Advantage Finance

How Does Poor Credit Impact Car Finance?

Many people these days tend not to pay for a vehicle outright and like to simply finance it instead. An important part of getting a new car is the credit check to see which type of car finance is available to you. But what does that mean?

Financing a car means to obtain a loan from a finance company, such as Advantage Finance, that you will repay over time in monthly instalments. For a finance company to have faith in your ability to repay these installments, a credit check is necessary to see if you're a good candidate.

Recently found out that you have poor credit car finance? Advantage Finance is here to discuss how poor credit affects car finance and the different types of car loans for people with a bad credit history, and also what you can do if your loan application is declined.

A credit report will highlight both consistent and inconsistent past loan repayments, so if a payment has been missed, they will be able to see this, which lessens the chances of your application being accepted. It might also be the case that several different loans are being paid off at once or you're close to the maximum total credit limit of your revolving credit accounts. This might, too, impact a lender's decision, as it indicates that you're overly reliant on credit.

Finding cars on finance with bad credit

If you've been told that you have poor credit, fear not. There are some finance options for motorists with bad credit out there.

Low credit scores can happen to anyone and there are countless reasons why your score might be less than perfect, so don't let this stop you from driving. At Advantage Finance, we do our best to help those with bad credit so that they can get back on the road.

Options for poor credit car finance:

Don't worry about your poor credit score, Advantage Finance won't hold that against you. There's a fast application process available which means you won't have to wait around to know if you've been approved. Thanks to our understanding credit team, we can find the right finance option to suit you.

Personal loans

A way to finance a car can be through a personal loan. You can arrange a personal loan through your bank or through a building society, and like all things finance, the amount you want to borrow and your credit history will be the deciding factor of your repayment period and interest rate. For personal loans, the monthly repayments tend to be fixed, so you always know the total amount payable. Having an unsecured personal loan actually means you own the car from the outset.

Hire Purchase (HP)

This is a type of finance agreement that provides fixed monthly repayment installments that are to be paid over a set period of time. If you choose the HP finance option, the car will not belong to you until you have made all payments, so if you're unable to make the monthly repayments, it's possible that the car could be repossessed.

Personal Contract Purchase (PCP)

A more complex version of HP is personal contract purchase which allows for lower monthly installments but required a 'balloon' payment at the end in order to keep and own the vehicle outright. Instead, the vehicle can be handed back at the end of the term with nothing more to pay.

Connect with Advantage Finance today!

Finding car loans with bad credit needn't be a pain.

At Advantage Finance, we understand that not everyone can have a perfect credit history and that there are situations that are completely out of our control that can affect our credit score.

You may have been turned down by other companies but with Advantage Finance, we're here to help you get back on the road. All you need to do is apply for car finance now and we'll see what we can do for you.

Contact our friendly team today by calling: 01472 233200 or emailing: enquiries@advantage-finance.co.uk.