Self Employed Car Finance

£8,000
48 Months

48 monthly repayments

£356.94

Best available rate 6.9%

Total cost of credit £1,069.12

Total repayment £8,569.12

48 monthly repayments

£356.94

Best available rate 6.9%

Total cost of credit £1,069.12

Total repayment £8,569.12

Representative example:

Borrowing £6,500 over 48 months with a representative APR of 21.4%, an annual interest rate of 21.4% (Fixed) and a deposit of £0.00, the amount payable would be £196.24 per month, with a total cost of credit of £2,919.52 and a total amount payable of £9,419.52


Car Finance for self-employed drivers

The number of self-employed people in the UK has been rising for a couple of decades now. Many people need access to a car to help them get to work, transport their family from a-to-b or simply to live their day-to-day lives. 

Being self-employed can be a wonderful experience, adding a sense of satisfaction you may not have found in another job that’s then coupled with a feeling of freedom. Unfortunately, despite the rising numbers of self-employed people, lenders may be reluctant to enter an agreement for car finance.

Without a guaranteed regular income, and potentially not having three years of accounts to prove your income, can lead some lenders to have concerns over your eligibility to meet payments.

In some instances, you may struggle to get lenders to agree to a car finance deal at all, or a deal you may have to settle for a deal with a poor rate. You may be treated like someone who has bad credit, even if you don’t. We have more information on car finance for bad credit.

Can you get car finance when self-employed?

This doesn’t mean that getting a car on finance when you’re self-employed is impossible, or that you’ll definitely have a bad deal. There are still good options for self-employed people looking for car finance.

At ChooseMyCar we understand that a used car could be an integral stepping stone into starting your new business, and we are here to provide specialist finance for self-employed people. 

What's the best way to finance a car if you are self-employed?

Before applying here are our tips on preparing yourself for applying when you’re self-employed. These are also worth considering if you are self-employed and are classed as a young driver, or if you have a bad credit rating, like an existing CCJ or IVA.

1. Check your credit report

Before you begin, it's sensible to check your credit report. There are three main credit agencies you can do this through in the UK. These are EquifaxExperian, and TransUnion

It's worth checking your credit report for inaccuracies, error, misunderstanding or other potential errors that could have downgraded your credit score. Your credit report will also provide you with tips on how to improve your credit score over time, and we also have a detailed guide on how to improve your credit score

2. Get your finances in order, including proof of income

To get things going it’s best for you to get your finances in order. Ideally, you’ll have three years worth of earnings which you can show a lender to prove your regular income. If you can’t do this though then there are a few things to consider. Just like improving your credit rating, it would make sense to do the following:

  • Settle any old loans or debts
  • Cancel any non-essential subscriptions 
  • Close any historical joint bank accounts or other financial links with people that have a poor credit history

3. Get on the electoral roll

Just like with a credit score you’ll need to get yourself on the electoral roll if you aren’t already. This will allow you to confirm your name and address, and it’s often the first port of call for lenders when making checks.

4. Provide up-to-date trading accounts

Providing lenders with your up-to-date trading accounts will allow them to see your ability to meet payments. They’ll be able to see your available finances after business expenses have gone out.

As previously mentioned, the more years you can provide the better as this will prove your income and ability to meet payments. However, with the growing number of self employed people in the UK in recent years, many lenders have relaxed their stance on this considerably, often allowing only two years of accounts or potentially even one year.

5. Show them your personal bank statements

If your business is still too new to prove your income over a longer period of time you may need to provide them with a series of bank statements. This can provide proof of your incomings and outgoings.

This can give an overview of your financial history and highlight your ability to budget and keep money aside for additional expenses.

6. Be honest & Realistic

Be upfront and honest with your incomings and outgoings. Do not artificially inflate your incoming. Make sure you only apply for something you can definitely afford. Being turned down for a loan or missing repayments will negatively affect your credit score.

7. Consider a large deposit

If you can afford a big deposit upfront this can greatly decrease the amount you need to loan and increase your chances of being approved.

8. Consider a guarantor loan for

Using a guarantor allows someone else to pick up any payments you may miss. This can be an attractive prospect for a potential lender. Read more on guarantor loans.



Looking for car finance?

Get a quote in minutes with no impact on your credit score

Frequently Asked Questions

It is possible to get car finance with bad credit. Many lenders provide loans and finance options specifically for people with bad credit.

Personal loans can be a great car finance option if you have bad credit. And a guarantor loan may help you avoid higher interest rates; this is where a friend or family member co-signs the loan, agreeing to meet payments if you're unable to.

With pre-approval on a personal loan, you can walk into the dealership like a cash buyer. You can be in a better position to negotiate on price. And you can avoid the stress of the finance office.

Yes, you can get car finance using a guarantor. Having a guarantor may make a lender more likely to accept someone with bad credit or no credit history as a borrower. This means they can be a good option for people in these situations. 

While a guarantor can help someone who has bad credit get approved for car finance, they themselves cannot have a poor credit score.

Having a guarantor can help you to get a loan when you otherwise may not have been able to, i.e. when you are a young driver, self employed or have bad credit.

Lenders may look more kindly on someone in one of these situations if they have a guarantor so they know that there’s less chance of a missed payment.

Read our guarantor loan guide.

ChooseMyCar