of before you enter an agreement. If you’re interested in purchasing your car using a personal contract purchase finance package, be sure to check out the information below to help you decide whether they’re the right kind of car finance for you.
What are the benefits associated with this type of car finance?
There are a couple of main benefits that you need to consider when it comes to PCP car finance - many people find these benefits to be convincing enough to make them commit to purchasing the car using this method, but for others, they may not seem as appealing. It’s all down to reading your own circumstances and deciding what will work best in line with your finances, particularly if you have bad credit.
The first benefit we’re going to take a look at is the option to buy the car at the end of the contract. With other finance options, you find that you’re obliged to either purchase the car or hand it back, but with a PCP deal, the choice is completely yours! You’ll be able to get to know the car and decide whether you’d like to keep it beyond the bounds of the initial contract by paying a balloon payment, which will be a predetermined amount based upon the projected value of the car when you sign the agreement. This amount cannot be altered during the contract, so what you see is what you get - you’ll have a set amount in mind, giving you the ability to decide whether you think the car is really worth the purchase amount when the time comes.
The next benefit is the lower monthly payments that you’ll be paying. The monthly PCP instalments are usually much lower than the equivalent payment in a deal such as Hire Purchase, which helps to make the deal more affordable in the long run. This lower price is caused by the balloon payment at the end - as you will be paying a large lump sum at the end if you wish to purchase the car, the overall amount of the car is not built into these payments, making them much cheaper than if the full cost of the car was spread over your monthly payments. If you’re looking to make your car finance payments as manageable as possible during a period of bad credit, PCP car finance is one of the leading options.
Are there any downsides that you need to be aware of?
Of course, there are also downsides that you’ll need to consider before you commit. These downsides may not apply to everyone, so again it’s important to consider the factors that will affect you during the contract and afterwards too. Here are a couple of the things to consider when it comes to PCP car finance:
- You won’t own the car until you pay the balloon payment. Whilst this does offer flexibility, others may see this as a negative aspect of PCP car finance, as the car is not yours until after every payment, including the balloon payment, has been made. This means that you won’t be able to sell or upgrade your car during the contract, you must instead stick with your chosen vehicle.
- Balloon payments can be expensive. Depending on the amount you’re paying monthly and the deposit that you have put down initially, you may find that your balloon payment is quite a considerable amount. This fee is not mandatory and you will be able to simply return the car if that’s your preferred choice or if you find the amount to be unaffordable. This can mean that it feels more expensive to purchase the car at the end of the deal, with a large lump sum being paid.
Why this finance option is a good fit for people who have a poor credit rating
One of the main struggles associated with car finance is the impact that your credit score might have on your ability to gain approval for affordable deals, or just acceptance for any deals depending on the severity of the bad credit. If you are someone who struggles with a poor credit score, there are options that are tailored to your circumstances that will enable you to remain protected as you make applications for a car finance deal. Here at ChooseMyCar, our PCP car finance deals offer a number of benefits to drivers who have bad credit, helping you to get on the road in a way that’s affordable, with an achievable payment plan in place.
ChooseMyCar’s credit check is designed to shelter those with bad credit from harmful application rejections wherever possible - we do this by conducting an initial soft search on your credit profile, which gives us a basic overview of your credit history and enables us to offer a pre-approval to our application, or offer a rejection without having to submit you to a hard search. By conducting our searches in this way, only applicants with a high chance of approval will be subject to a hard search; this is the kind of search that leaves a mark on your credit file and is visible to future lenders.
How does a PCP deal work with ChooseMyCar?
Our PCP deals are designed to take the stress out of the car finance application process, especially if you’re apprehensive about applying due to bad credit. At ChooseMyCar, we think everyone should have a fair chance of being able to gain access to affordable car finance for a safe, reliable vehicle - that’s why we’ve implemented our two-step credit search that’s designed to protect those who are most vulnerable to credit rejections. By choosing to buy with a specialist like ourselves, you can rest assured that everything is taken care of and that support will always be available whenever you need it. No matter whether you need a hand with your application, want to learn a bit more about our different finance options, or just want more information regarding our vehicles, feel free to get in touch with us online or by phone.
When you apply with us here at ChooseMyCar, you’ll be subject to the following process - this enables us to ensure that both the applicant and lender and protected during the application:
Will you own the car at the end of the agreement?
Simply put, this is completely up to you! If you want to own the car at the end of the agreement, you’ll be able to do just that, but if you’d rather try something new or look for an upgrade, that’s fine too! One of the biggest advantages of PCP is this flexibility and ability to do what you feel is the best option for you at the end of the contract. Your two options will be as follows:
Guarantor loans: everything you need to know
If you’re struggling with bad credit and looking to gain approval to an affordable car finance deal, it’s likely that the idea of a guarantor loan has crossed your mind. For many, this appears to be one of the most difficult ways to gain access, but is that really the case? Below, we’ll take a look at some of the pros and cons of guarantor loans to show who this type of car finance may be a good option for, and who may be best served choosing a different option. We’ll also look into the intricacies of guarantor loans, looking at how they work, who will be able to be your guarantor, and how a missed payment could impact both you and your guarantor.
What are guarantor loans and how do they work when it comes to car finance?
Before you commit to any type of car finance, you need to know exactly what it is that you’re signing up for - each different type of car finance will have a different process, as well as its own set of benefits and drawbacks, so you’ll want to ensure that you’ve reviewed the different options very carefully before you sign any contracts.
A guarantor loan is essentially a loan that is secured using another person as a safety net - they act as security on your loan, meaning they’ll be responsible for your payments should there ever be a missed repayment. This can put the guarantor in a precarious position, which is why it is vital that they have a strong degree of trust in the applicant.
To take out a guarantor loan, you’ll need to provide the details of both the applicant and the guarantor - the guarantor will be subject to a credit check and, upon approval, will be granted credit which will be used by the applicant to purchase the car of their choosing. The applicant will then be responsible for making the monthly repayments against the loan, with the guarantor responsible for ensuring that payment is made should the initial applicant fail to do so.
Will you be able to get car finance with a guarantor loan?
Yes! Guarantor loans are a perfectly acceptable way to gain access to car finance for a new car and are a particularly useful tool for those who have bad credit scores or no credit history at all. Guarantor loans are commonly used by young drivers, who may not have had the chance to start building up their credit score, so will likely be rejected if they were to apply for the substantial amount of credit needed to purchase a car. By using a guarantor, young drivers will be able to gain access to the credit needed to buy a safe, reliable car that allows them to get onto the road in their own car for the very first time.
The other situation where guarantor loans are frequently utilised are in cases of bad credit, where the applicant would likely be rejected if they were to apply on their own. Using a guarantor means that the applicant will not be subject to the credit check - this protects them from harmful rejections which can have a damaging effect on their credit score. In general, a guarantor loan can be a very useful payment method when it comes to car finance, but only if the applicant is a reliable lender who is able to ensure that regular repayments are made.
Who can (and can’t) be your guarantor for a car finance loan?
What many people fail to realise is that there are, in fact, regulations surrounding the topic of guarantors, particularly when it comes to who can be your guarantor - we’ll give you an overview of the people that are and aren’t eligible to be your guarantor below, so be sure to keep the following information in mind when you’re making a guarantor loan application!
These people CAN be your guarantor:
- Your parents
- A friend
- Aunts or uncles
- Anyone else you have a strong relationship with
The main rule is that you cannot have someone who is financially attached to you acting as your guarantor, as they must be able to make any payments that you miss independently from your own financial state. If you want to choose the right guarantor, you need to ensure that you’re picking someone who meets certain criteria - some people make better guarantors that others, so if possible you’ll want to find somebody who meets all of the following criteria:
- Your guarantor must be a UK resident
- Guarantors to be aged between 21 and 75 at the start of the loan period
- Your guarantor must have a good credit history and rating - slight imperfections are acceptable but any major red flags will likely lead to a rejection
- Your chosen guarantor needs to have their own UK bank account and a debit card registered in the UK
- Your guarantor must be earning at least £400 per month as a minimum
- Most importantly, the guarantor must be completely financially independent from the applicant
Things for guarantors to be aware of
In the case of guarantor loans, there are lots of things that everyone needs to be made abundantly aware of before entering the agreement. One of the major considerations that you need to make before entering an agreement as a guarantor is that missed payments can have a huge impact on the credit score of both the applicant and the guarantor. Before you enter the agreement, you must be completely sure that the applicant is a reliable borrower - if they miss payments, you will be left to make the repayments, which will leave you a considerable amount of money down during the month, with the negative implications on your credit score also taking effect.
In line with the above, it’s also important that you consider what you’d be willing to lose if the loan deal falls into a worrying state - should this happen, you could face losing your own car or belongings as part of the debt collection process.
Of course, this won’t always be the case; your applicant could be a responsible borrower who pays their monthly instalments on time and in full each month, which will reflect well on everyone involved. In the end, it really will depend on how well the applicant manages their repayment plan over the course of the contract.
How will missed payments impact you and your guarantor?
As we’ve mentioned, there can be massive implications for any missed payments in any credit agreement, but in the case of a guarantor loan, there is even more risk associated with a missed payment as multiple people can be impacted by failed payment. This is because both the applicant and guarantor are financially tied to the agreement, which can lead to both feeling the impacts of payments, both those that are made and those that are missed.
Because of this, you should only ever enter an agreement as a guarantor if you trust the applicant when it comes to their finances - if you are unsure of how they might respond when it comes to making repayments, or if you aren’t to familiar with the person, it may be best to steer clear of becoming a guarantor for a car finance loan on their behalf.
If a payment is missed by the applicant, the debt will then be the responsibility of the guarantor to pay. This is part of the agreement that they have signed, and they must make the payment promptly and in full. Any further failure to pay can lead to defaults and additional arrears that will also be collected. If at all possible, it’s best to avoid these circumstances at all costs by ensuring that payments are always made in the full amount each month.
Who would benefit from this type of car finance
Guarantor loans are, in general, seen as a way for people with bad credit to gain access to credit and loans without having to be subjected to a credit search on their account, which can be massively detrimental to their credit score if conducted too frequently. If you have bad credit, every little action counts, so if you’re able to avoid a credit check, or avoid an rejected application altogether, that’s a huge bonus for you - guarantor loans offer exactly this.
On the other hand, we have applicants who have no credit history at all - this is particularly common with young drivers who have not yet had the chance to take out a credit agreement that would allow them to build their credit score. Whilst you may think that having no credit history automatically means that you have good credit, this is rarely the case - in order to have a good credit, you need to have a longstanding history of responsible credit utilisation and a pristine repayment record, which is something you won’t have if you’ve never taken out a credit agreement in the past.
In most cases, it’s usually a good idea to start building your credit score before you take out a car finance deal, but in cases like young drivers, that’s not always possible, so guarantor loans become the ideal solution to that issue.
What information will my guarantor have to provide during the credit application process?
As you’d expect, both you and your guarantor will need to give information to your car finance provider and credit broker - this is for a variety of reasons such as credit checks, identity verification, and gauging financial stability, all of which are factors that will need to be considered before you are offered credit for a car. If you’re unsure about what information is usually required in these kinds of arrangements, don’t worry - we’ve detailed everything you need to know below!
To be a guarantor, you will need to be able to provide all of the following information to the creditor:
- Your guarantor will, in most circumstances, need to be a homeowner - this means that proof of homeownership will usually be required from the prospective guarantor
- Your 3 most recent bank statements will need to be provided - this allows the lender to see your regular incomings and outgoings to ensure that you’ll be able to make payments should the applicant fail to do so, this can also act as proof of mortgage payment
- Proof of identity in required from both parties
- An address history for both parties is also required as part of the identity verification process
- Proof of income will need to be provided - this can be a payslip, bank statements, or any other form of documentation that outlines your income on a regular basis
Why is this a great option for people who struggle with bad credit?
When you’re struggling with bad credit due to previous financial trouble, a CCJ, or a debt management plan, it can sometimes feel impossible to gain access to some of the things that you really need. One such thing is often a car - they’re incredibly expensive to buy in one up-front lump sum, and you’ll often be rejected for any car finance deal as you’ll be subject to a credit check, where you’re unlikely to pass due to your poor credit score. This is where guarantor loans become a lifeline - you’ll be able to, with the help of a trusted friend or relative, apply for a loan for car finance, without the application leaning on your own credit score! Instead, the guarantor acts as a security measure for the lender, as they’ll agree to pay off your repayments should you ever miss one or fail to make the payment in full. By offering this type of guarantee that payment will be made even if the application fails to make the repayment, which significantly reduces the risk for the lender and increases your chances of gaining approval!
If you’d like to learn more about our guarantor loans or start your application today, simply get in touch with a member of our team!
Personal loans for car finance
One method of car finance that’s often overlooked is personal loans - whilst this isn’t strictly a form of car finance in itself, it can act as a very effective substitute that gives you far more freedom with the car than any other form of rigid car finance might. Of course, there are pros and cons to consider, as there is in any kind of credit arrangement that you may enter into, so it’s important that you’ve taken the time to consider how this might impact you over the course of the contract. By taking the time to consider how you’ll be affected by the credit agreement over time, you’ll have a better idea of how well suited this type of car finance for a person in your circumstances. This section is designed to give you all the information you might need before entering into a personal loan agreement to pay for a new car, including how to apply, what happens if you fail to make your payments, and how cost effective this option is. Once you’ve finished reading, you should have a clear understanding of personal loans, their benefits, their drawbacks, and whether they’re a suitable option to use when purchasing your new car.
How do personal loans work
Unlike with other types of car finance, personal loans are not taken out against the car - they’re simpler to understand and are simply loans taken out which you then use to buy the car outright. You’ll then pay off the monthly loan repayment amount over the serm set out in your loan agreement, rather than paying off the cost of the car over this time. In many cases, this is often a cheaper option when it comes to paying for a car using monthly instalments, so the only extra payment you’ll have on top of the car value is the interest that the loan accrues, rather than the other fees that can be charged in car finance plans. When applying for a personal loan for car finance, you’ll apply as you would for any other loan; you’ll find a lender that you deem suitable, preferable with a low interest rate, as this will limit the amount over the car’s value that you’ll be paying. Once you’ve found a suitable lender, you must then follow the application process, which will include a credit check to ensure that you’re eligible for a loan of this amount, after which you’ll be granted the money to use to buy the car outright. By doing this, you immediately become the owner of the vehicle, which is often not the case with car finance plans such as hire purchase and PCP.
What makes them different to different types of car finance
As we’ve touched upon in the above, personal loans are very different to other types of car finance in the way that the loan technically has nothing to do with the car; you’ll simply be using the money that you’re granted by the lender to buy the car, rather than the credit amount being held against the car and reduced as you make your monthly repayments. For many, personal loans are a more simplified way of using credit to buy a car - there’s less confusion around the agreement and are very straightforward. You’ll take out the loan, you’ll buy a car with the borrowed money, then you’ll pay back the loan; it’s as simple as it can get!
With other forms of car finance, you’ll usually be paying off the amount of the car month by month, meaning you won’t actually become the owner of the vehicle until your very last payment, where you will have paid off the cost of the car as well as the fees on top. Using a personal loan, you’re the owner of the vehicle from the get-go, giving you more flexibility and freedom in what you’re able to do with the car, but there’s more on that later.
What are the benefits presented by this type of car finance
There are many benefits associated with personal loan car financing, with many seeing this as one of the most flexible and cost effective options on the market, however there are certain drawbacks that may prohibit you from gaining access to it, so please be cautious when applying for personal loans.
- Cost: With a personal loan, you may find that the overall cost is lower than it might be when utilising a rigid car finance deal to purchase your car. There are a number of reasons this could happen. The first reason is that you’ll typically be paying a lower loan rate than you would as part of a car finance package, unless the dealer offers a 0% finance option, which do exist but are rare to find. The other reason for a lower overall cost with a personal loan is that you’ll have the option to haggle over price - as you’re offering to pay the full amount of the car’s value up front, you are more likely to be offered a slightly lower price that you would be charged when paying over a number of months. Whilst it may seem insignificant, haggling in the right way could save a considerable amount of money off the top of the price you pay!
- Flexibility: With your personal loan, you’ll have more freedom to tailor the payment period to suit your needs and preferences - with terms available from 1 to 7 years in length, you’ll have a wide range of options to consider when finalising your agreement. Unlike with other finance plans, you may also have the option to pay more than your monthly amount, or pay off the full amount earlier than planned, which can save you on interest if you find the money to be able to do so. It’s worth discussing this option with your lender, as this option is not always available.
- Ownership: When you’re utilising a car finance deal, you may find yourself
restricted in what you’re able to change about the car, as you do not technically own the
vehicle at that point and cannot change anything as you aren’t allowed to do so. In a
personal loan agreement, you’ll have technically bought the car outright, which means you
can make any adjustments and modifications that you wish!
- Restrictions: One of the most frustrating things you’ll face when you’re engaged in a car finance deal is restrictions that are in place to limit your usage and maintain a good level of condition for the car upon its return to the dealership - this is to protect any resale value should you choose not to exercise your option to buy. As the owner of the car with a personal loan, you’re able to use the car as frequently as you’d like with no mileage restrictions or maintenance restrictions in place.
Who would be able to take advantage of personal loan car finance
Your ability to take out a personal loan will, as in the case of any credit agreement, depend on your credit score and history - you’ll need to have previous evidence of responsible lending to be eligible for a personal loan, and will usually need a higher credit score than you would for other car finance options.
It’s easy to understand why this is the case; with a car finance plan, the car can simply be removed from your possession should you fail to keep up with your monthly repayments, but with a personal loan you aren’t being given an item, you’re being given cash, which cannot be reclaimed once spent.
This means that the lender has to find security elsewhere and that’s why the threshold for the necessary credit score is higher, as people with higher credit scores tend to pose less of a risk to offer credit to than those with a poor score.
If you want to learn more about how your credit score is calculated and how this impacts your ability to apply for credit and car finance loans, you’re in luck! Check out our comprehensive guide to credit scores, where you’ll be able to learn more about what factors are measured, how you can improve your score, and how you can use car finance to start building a better rating!
Things you need to consider before you apply for a personal loan
Applying for a personal loan does come with a lot of apprehensions - it’s not quite the same as applying for a car finance deal, and will be viewed differently on your credit report too. When you are applying for a loan in this way, you’re actually loaning money rather than financing a car - of course, this does present a higher risk to lenders and any irresponsible behaviour relating to the borrowed money will have a hugely negative impact on your credit score.
The biggest danger with personal loans is temptation - whilst you may initially be taking out the loan amount to buy a car, there’s no guarantee that this is what you’ll spend the money on. If you have trouble handling money, it may be best looking into different finance options, as it’s probably too much of a risk to apply for a cash amount worth thousands of pounds rather than entering into an agreement solely focused on purchasing a car.
However, it’s also important that you consider the benefits that personal loans offer when compared to plans such as PCP, PCH, HP, or Guarantor loans - when it comes to car finance, it’s all about finding the method that works best for you, and everyone has their own preferences.
Can you pay your agreement off early if you are able to?
One of the big benefits that this kind of car finance offers is that you are in control of when your deal gets paid off - if you feel financially stable enough to pay off the contract early, most lenders will allow you to do so, however there may be a fee for doing so to account for interest that would have accrued over the course of the loan agreement.
By paying off the agreement early, there are a number of benefits to feel; you’ll no longer have the debt attached to yourself, which can be a huge weight of your shoulders, but you’ll also start to improve your standing with the CRAs as you’ll be showing yourself to be a responsible and trustworthy borrower.
Of course, you’ll only be able to pay the deal off early if you’ve managed to come to an agreement with the lender - some lender will be happy to do so, whereas others are less flexible in terms of early termination, so it’s best to read up on the specific terms in your contract to find out more.
Who is the owner of the vehicle whilst the agreement is in effect?
Unlike with most other finance agreements, you’ll be the owner from the start of your deal should you choose to purchase using a personal loan! This is one of the reasons that this is such a popular method of purchasing a vehicle, as it removes the tight restraints and restrictions that are often put in place with finance deals such as PCH, PCP, or Hire Purchase. What’s more is that you won’t have to put down a deposit either, as soon as you pay off the initial amount, you’re good to go - the only thing you need to focus on after that is sticking to your monthly payment plan, it really is that easy!
If you want to get in touch with our team to chat about personal loans, or any other of our car finance options, feel free to get in touch today! Alternatively, you can start your car finance application right here on our website, helping to speed up the process and get the keys to that shiny new car in your hands as soon as possible, with free delivery available on all of our cars in the mainland UK!
How can you use Personal Contract Hire deals to get a new car?
When you’re looking for car finance deals, it can sometimes feel like there’s so many different options to choose from that you start to feel a little bit overwhelmed and oblivious to the difference between the different types of car finance. This is why it’s vital that you seek out the right information from the right sources - it’ll help you to make informed decisions that serve you better than heading in blindly will, so you can be confident in the choice that you’ve made.
If you’ve already started the search for car finance, there are a few phrases that you’ll have already become familiar with, one of which is sure to be PCH, or Personal Contract Hire. This is a pay-monthly form of car finance that’s offered to customers as a cheap, manageable way to be able to drive a safe and reliable vehicle. Personal contract hire is exactly what you would imagine - you will hire the car on a time-limited basis, giving you use of the car for the duration of the contract and no longer. This is a relatively no-strings-attached option, which allows you to simply hand the car back at the end of the agreement so that you can choose a newer car or upgraded vehicle that suits your current needs, rather than your needs from years back when you took out the initial contract.
Read on below to learn more about how our PCH car finance deals could benefit you!
What exactly is a Personal Contract Hire car finance plan?
So, first of all let's explain what a PCH car finance plan actually is; simply put, PCH is a form of car finance that’s used to hire or lease a car for a set period of time, after which time the car is returned to the dealership. These plans are very popular with people who prefer to change their car for something newer every couple of years rather than sticking with the same car for an extended period of time.
What this offers is an injection of freshness and flexibility when it comes to your car - your car will never get too old or require any significant maintenance if it’s cared for properly, which could actually end up saving on costs in the long run in comparison to owning the car outright. P
rhttps://choosemycar.com/apply-now, as you have no real obligations beyond making your monthly repayments to the dealership - you won’t have to worry about selling the car after the contract is up, nor will you have to think about bringing a considerable amount of cash together to cover the balloon payment that you’d be faced with at the end of a PCP deal.
Why would you choose one of these deals?
The benefits of a PCH deal are actually very clear - the packages are simple, easy to control, and enable you to keep things moving and fresh every few years. As with the other types of finance that we’ve discussed, there are also drawbacks too, but if you aren’t too interested in becoming the owner of the car at the end of the package, PCH is likely to be the smartest choice for your. Here are a few of the benefits that you’ll experience when utilising a PCH car finance plan:
- No deposit schemes:
Many lenders offer £0 deposit schemes for their PCH packages, but may charge a rental fee to offer more security on their end of the deal. This can make it easier to access a new car, even if you don’t have enough money to pay for a deposit.
- Lower payments:
One of the main benefits of PCH car finance is that the monthly payments tend to be lower than with any other car finance deal - this is usually due to the restrictions that are put in place to maintain the condition of the car whilst it’s in your possession, but if you’re looking for a great car at a low price, it’s hard to beat personal contract hire plans.
- Balloon payments:
If you’re opposed to the idea of a balloon payment at the end of your contract, PCH plans help you to avoid this entirely. Many people feel an obligation to purchase the car at the end of their PCP agreements, leaving them paying a considerable amount for a car that they didn’t really want to keep, which is a difficult position to find yourself in. With PCH, you simply hand the car back at the end of your agreement with no thought given to a balloon payment, which is a huge weight off of your shoulders a few years down the road.
- Maintenance packages:
During a PCH plan, the dealership will want you to ensure that the car is kept in the best condition possible - it’s still theirs to sell after your deal expires, so they’ll need the car to be in good condition if they want to attract a profitable price for it! This can be a huge benefit for you as a PCH driver, as it can often mean that a maintenance package is included in what you pay, giving you access to frequent free maintenance that keeps your car in top shape for the entire duration of the contract.
- Fresh wheels:
If you’re looking for the most stylish and on-trend car to be yours every couple of years, there’s no better option than personal contract hire car finance - you’ll have a constant refresh every couple of years, depending on how long your contract lasts, meaning you can choose a new car to drive at the end of each term! If you’re a car fanatic who’s looking to give a range of different vehicles a try, this is the option for you. Alternatively, if your circumstances change during the course of your contract, such as needing a larger car after the birth of a child, you’ll easily be able to upgrade to a more suitable model at the end of your contract.
Are they any negatives to consider when it comes to PCH car finance?
There are, however, some negatives that must be taken into account before you enter into a PCH contract with a dealership - we’ve already briefly covered some of these, but we’ll look at them in more detail below so that you’ve got a clear idea of both the positive and negatives of this type of car finance.
- The car isn’t yours: This might seem incredibly obvious, but it’s still a big negative factor that you’ll have to deal with. From the moment you pick up the keys to the day you drop the car back at the dealership, the car will never be your own, meaning it can sometimes feel like you’ve spent a lot of time and money over a number of years on a vehicle that isn’t even yours. Of course, you’ll have got a lot of use out of it so the money hasn’t been wasted, but ideally the car would have been yours rather than just hired.
- There are limitations: Perhaps the biggest drawback is the limitations in usage that you’ll be asked to adhere to, as these can be stifling for drivers who expect to use more than the quoted mileage over the course of the contract. This mileage limit is put in place to ensure that the car remains in good conditions, as the dealership will need to try to lease or sell the car once they receive it back after your agreement ends, meaning the car needs to be in good shape with an acceptable mileage on the clock for the prospective buyer.
- You can’t make any changes: We all want our car to look and feel exactly as we desire it to, but that often means making changes to the way the car is configured, such as respraying the colour, altering the suspension, or tinting the windows. Whilst this is perfectly acceptable when the car is yours, you won’t be able to do this if you’re hiring the car as part of a PCH deal. The car must be returned in the same condition, give or take general wear and tear over a few years’ use, when it gets back to the dealership. If there are any changes made or excess damage beyond wear and tear, you’ll be charged a fee to rectify this.
Who would benefit most from a PCH finance deal
In general, PCH deals are best suited to people who are happy to keep renewing their finance deal every few years without actually owning any of the cars that they’re driving - this helps them to keep costs low so that the deal is as affordable as possible. With the price being much lower than with other finance options, PCH deals are a brilliant option for those who struggle with bad credit, it allows them to borrow the smallest amount of money possible whilst still retaining access to a safe, reliable vehicle that enables them to get on with their life more effectively.
If you are someone who struggles with bad credit, you’ve likely already felt the impact that this can have on your ability to gain access to affordable credit agreements - bad credit is a huge red flag to lenders when they’re reviewing your account and this can lead to them rejecting your application or asking you to pay higher interest rates on the money that’s borrowed to decrease the risk associated with the agreement. If at all possible, you’ll be best served looking to borrow smaller amounts of money if you have bad credit, which is where PCH deals become an incredibly useful tool - comparatively, these are commonly the cheapest deals available, so will require the lowest borrowed amount out of the many finance options available.
Will you own the car once your credit agreement is over?
Unfortunately, no you will not own the car at the end of the agreement. One of the major stipulations with PCH finance is that the deal is lease-only, meaning you will not own the car, nor will you have an option to purchase the car at the end of the agreement period - this can be disappointing for many, as the ideal of owning the car is an appealing one thanks to the added freedom you’d have to do more with the vehicle, however in terms of cost and updated vehicles on a regular basis, PCH wins hands down.
If you’d like to keep the monthly payment plan, but would like the option to buy the car at the end of your agreement, then a PCP deal could be the perfect choice for you! PCP deals work in a very similar way to PCH deals, essentially identically to each other other than the option to pay a balloon payment at the end of the agreement should you wish to own the car at that time.
I’ve missed a repayment on my PCH deal, what’s going to happen?
Missing a payment on your car finance deal, no matter which type of finance it is, is always to be avoided. Missing payments will lead to a negative effect on your credit score in the future and will likely have a long-lasting impact on your ability to gain approval for additional credit agreements. When applying for credit, you’ll be subject to a credit check, which searches your credit history to calculate your creditworthiness - the more issues, defaults, misses payments, or rejections are found on your report, the less likely you are to be granted access to credit.
If you suspect that you may be on the verge of missing a payment or failing to make a payment in full, you should contact your lender immediately to work out a payment plan that enables you to pay off the arrears in a way that won’t impact your credit score. The earlier you are with this, the better; do not let the payment date go by without contacting your lender as this will harm your credit score for years to come.
How exactly does your bad credit affect your application?
It's important to understand the relationship between your credit score and your ability to make further full credit applications. Knowing that bad credit might have a negative impact on your ability to apply for new finance agreements is one thing, but why exactly is this so important to lenders?
Well, people can have bad credit for a number of reasons, but the most common reason is often having missed payments due to financial difficulties in the past. If you have fallen behind on your repayments for other credit agreements, this will negatively impact your credit score - which will be seen by any other potential lenders when they run a credit check.
Any lender wants to be assured that you will keep up with your monthly payments and that everything will be made on time. This is part of any lending criteria and a lender will look for missed or late payments as part of your credit file - and this might affect your ability to secure a car finance agreement.
Other things that can affect your credit rating and your ability to get car finance include having an IVA (Independent Voluntary Arrangement) - in which case any responsible lender will ask for written confirmation from your Insolvency Practitioner that you have been approved to borrow again.
What is my credit score, what affects it and how can I improve it?
Your credit score, or credit record, is essentially a history of your past behaviour when it comes to credit agreements. A lot of things can affect your credit score, such as taking on a lot of new credit, the length of your credit history, your mix of credit arrangements and more. However, payment history is the most important part of determining your credit score and it has a very significant impact on your credit profile overall. Lenders are most interested in knowing whether you will be able to keep up with monthly payments and make your payments on time.
As such, a bad credit score is most often the result of failing to adhere to prior credit agreement such as missing payments or making late payments. For example, if you have failed to repay a mortgage, missed payments on a mobile phone deal, failed to repay a loan, credit or prior finance agreement, then you are very much at risk of damaging your credit score.
Having a bad credit score will in general make it more difficult to have future credit deals approved and to secure funds for purchases such as those for a home, car, or other vehicle. Your credit score affects how a lender views your eligibility when deciding things such as:
- Whether to lend you any money at all
- How much money to lend to you
- What interest rate should be set on the amount that is loaned to you
Think of your credit score, credit report and credit history as something like your very own financial footprint. It behaves like a record of your financial history with other creditors that allows potential future lenders to assess how safe it is to offer you finance or credit. If you have missed payments, made late payments, or been declared bankrupt, then your credit history will reflect this.
The good news is that you are able to make your own eligibility check by checking your credit score with a credit reference agency (CRA) - and this is often done entirely for free. It's important to understand that having bad credit won't necessarily stop you from undergoing your own car finance journey, but it may make the process more expensive and long winded.
What affects my credit record?
Your credit score is exactly how potential lenders will determine how eligible you are for certain loans such as credit cards, mortgages and more. When it comes to the car finance process, it's important to know that potential lenders will always run some form of credit check at first. There are a lot of different things that can affect your credit score, including:
- Your current financial situation regarding debts
- Your current credit availability, alongside how much of this you are using as active credit
- Your history of making credit payments and repayments
- Your credit searches
- Your presence on the electoral roll
If you have a good credit score, then this shows that you are more likely to keep up with your car finance repayments without missing monthly instalments. As such, ideal lenders are more likely to offer you a car finance deal with more manageable full monthly payments at a preferential rate.
Signs of bad credit
Without undergoing a formal credit check, it can be tough to know whether you have bad credit, but having a test carried out on your account can contribute to a poor score, so that has the potential to leave you in an incredibly sticky situation. If you’re wondering how you might be able to spot whether you have bad credit without undergoing a credit check, here are a few of the telltale signs to look out for:
Defaults on payments
One of the most obvious things to keep an eye out for is defaulting on your payments more than once - any default that is held against your account will have a negative impact on your score and will remain on your credit file for quite a while, which can often be a deterrent to potential lenders in the future. A default is awarded when payments on your current outstanding loans have not been made, resulting in falling behind with your debt and breaching your pre-agreed payment plan set out by the lender. If the default is cleared within a few days, there is a chance that your error will have been cleared before it could appear on your report, however, if it is left for a longer period of time then it will certainly leave a lasting impression.
Loan application rejections
When you’ve got poor credit, you’re likely to find it hard to get credit, so this can also be a clear indication that your credit profile might not be in the best shape. If you’ve found that your recent loan, credit, or finance applications have been coming back with rejected responses, it’s highly likely that you are suffering from bad credit caused by mismanaged finances and unpaid arrears, and late payments. If this sounds like the situation you find yourself in, it could be time to look into ways that you can improve your credit score.
Credit card applications
Much like with loan applications, you will need to pass a fairly comprehensive credit evaluation in order to be offered a credit card - a credit card is essentially loaned money which must be repaid on time, or you’ll face default, debt and poor credit. People with bad credit may often find it difficult to find credit card providers who are willing to offer them a card, with the options that are available often relying on high interest rates and sub-par bonuses to minimise the risk on their behalf.
On top of this initial credit check during your application process, most card issuers will routinely conduct further checks throughout the time that you have a card, continuously monitoring any improvements or decreases in your creditworthiness to ensure that you are still an eligible recipient of the credit being offered, or if your credit limit could be increased due to improved credit ratings. If you notice a change in your credit limit or eligibility for credit cards, it’s highly likely that your credit score has changed.
Debt collection agencies
If your loans and credit lending has got out of control, you may be contacted by a debt collection agency - these are companies that are in place to ensure that debts are paid in one way or another, whether this is through threats of repossessing your assets or with them actually actioning this and sending bailiffs to collect items in the amount of your unpaid debt. The first thing you should do in the event of being contacted by a debt collection agency is to verify that the debt being collected is in fact tied to your account - if the accounts in question are genuine, you’ll then need to ensure that you are getting your payments up to speed as soon as possible to avoid further action including repossession.
Job application failure
What many don’t know is that when you’re applying for a new job, you’re often submitted to some form of credit search, usually a soft search, which gives the employer the opportunity to take a closer look at their new potential employee. A person’s credit file is often a great indicator of how they manage their finances, which is particularly important for high ranking positions such as directors, executives, or finance staff. When you’re having trouble finding a new job, it’s worth considering whether your credit score could be impacting how appropriate you look for these roles to a potential employer.
If you’d like to have a credit check carried out on your account, you always have the option to do so - there are regulations in place to ensure that every person is able to view their credit score for free, however, some services may charge a fee. These paid services can often be far more informative, giving a deeper insight into your finance and credit history to highlight how well you rank and where you could improve.
So how do I improve my credit rating to make it easier to get a good finance agreement?
The first step in getting a good car finance bad credit deal is always to start taking steps to improve your credit score. Here at ChooseMyCar, our finance team specialises in providing manageable bad credit car finance agreements, but our financial advisors always recommend improving your credit score to help access better deals. Fortunately, there are a few things you can do to help this, including:
- Registering to vote - This is a simple one, making it an absolute must. Your prospective lender will always perform a credit check before making a lending decision. To do this, they'll need your name and address - something you can make much easier for them by registering on the electoral roll.
- Identify and address any issues with your credit history - Our finance advisors always recommend regularly reviewing your credit score, as well as getting hold of your full credit history. Doing this means you can make sure that there are no mistakes while also taking steps to begin making repayments on any current credit you have.
- Make your repayments on time - Making sure you don't miss any payments avoids accumulating current debt that reflects badly on your credit history. This demonstrates to your new lender that you are more likely to keep with payments on any used car finance deals they approve you for. Doing this will improve your credit score over time as well as helping you to secure a more beneficial and affordable car finance deal.
- Don't open too many new loans and close unused credit accounts - If you have a lot of new loans opened recently, your lender will be able to see this and might take it as an assumption of financial difficulty. Generally speaking, the more loan applications you make, the more likely it is that your credit score might decrease. On top of this, unused current credit accounts should be closed to clear this from your current history.
Knowing you have bad credit can be stressful and it can potentially close doors to you when it comes to finance and loans. But knowing where to start on your journey of improving your credit score is also difficult. Fortunately, here at ChooseMyCar we have some fantastic resources on our website. Among these is our guide to improving your credit score, which is a great place to start for anyone hoping to apply for car finance with bad credit.
How do I check my credit score for free online?
Thanks to the many tools that are available online, it’s actually incredibly easy to check your credit score - it’s actually more difficult trying to find a preferred credit checking service! When you’re searching for online credit checking tools, you’ll want to focus on the features that each platform offers, as this’ll help you to differentiate between the wide range of services that are available. With features such as credit card suggestions based on approval rates for people with similar scores to yourself, step by step guides on how to improve your credit score, and weekly reports available, these apps and online tools have never been more sophisticated than they are right now!
In addition to this, you’ll actually find that most of these services are free to use! On certain platforms, you may find a premium version that requires payment to use - these will usually be more feature-heavy and offer more benefits - but even in these cases it’s likely that this same platform will offer a free version that’s still very useful. By law, everybody is able to access their credit score for free as it is deemed a right, rather than a privilege, so you can simply request to be given your credit score if you want to skip the apps and platforms that many provide.
How can car finance impact my credit score in the long run?
One of the most intriguing things regarding car finance is the way that it is so deeply intertwined with your credit score - initially, you’ll find that you must have a score deemed acceptable to even gain access to car finance, but beyond that, you’ll come to realise that your car finance can actually begin to impact your credit score too! The way that it impacts your credit score will completely depend on how well you manage your monthly repayments - if you’re strict and ensure that every payment is made on time and in the full amount, you’ll prove that you are a reliable borrower that presents a reduced risk to future lenders. On the other hand, irresponsible borrowers who fail to make repayments or are found to make payments late will be waving a red flag to any future lenders, which could harm their chances of gaining access to credit in the future.
Credit scores are calculated using an array of intelligent personal information that the Credit Reference Agencies (CRAs) have available to them when you submit to a credit search. Whilst each different CRA uses a slightly different method to determine your score, the basic concept remains the same - high scores are better and low scores need to be improved.
- Your personal information:
Your name, address, salary, relationship status, and living situation will all be considered to determine your creditworthiness. The more stable you appear to be, the safer you are to offer credit to.
- Your credit history:
This will take into account any credit that you currently have or have previously had. By looking into this, the CRA is able to investigate your behaviour in regards to using credit - if you’re responsible and sensible with credit, you’re likely to have a higher credit score.
- Enquiries made:
One thing that many don’t consider is how applying for credit agreements can actually impact your credit score in turn; by applying for credit too often, you start to appear desperate for credit or overly reliant on credit, which is a huge red flag for lenders. Each time you apply for credit, a search will be done on your credit file - these searches leave a mark and can be seen by future prospective lenders.
- Public records:
If you’ve ever been involved in a bankruptcy, had a CCJ, or been under the restrictions of a debt management plan, this will likely play a part in lowering your credit score. Each of these events relates to previous financial trouble or trouble repaying debts, which will deter lenders from offering you credit without substantial benefits on their side such as high deposits or increased interest rates.
Why is your credit score different with each CRA?
Simply put, this is because each of the credit reference agencies calculates credit scores in a slightly different way, giving different weight to certain factors that they deem more or less important when determining whether you are a suitable applicant.
In most cases, your score will be calculated using the FICO system - this is an algorithm that CRAs use to calculate scores based on the relevant factors. By basing the scores on this system, they’re able to give you a score that’s based upon a standardised scale, however, the issue arises when the context is added into the algorithm, which is why different scores occur.
In some circumstances, the CRA may deem one factor to be more important than another, so they will increase the weight that it holds within the calculation, and vice versa. As this is down to the discretion of the CRA, this can vary depending on each individual CRA and the specific context under which you are applying for credit.
In short, this is why you are given varying scores when checking your credit rating using a selection of different CRAs. If you want to learn more about credit scores, what impacts them, and how you can improve yours, check out our comprehensive guide to credit scores!
What information do Credit Reference Agencies hold?
In the age of GDPR, data protection, and a world full of hackers, it’s never been more important to ensure that you’re keeping your data as safe as possible, which means you are right to be cautious about offering up your personal data to credit reference agencies online without knowing what they’ll do with it after your credit check is complete.
The main thing to remember is that giving your data to a CRA is very safe - they’re some of the most secure data handlers in the world and follow every guideline to the letter when it comes to your data. This allows you to benefit from their credit reporting services without having to worry about breaches or fraud.
Upon closer inspection, you’ll probably be surprised to learn just how much the CRAs know about you - credit checks are so comprehensive and detailed (as they have to be to get an accurate reading of your creditworthiness) that they know even the most minute details about you. Whilst this may seem a little excessive, it does mean that your credit score is incredibly accurate.
Some examples of the information that credit reporting agencies hold are:
- Your utility provider
- The banks that you are registered with
- All of your current and previous credit cards
- Any outstanding loans
- Your mortgage information
- Your address
- Any court orders such as a CCJ
- Your presence on the electoral roll
What cars are available at ChooseMyCar?
One of the major benefits of buying your new car with ChooseMyCar is the incredible selection of vehicles that you have to choose from in our catalogue. We work with over 2500 car dealerships from various locations across the UK, allowing us to offer cars to suit every person’s needs and requirements no matter if you’re after something practical, something comfortable, or something that looks the part.
If you’re worried about having to choose a car that’s tied to our finance plans, don’t stress about it - all of the cars in our catalogue are available with finance plans in place, so you can pay off the cost of your car in manageable monthly installments, allowing you to pay for your car in the most affordable way possible. You’ll have huge amounts of flexibility with our packages too - you select the deposit and length of the payment plan, giving you complete control over how your plan is structured. We even offer £0 deposits on some of our vehicles, allowing you to get straight into your payment plan without having to pull the funds together for a considerable deposit! Here’s a breakdown of all the different types of vehicle that are available at ChooseMyCar:
Hatchbacks (the UK’s favourite!)
The modest hatchback is the UK’s favourite style of car, and it’s easy to see why. Clean, compact, and comfortable, there’s very little that the hatchback doesn’t offer to the driver and passengers, with lots of affordable models available to ensure that everyone has the chance to drive one of these fantastic cars. With a large rear boot that makes up the entirety of the car’s back end, there’s plenty of storage space to aid you in the weekly shopping or trips to visit family and friends, making these some of the most practical cars on the market. Hatchbacks also feature folding back seats, which allow you to find even more storage space for those trips that require a more substantial load. Available at a variety of price ranges to suit every budget, the hatchback is an obvious favourite for city dwellers and rural folk alike thanks to their compact size, practical build, and fantastic efficiency.
The VW Golf is without a doubt one of the most popular hatchbacks in the world, and it’s pretty easy to see why - it combines style, space, and function together to create what is essentially the perfect modern car for almost any purpose, which is a truly terrific feat. Coming in 3 different models, Life, Style, and R-Line, you’ll be able to choose the level of tech and price bracket that’s best suited to your needs, meaning there’s something for everyone with the Volkswagen Golf. Technology aside the Golf is, and always has been, a bit of a beast within the hatchbacks category; it offers power, speed, handling, and aesthetic that very few cars in this category can rival, making it an immensely popular choice for any driver in the UK. The Golf is well equipped for any occasion, so whether you’re handling the morning commute, transporting luggage, or heading off on a long-journey trip, the Golf is the perfect companion.
Another standout vehicle in the hatchback’s category is the Ford Focus - it’s a long time favourite that’s never too far from the top of the pile when the cars in this division are ranked each year. First and foremost, we have to note that this car is a dream to drive. It handles with sharpness and precision whilst offering fantastic body control, which goes a long way to set it apart from the rest of the cars in the category. When you look a little deeper into the car, you’re presented with a wealth of features that improve your driving experience immensely; intelligent on-board computers, a premium sound system by B&O, and plenty of space for 4 adults and a boot full of belongings make this car a real force to be reckoned with, and a fantastic purchase for any modern driver.
The saloon car is designed to bring a little more elegance to the driving experience, presenting the passengers with more space, extra luxury, and a more sophisticated feel. With longer wheelbases, there’s far more space inside for passengers in both the front and rear seating - the boot is also completely external to the passenger compartment, which means each area has its own dedicated space. The only drawback to this design is that the boot often has less space and can be a little awkward to lead certain items into.
BMW 3 Series
Unless you’ve been living under a rock, you’ll already know that the BMW 3 Series is one of, if not THE, best car in the saloon and executive category - simply put, it offers everything you could possibly want from a saloon car. When looking to review this car, you find yourself pushed to notice anything that you don’t like about it - it looks gorgeous, it drives phenomenally, and it has one of the most luxurious interiors on the market, it really is nigh-on perfect. No matter whether you’re looking for something flashy, something functional, something spacious, or something sleek, the Series 3 offers everything and more! If you’re a fan of technology being used to enhance the driving experience, this BMW saloon has it all - the on-board computer is feature-rich and intuitive, which is sure to brighten up any trip you take in your new executive car.
Flashy cars aren’t for everyone, however, with some of us preferring to focus on function and price above all else. If you’re on the hunt for the best value car in the saloon division, it’s hard to look beyond the Skoda Superb. Now, we know what you’re thinking, “a Skoda?” - yes, Skoda has been associated with some less than impressive vehicles in the past, but in recent times, they’ve had more winners than losers, particularly when it comes to saloons to rival the top dogs. The Superb is exactly that: superb. If you’re willing to look past the sleek, yet admittedly tame outer shell, you’ll find that this car really is one of the best in its category and can easily stand up with the heavy hitters such as the Mercedes A Class and Audi A4. Offering an incredible level of comfort and space, along with great performance and affordable running costs, the Skoda Superb is one to watch in the executive cars division.
The estate car is the automobile industry’s answer to people who want the practicality of the hatchback and the comfort of the saloon car, offering the best of both designs for a truly fantastic experience. This is a very popular car across Britain, commonly being used as family cars thanks to their ample space and storage, or for long-distance travelling thanks to their elite level comfort and economy. In addition to this, estate cars are amongst the best models for utilising a roof storage box due to their wider design.
Skoda Octavia Estate
It’s hard to talk about estate cars and family cars without mentioning Skoda - over the last decade, the Czech car manufacturer has really taken hold of these divisions and made a lasting impression by offering practical cars with a surprising level of luxury and technology for an incredibly reasonable price. When it comes to space, there Skoka Octavia Estate is in a league of it’s own - the whopping 640-litre boot is more than enough space to pack the belongings of the entire family for a trip, or even to haul home furniture such as wardrobes without the need for van rental or the dreaded flat-pack! After a few years of drab design, the modern Octavia Estate even holds its own in the aesthetic rankings too, standing shoulder to shoulder with the premium brands with sharp creases and a really impressive interior that’s designed for comfort above all else.
Audi A6 Avant
If you want something with a premium badge, the estate car division is perhaps the most crowded - there’s offerings from BMW, Mercedes, Ford, and even the surprisingly luxurious Skoda’s to look at, but we think that Audi may just be coming out on top at the moment. The A6 Avant is everything you could ever want from an estate car. Space? Check. Style? Double-check. Technology? In abundance. As you’d expect from a premium manufacturer like Audi, this car feels a class above for both the passenger and the driver - when you’re driving, you’ll experience crisp handling, raw power, and a fluid driving feeling that you’ll have a hard time anywhere else. On the other side of the car, passengers experience a smooth and relaxing ride, even on longer journeys, with gorgeous seats and a fantastic entertainment system that delivers crisp, layered audio at any volume. If you’re looking to buy premium, the Audi A6 Avant simply has to be one of your top considerations.
MPV (multi-purpose vehicles)
If you’re looking for immense versatility and practicality from your car, there are few options that rival the MPV. The multi-purpose vehicle is designed to offer the driver exactly what they need as and when they need it - if you’re looking for group trips, you’ve got ample amounts of seating, but on occasions where you’re moving large items you have lots of accessible space thanks to removable rear seats and flush-folding seating which retreats right into the floor. This is ideal for scenarios where you might be moving tricky items such as furniture, which would not fit into smaller vehicles.
The humble MPV may signify a more practical, albeit boring, choice than an estate car or a hatchback, but if you’ve got the need for one then it can be an infinitely more useful one. MPVs, or multi-purpose vehicles, are designed to offer as much space as possible in a format that can be adjusted and manoeuvred to suit your needs. One of the most prolific in this category is the VW Touran - it brings the same level of comfort that you’d expect to find in their flagship Golf model, but enhances that with an abundance of space that allows you to comfortably fit 7 adults into the car with little to no issues at all. What intrigues us most about the Volkswagen Touran is the drive - it’s surprisingly nimble, agile, and speedy for such a big car, and this makes it one of the most enjoyable MPVs to find yourself behind the wheel of. Who said sensible had to be boring?
Ranking at the top of many people’s lists when it comes to the MPV category is the Citroen Berlingo, a long time favourite of MPV drivers over the past couple of years. It’s easy to see the appeal in the Berlingo; it’s a spacious, easy-access vehicle that drives well and looks great! On paper, there’s pretty much nothing that you could dislike about the Citroen, and the same feeling remains when it’s on the tarmac too. The car handles well, possesses more than enough speed, and tackles every journey with a sophisticated level of comfort that’s sure to keep everyone happy for the entire journey. For it’s surprisingly low price point, the Citroen Berlingo provides fantastic value for money, giving you a fantastic vehicle for your daily use that doesn’t break the bank. There’s also a feature-packed infotainment system integrated into the on-board computer, which adds one final layer of functionality to, in our opinion, one of the best MPVs that money can buy.
A rugged, well-built model that’s built for even the most testing terrains - the SUV is ideal for life’s explorer, adventurers, and chancers. A sports utility vehicle will make the most of its four-wheel-drive system when tackling hills or loose ground, making it a great choice for families who like to enjoy the outdoors with camping trips in the wilderness. In addition to this rugged build, you’re also given a surprising amount of comfort, style, and practicality - there is a spacious interior, large boot for all of your belongings, and a variety of incredibly stylish designs available to ensure that you look and feel like the king of the road.
The Seat Ateca may be a surprise inclusion on our list to many, but it if you’ve ever had the privilege of driving one, it’d be far from a surprise to see this fantastic SUV given a mention amongst the top cars in the category. Whilst Seat are relative newcomers to the SUV division, with the Ateca actually being their first attempt at crafting a vehicle in the SUV mould, their efforts have been valiant and pleasantly effective. The Ateca provides not only a spacious interior and elegant, yet simplistic finishes, but it offers best-in-class handling too, showing that this car really does mean business. Designed to offer a fantastic drive at an incredibly affordable price, the Ateca is a safe bet for your first foray into the world of SUVs. If you’re looking for something similar to the Ateca, but with a premium badge, check out the VW Tiguan!
Range Rover Evoque
What can be said for the Range Rover Evoque that hasn’t already been said? It’s a car that needs no introduction thanks to its iconic standing in the SUV division, where it really does stand head and shoulders above the rest. From it’s devilishly handsome exterior and the ultimate feeling of class and luxury inside the interior, there’s no aspect where the Evoque seems to dip in quality. That is to be expected, however, with the considerable price tag that is commanded, but this is offset by their ability to retain value in a way which no other SUV is capable of. This means you’re likely to be able to recuperate a bigger chunk of the amount you paid for the car if you choose to sell it at the end of your finance plan. If you’re looking for luxury, status, and an immensely comfortable ride, the Range Rover Evoque is the perfect choice.
The coupe takes the saloon car and turns it into the most stylish and fashionable vehicles on the road. These two-door cars feature a hard roof and are often designed to look sleeker and sportier than their larger counterparts - these cars are popular with those who are looking for luxury and style above all else. Whilst these cars may not be the most practical when it comes to hauling luggage to the airport or heading to the shops, they look fantastic and provide a level of style that simply cannot be rivalled by most other categories.
Audi TT Coupe
If you’re a fan of the coupe, you’ve probably already considered buying an Audi TT already. Perhaps the most prolifically brilliant car to come out of the division in the past decade, the TT Coupe looks perfect, feels perfect, and is, as far as we can see, perfect. All too commonly, we find cars in the coupe category offering a truly monumental look, but lacking in the practicality department, but the TT bridges this gap with ease - you’ll be able to run to the shops, make the morning commute, and visit family with a sporty zip, and you’ll look great as you do so.
Here at ChooseMyCar, we’ve got a range of Audi TT Coupe’s available to suit any price budget, helping you to get yourself on the road in a stylish, modern coupe with a convenient monthly payment plan that helps to keep the payments low and affordable each month. Get in touch to find out more about our bad credit car finance deals!
Mercedes S-Class Coupe
For those who are looking for an executive car that exudes luxury, class, and sophistication, you simply cannot look past the Mercedes S-Class Coupe. As you’d expect from a Mercedes, the interior is filled with technology to make your ride as comfortable and sophisticated as possible each and every time you jump in your car, but the exterior aesthetic is also a joy to behold - the sleek, sporty image couples well with the smaller build, with the iconic Mercedes grille completing the look for the S-Class. If you’re looking for a premium brand that doesn’t require the lofty prices commanded by Aston Martin and Bentley, allowing you to buy a classy, executive coupe without paying over the odds.
If you want to take a look at our range of S-Class’, click here to browse all of our available options! You’ll find a variety of different packages, from standard models to more advances packages and a range of engine types to offer the fuel economy that you’re looking to get from your car.
However, there are exceptions to the above rule and that is sports cars - these are the most premium vehicles on the market and are built for those who live fast and don’t have any time to waste. The sports car is all about the thrill of looking like the coolest person on the road - these small, lowered vehicles are built for speed and never disappoint; you can expect to be leaving everyone around you in the rear view mirror when you’re driving a sports car. What these cars lack in space and practicality, they more than make up for in thrill and aesthetic, making them a brilliant fit for those looking to look their best at every moment.
No matter what your budget is, if you’re a sports car enthusiast,you’ll be a huge fan of the Mazda MX-5. Although not a brand usually associated with flashy sports cars, Mazda have always made a claim for being one of the best in the game at producing cars that are incredibly enjoyable to drive. The MX-5 is a hugely popular car amongst enthusiasts, with the rear-wheel-drive setting it apart from most others in the category. What the Mazda does lack in practicality with its limited storage space, it more than makes up for in the driving experience department thanks to the sharp handling and the high-quality manual gearbox. Despite a lack of electronics, the fabric convertible roof can easily be removed from the driver’s side, which is perfect on those rare sunny days that are found throughout the summer here in the UK. Simple, stylish, and super-fun to drive, the Mazda MX-5 is the perfect sports car for any motoring purist.
Speed. Speed. Speed. That’s what you’ll get with the Nissan GT-R. Since its introduction, the GT-R has been offering explosive acceleration and speed that has been almost rivalling that of the supercars bracket, which is a truly astonishing feat given the low price that the GT-R is available at. One thing that the Nissan is famed for is the abundance of driver-assist systems that are in place to enable the driver to get the most of their driving experience. The steering is light and responsive, the engine offers bags of power, and the chassis provides unmatched agility, making this one of the best high-performance sports cars in the world.
If you’re looking to make the Nissan GT-R your new prized possession, why not take a look at the possibility of a car finance deal to help you spread the cost? We’ve got a variety of different payment options available, so get in touch with our team to discuss the available payment plans!
Last, but certainly not least, we have the convertible - these are cars that are designed to make the most of the sunshine, featuring a drop roof that can be removed as and when you desire. Convertibles are some of the most idyllic cars on the market - they offer an experience like no other, allowing you to find the wind in your hair as you drive through picturesque scenery with the sun blazing. Just make sure you put the roof back up before the rain starts to pour!
The MINI is undoubtedly one of the most iconic cars in the world and is synonymous with British engineering. In recent times, the MINI has now started to see the introduction of efficient German design, which has brought the MINI to an entirely new level. With the convertible MINI, you get a feeling that’s hard to beat; when the roof is down, the sun is shining, and the wind is in your hair, you’re sure to feel a true love for driving in that moment. Whilst you do lose a little bit of storage space in the boot due to the convertible roof being stored there, you still do have enough space to store your bags after the weekly shop, which is more than enough in most circumstances. Aside from the retractable roof, you’ve got the iconic MINI design and build, which has been a fan favourite for decades for good reason - it’s the right size, shape, and feel for those winding country roads.
Mercedes C-Class Convertible
If you’re looking for a convertible car that offers more luxury than the standard hatchback does, be sure to take a look at the Mercedes C-Class Convertible - it’s a real showstopper in the convertibles division. By taking the elegant build of the C-Class, which is a huge favourite in its own right, and combining it with the luxury that comes hand in hand with a drop-top design, you’ve got the perfect car for all conditions. When you’re on the road, you feel what sets this car aside from the rest of the pack in the convertibles category; you’ve got an intelligent trip computer, a comfortable, high-quality finish on the interior, and an aesthetic that’s sure to take pride of place on the driveway, the Mercedes C-Class Convertible is a fantastic choice for the modern professional looking for a little more glamour and sophistication.
Why you should choose a used car
When you’re looking to buy a new car, there are lots of options out there; buying outright, finance, new cars, used cars - they’re all great options, but how do you pick the one that’s right for you? In the end, it’ll come down to a mixture of price, function, style, and personal preference, which makes it one of the most subjective processes you’ll ever face. In general, we think that used cars are an incredibly underrated option here at ChooseMyCar - they’re incredibly reliable, they last for far longer than you’d imagine, and they provide a value for money that simply cannot be rivalled by new cars. However, many people do still have their apprehensions surrounding the purchase of a used car, which is understandable. They are more liable to damage or underlying issues, but that’s why it’s important that you do thorough research and quality checks before you purchase any vehicle, particularly those that are bought through private sellers rather than a dealership. If you have the option, try to get a trusted mechanic to have a look over the car before you commit to a purchase.
Used cars have quickly transitioned from an unwanted item to a popular choice amongst drivers looking for the best value vehicles - read on to find out why you should choose a used car next time you’re on the lookout for your next vehicle!
What are the benefits of driving a used car?
Used cars offer a wide range of benefits that set them apart from new cars, even making them a more appealing option in certain circumstances such as vintage cars, but it’s important that you don’t sacrifice quality for price or aesthetic when you’re purchasing a used car. In many cases, people tend to assume that used cars are rusty heaps that are decades old, but that couldn’t be further from the truth! These days, a used car is any car with a previous owner, meaning the vehicle could be in almost-new condition, but classed as second hand due to the fact it is no longer a “new” car. With this category change comes a significant drop in price that makes almost any vehicle more affordable in an instant, so there really are some bargains to be found when you’re searching for a used vehicle.
This saved money is a huge bonus - you’ll be getting a great car at a fraction on the cost, which can allow you to do one of two things:
- You can choose to spend the same amount of money that you were intending to spend on a new car, but get a much nicer second hand car for the money, giving you a premium car that you didn’t expect to be able to afford within the budget that you set out with.
- You can use the money saved to pay for your insurance or on upgrades to the car - this essentially allows you to get your insurance for free, or allows you to upgrade your car for no extra cost on top of what you would likely have spent on a shiny new car.
Of course, the money saved isn’t the only benefit that used cars present - they can also be more full of character or more worn-in, which makes them a little more comfortable and easier to call your own. They’ll even come with that ‘new car smell’ after they’ve had a deep clean and touch ups at the dealership before the keys are handed over!
It’s estimated that a new car will be worth just 40% of it’s value in 3 years’ time, based on an average of 10,000 miles per year, which means you could be faced with huge losses in a very short period of time by buying a new car straight off the car as opposed to a new car. On the other hand, you probably won’t see much of a drop in price at all over that same 3 year period in a used car; whilst there may be a slight decrease in value, the drop won’t be as drastic as a 60% drop in just 3 years!
Used cars also make a fantastic choice for drivers who like to change their vehicles on a regular basis, with almost no change in value over the course of your short ownership. You will be able to recuperate almost the full value of the car should you wish to sell it in a year or two, meaning the car essentially cost you nothing but the price of fuel over the course of the ownership, giving you enough money to then go and buy a new car that tailors to your current needs and desires.
One thing that’s likely to surprise you when browsing the range of used cars that are available is the sheer variety that is on offer - almost every car you could possibly imagine is available as a used car, from budget city cars to the most exclusive of sports cars and luxury vehicles! No matter whether you need a family car that’s best suited to the school run, a coupe that makes a statement in the office parking lot, or a show stopping sports car for the ultimate driving thrill, our used car selection has something to offer for absolutely everyone!
If you want to browse our range of used cars, simply head over to our online showroom, where you can take an in-depth look at all of the vehicles available at over 2500 dealerships located across the UK.
Are there any drawbacks of buying a used car?
There are, however, certain drawbacks of buying a used car that you need to be aware of before signing on the dotted line - if you aren’t aware of these, it’s possible that you could end up purchasing a vehicle that isn’t up to scratch. Perhaps the biggest disadvantage of buying a car that is used rather than a new car is that they often aren’t quite as reliable and could potentially require repairs more frequently depending on their condition. This can be down to a number of reasons; the car may not have been properly cared for by the previous owner, it may have had heavy usage in the past, or it could have had some bumps and scrapes that have left it a little worse for wear. There are many reasons that a used car may not be in perfect shape, but you are compensated for this in the lower price that you pay. With modern cars, this is less of an issue; most cars now are capable of hitting the 100,000 mile mark without needing any major repairs, giving them years of heavy use without any major problems in most cases.
The other big disadvantage is far more superficial than the previous one, so many not be deemed as important if you aren’t too invested in getting a certain colour or model. This disadvantage is the fact that you will need to be more flexible when you’re choosing your new car. You will have to consider lots of variables such as mileage, condition, and history, so you may have to sacrifice smaller aspects such as our favourite colour finish or certain interior details to get the car that’s in the best condition.
How can you tell if a used car is going to be reliable?
This will usually come down to your own knowledge of the car that you’re looking to purchase - if you know what you’re looking at and what to look out for, you stand a better chance at being able to identify potential issues with the car before any money has changed hands. Of course, not everyone has expert knowledge when it comes to cars and what makes them tick, here are a few things you’ll want to ensure you check before making any purchase on a used car.
Wear and tear
If you’re buying a used car, you’re going to have to deal with some general wear and tear. This is caused naturally through driving the car regularly and, in most cases, won’t impact the car in any way other than a few minor scuffs and bumps, but you should be able to live with that. What you need to look out for is a level of wear and tear that isn’t consistent with the age and mileage of the car - if the car is just a few years old but has a great deal of wear and tear and a high number of miles on the clock, the car may not be as good a deal as it seems.
One thing that most people forget to check is the interior - they’re too busy ensuring that the car is in good condition that they mindlessly forget to check how the inside of the car looks, feels, and smells! Remember, the interior of the car is a place that you’re about to become very familiar with once you buy the vehicle, so you’ll want it to be comfortable and well maintained, rather than battered and smelly.
The electrics are a vital part of the modern car, but at first glance it can be hard to identify any issues that are present. When you’re viewing the car, make sure you check absolutely everything electrical! Do the windows open and close properly? Does the air conditioning work? Does the radio operate as it should? These are all questions that you’ll need to have the answer to before buying. Although electrical faults are usually very simple to fix, it’s always better to try to avoid accruing any additional costs after the car has already been bought.
This is an important one. Panel gaps are a tell-tale sign that the car has been poorly repaired after a crash, so you’ll want to steer clear of any cars that have big gaps between the panels of the bodywork, or risk having to pay serious money for repairs further down the road.
How old is “too old” when it comes to buying a used car?
When buying a used car, age is far less important than mileage - whilst a car may be decades old, if the mileage is low it could very well be in great shape and well cared for, whereas a slightly newer car with hundreds of thousands of miles on the clock is likely to be on the decline and ready to be retired. When you’re looking at the car, it’s essential that you check the mileage not just as a standalone number, but in relation to the age of the car. This will let you work out how many miles the car has averaged per year, which gives you a better idea of how heavy the usage of the car might have been since it was first sold. In general, the newer the car is, the lower the mileage should be, so if you’re seeing newer cars with extremely high mileage figures, you may want to consider whether that car may already be a little run down.
Choosing a used car is all about finding a sweet spot between low prices and overall quality, but when you find a car that hits both of those criteria, you’re likely to find a fantastic deal that provides you with an excellent vehicle to call your own for years to come! Here at ChooseMyCar, we pride ourselves on being able to offer our customers one of the most extensive ranges of quality used cars in the UK. We work with over 2500 dealerships to ensure we’ve got cars to suit everyone’s needs and price ranges, so no matter what you’re looking for or what your budget is, you’re sure to find a car that will get you where you need to go.
For those of you who are interested in spreading the cost of the car using monthly instalments, get in touch with our team today to discuss the different finance options that we have available!
Tips for young drivers looking for car finance
You've learned the theory, had the lessons, and now, finally, you've passed your test - freedom! Or so you may think. Sadly, when it comes to young drivers looking for car finance, the problems don't exactly go away once you've received your certificate. The finance and insurance market isn't particularly kind to young drivers, mainly because they have no record of being able to repay a loan, make payments on time, or show, through a credit report, that they have a history of doing either of those things. In essence, young drivers are too risky, especially to lenders. However, there are plenty of things that young drivers can do to help ensure their applications for loans or car finance are successful, or, at the very least, have a greater chance of being approved. This section looks to explain, in detail, the problems you face and how you can help yourself go from someone with no/poor credit history to a young driver that is going to be able to secure the car finance needed for their first car.
After reading this section we're confident, here at ChooseMyCar, that you'll be able to secure the necessary finance from a lender and, before you know it, you'll have in your hands the keys to your dream car. We have a range of cars under £5,000 from a wide range of reputable manufacturers such as Volkswagen, Skoda, Fiat, and MINI. For more information, check out our used cars or get in touch with our team who will be happy to guide you through the process.
If you’re a young driver, these are the struggles you may face when applying for car finance
We've spoken to plenty of young drivers who are looking for car finance and have compiled, below, three of the most common problems. We're pretty sure you'll have encountered one, two, or all three of these problems during your search for car finance. Common problem number 1 is that, statistically, young drivers are more likely to cause, or have an accident. An accident can write a car off leaving the creditors, or broker, with no asset left, the potential risk to them of not having a car to sell, or lease, once the agreement is over is much greater with young people. In fact, studies show that drivers under 25 are the cause of 85% of accidents in the UK. This kind of statistic leads to an assumption, rightly or wrongly, that young people are unable to look after the car they are leasing, regardless of whether they intend to own it or not afterwards.
Secondly, young drivers have not had enough time to build up a good credit history, it isn’t so much that they have a bad credit history, they've just not had time to make good credit decisions. If you remove the ages and show a lender two profiles of people, one had a stellar credit rating and the other didn't have one, then chances are they are going to lend to the person who has proof of being able to make monthly repayments on time. Finally, another key problem young drivers face is the lack of disposable income they have. Young drivers are, by definition under 25, and will either have just left school or be making their way through university. Both options don't exactly come with a great degree of disposable income, even if you have a part-time job. This scenario means that many lenders simply can't trust that the young driver will honour the credit arrangements.
How do you build your credit score and what steps do you need to take to gain approval for credit as a young driver?
While those problems may appear daunting they are common and usually overcome with some planning and well thought out consideration. There are plenty of things young people can do to gain approval for credit as a young driver, and improve their credit score in general. Here, we're dealing with some quick and easy things you can do to avoid a bad credit score and ensure that, when lenders undergo credit checks, they see a young person that takes their finances, monthly repayments and financial circumstances seriously. All of what follows is about painting a picture of yourself that is free of risks, think of it like that.
- Register to vote - It may sound weird, but being present on the electoral role makes it much easier to be found for checks. Secondarily, it also gives the lender a sense that you're a person who is switched on to necessary processes and procedures in the adult world. To register to vote head to the Gov.UK website.
- Check for grammar - Make sure details on your applications are 100% accurate. For instance, ensure you have the correct address present, date of birth, and other key information that could be spelt wrong.
- Pay bills and other obligations on time - Whether its a phone bill, or other finance repayments such as a laptop, be sure to pay for these things on time and in full. These small acts show that you can not only pay potential repayments, but you can also sufficiently manage your money.
- Do your family members have bad credit? - If you have a joint account with someone, or are linked to a credit card that has a bad credit score, it could make credit checks harder for you because, in the credit search, you appear to be associated with a poor credit score.
- Work on reducing high-levels of debt - Actual debt is one of the worst indicators, along with County Court Judgements, that you are unable to handle finance processes. It is physical proof you can't pay the money back, essentially. Work on reducing this before doing anything else.
What are the different finance options for newly qualified drivers?
Throughout the car buying process, there are plenty of methods that you can choose to ensure you get the ideal first car. In this section, however, we're going to break down three of the main, most popular, ways of attaining car finance, one of which is especially pertinent to young drivers who are looking for car finance. The first option is the Hire Purchase (HP) which is a type of car payment that involves you paying agreed monthly fees, for a period of 1-5 years (12-60 months), until you own the car. The flexibility to choose the amount you pay out per month and the fact that, with some deals, there is an automatic right to ownership once the payments are complete, are just two reasons why HP is popular.
A second popular choice is Personal Contract Purchase (PCP) which is similar to the terms laid out in the HP, the only difference being that, at the end of the monthly payments, there is no presumption of ownership. A balloon payment can be agreed in the finance application, but that is not a given, a PCP can and does, just end with the car being handed back to the lender for them to use how they please.
The third and, arguably, the most relevant type of loan application on offer for young applicants is something called Guarantor Car Finance. This type of agreement involves a third party, usually a family member, who can be called on as a guarantor in case the young driver is unable to make payments for a given month. This guarantor gives lenders security that the payments will be made, one way or another. Young drivers love this type of deal, in our experience here at ChooseMyCar, because it gives them access to car finance, and to a future of motoring enjoyment. In addition, Guarantor Loans for Car Finance give the young person an opportunity to grow their own personal credit score and begin to have their own credit arrangements. In theory, if the payments are made, the third party should never need to be involved, hence its popularity.
Here at ChooseMyCar, we offer all these credit arrangements in full and can help guide you through the process to ensure you've got the deal that is right for you. Once finance has been attained you can then get started looking at which fantastic used car, be they for £5,000 or less, or £10,000 or less, you'd like to purchase.
What's it going to cost you?
When it comes to bad credit car finance, of course, the cost is the all-important figure. Cost determines the model of the car you choose, the size of the engine, and how long you're going to be paying it off for. When you have a bad credit score you have to be careful about the cost, and be 100% sure that you're able to pay off the money for the car in an appropriate period of time. With all that in mind then, we thought we'd go through a few examples of monthly repayments so you have an idea of the kind time period needed to repay the money, the potential risks involved, and how your personal circumstances, and financial circumstances, affect these repayments.
If, after reading this, you have questions, concerns, or queries, then be sure to get in touch with our team today who will happily guide you through the process and ensure you have the ability to pay via the appropriate methods.
A representative example of how your payments could look during a Hire Purchase agreement
When it comes to a Hire Purchase agreement with a bad credit score, there are plenty of things to consider, what follows is a representative example of how your payments could look. The following example is based on our typical rate for bad credit history, which is 25.4% APR. With a Hire Purchase agreement, it is important to consider the key features of these types of loans. The main feature is that, with an HP, you'll actually own the car at the end of the 1-5 year agreement, this results in higher monthly payments overall, and is ideal for people who are looking to own a car outright.
- Example 1
Let's say then that you are interested in a Hire Purchase agreement and want a used car that has a value of around £10,000. This could be anything from a Skoda Citigo, Fiat Panda, or Mazda 2, all of which are great vehicles, and are available for £10,000 or less with ChooseMyCar. Once you've decided the value of the car, you then need to determine the number of months you want to pay that initial loan off, let's say 60 months. Based on our calculations your monthly payments on a £10,000 loan would be £281.04. This, over 60 months, means that the total amount of money to repay is £16,862.40.
- Example 2
If £10,000 is a bit steep, let's half it in this example and look at what you’d need to pay back on a £5,000 loan. Then let's say you want to pay this £5,000 loan off in 2 years (24 months). Based on the aforementioned 25.4% APR for a bad credit rating, you would pay £261.50 a month, for 24 months, which means the total amount payable is £6,276.00.
Here’s what your payment plan could look like during a Personal Contract Purchase finance agreement
So, after looking at an HP example, let's now turn our attention to another popular form of finance option for people with poor credit history - Personal Contract Purchase (PCP). Unlike an HP, you never actually own the car, meaning the monthly payments are low. There is very often a mileage allowance, or mileage limit, that must be adhered to, in order to avoid additional costs. At the end of the PCP loan, you may be able to purchase the car outright or opt for a newer model, if all the obligations in the contract were honoured.
- Example 1
So you want to borrow £15,000 for a car, be it a coupe, saloon or MPV, and spread the cost over four years with a final balloon payment of £4500 to own the car. If we take our typical APR of 25.4%, for bad credit scores, we can calculate that you would pay £426.88 per month over 47 months with a final payment in month 48 of £4,500. The total amount repayable would be £24,563.36.
- Example 2
A second example, based on a cheaper price, would be as follows. If you wanted to borrow £6,500 and repay that over 60 months, with a final payment of £500, you would pay £179.78 per month. This again is based on our typical APR for people that have a bad credit profile, which is 25.4%.
Here’s our comparison between the different types of car finance available at ChooseMyCar
For this comparison, we're going to be comparing the two aforementioned types of car finance - Hire Purchase and Personal Contract Purchase. The other methods of car finance, that we’ll touch on, are related to HP and PCP and can be applied to these examples very simply. For these examples, we'll be using our typical APR for people with bad credit - 25.4%
- Example - So, let's say you have a budget of £12,000, you want to pay this off in 3 years, and you have a 'bad' credit score. If you took the HP option, where you own the car afterwards with no final payment, you would pay £463.58 over 36 months. However, by going down the PCP route, which, in this example, includes a final balloon payment in month 36 of £4,500, would mean you would have to pay £382.92 over 35 months. This shows an £80.66 monthly difference between the two options.
It's important to note that, at the end of each agreement you'll still own the car, it's just about figuring out which method works best for you and your financial circumstances.
What will your monthly PCH (Personal Contract Hire) repayments look like?
A PCH is essentially leasing with no option to buy, no matter how much you love the car! It is a very straightforward process, you choose a car and pay a fee to use it and, at the end of the monthly repayments, you give the car back. Think of this finance process like long-term car rental! Often with a PCH, you'll pay an initial fee and then fixed monthly payments. Other things to consider include maintenance packages that can be included in the monthly fee, and you can also adjust the deposit, and monthly payments, based on your individual circumstances. PCH have preferential rates and, very often, you'll pay a lot less in monthly fees because you're never going to own the car.
The monthly repayments will look very straightforward and are determined by the dealer, they don't necessarily relate to the price of the car because it isn't a factor in your decision (because you're not going to own it). Therefore, a poor credit rating isn't a huge barrier as it is down to you to pay the monthly repayments even if you pass the credit check.
How will my Guarantor Car Finance payments be structured?
These payments won't differ massively from any of the other bad credit car finance options, in all honesty. The payments in a Guarantor Car Finance deal will still be based on APRs, monthly fees, and optional balloon payments with the only difference being the presence of a third party. That third party is the safety net and will assume the debt if your poor credit score means you are unable to fulfil a monthly payment.
As long as you keep paying back the instalments the third party need never be involved in the process. As well as people with a bad credit report, Guarantor Car Finance is perfect for young drivers who haven't had the time to build up a credit score. With this option, you get the chance to improve your credit arrangements and show you're able to stick to a finance plan, safe in the knowledge that should something happen, there is someone, usually a family member, who can pay if needs be. What follows is an example of Guarantor Car Finance.
For a first car, you will more than likely have a modest budget of, say, £2,500. If you wanted to pay that off over 12 months, based on our APR for people with bad/no credit reports, which is typically 25.4%, you would pay around £235.01 a month, totalling £2,820.12. The only difference between this and a regular Hire Purchase agreement is that your guarantor would have to pay £235.01 if you were unable to one month.
Personal Loan Car Finance payments: how will it look each month?
Payments for a personal loan to help with car finance are very straightforward. Applying for a car loan is the same as applying for a regular loan, in this instance, ultimately it's about getting the cash in the bank to pay for the car. Your repayment plan goes to the bank, not the car dealership, as far as they are concerned their business with you is complete.
Once a payment schedule has been arranged with the bank, you’ll have the money in your account, making it one of the quickest ways of getting the used car you're after. Once arranged, you then just pay the bank back the monthly fees that have been agreed, regardless of the car you have purchased. You can use this car as you please without having to worry about it being used as security by a dealership if you're unable to pay. Also, there is no mileage limit, so there is no need to worry about how you drive it. If you got into financial difficulties, you could also sell the car to pay back the loan.
Having a bad credit score doesn't necessarily mean you won't be able to get the loan but it does help of course. For instance, you might not be eligible for the advertised APRs which could result in higher interest rates.