What car finance lenders look for in applicants

There are a number of things that car finance lenders will want to know before approving or rejecting your car finance application. Car finance lenders typically want to look at the following: credit history, income and expenses, deposit and employment history.

Don't worry, we've broken this list down into bite-size chunks, for ease of understanding.

Car finance lenders will look at your credit history

Not sure what a credit score is and haven't had one calculated before? A credit score is a number which represents your creditworthiness (i.e. whether you're likely to repay a loan) and this is calculated by analysing your credit history and other information on your application. Your credit history will contain information about:

  • Bankruptcy
  • Current credit loans
  • Late payments
  • Outstanding debts
  • Past county court judgements and defaults
  • Unpaid collection accounts

It's good to keep in mind that a couple of credit setbacks does not equate to an immediate rejection to your car finance application, but it may affect your interest rate.

Car finance lenders will look at your income and expenses

If you have a good, regular income and manageable expenses, a car finance lender will consider this positively because it's likely that you will be able to meet your repayment obligations each month. That said, a high income does not immediately equate to an approved application, because it might be the case that you have particularly high mortgage payments, rent or other outgoings.

Car finance lenders will look at your deposit

If you're looking for a small loan, the more likely you are to be accepted as the payments will be easier to manage. So, if you can make a larger deposit up front, the more likely you'll be to get a better interest rate from your car finance lender.

That said, it might not always be worth paying a larger deposit for a marginally better interest rate, because you never know what's around the corner, so keep enough savings on the side for the 'what ifs'.

Always shop around to find yourself the best deal. Just because one car finance lender rejects your application or requires payments that don't meet your needs, that doesn't mean there won't be another car finance lender out there that's better suited to you.

Car finance lenders will look at your employment history

Most of the time, a car finance lender will need to ensure you have a stable income so they may ask for further information about your employment history or want to see bank statements or payslips.

How to better your credit score

You can improve your credit score easily by regularly paying back credit commitments on time, keeping the amount you use low keeping bank accounts in credit, and monitoring your accounts for any discrepancies or fraudulent activity.

What you can do when looking for the right car finance lenders

Firstly, look for reputable lenders who have good reviews. Secondly, shop around for the best deal!

Complete your application form to finance your vehicle purchase with Advantage Finance

Vehicle finance needn't be a laborious process. At Advantage Finance, we take an honest and open approach, and tailor our services to meet your individual financial needs.

We're a leading car finance company in the UK, and do all we can to ensure your experience is hassle-free. Specialising in all auto loans, including motorcycles, vans and caravans - we can provide a finance option to suit all budgets and requirements.

And don't worry if you have a bad credit history - we believe that everyone should have equal opportunities and access to a good car finance lender. So if you would like to see what we could do for you, please do start your application today. Should you have any queries, please visit our FAQ page or contact us for more information.

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Representative Example: Hire Purchase Agreement repayable over 48 months. Rate of Interest: 14.0% p.a. flat rate(fixed).
Vehicle Purchase Price: £7,500. Deposit: £0.00. Amount of Credit: £7,500. Acceptance Fee: £325.00. Interest Payable: £4,200.44.
Option to Purchase Fee: £200.00. Total Charge For Credit: £4,725.44. 47 Monthly Repayments Of: £250.53 Followed By 1 Final Repayment Of: £450.53
(Final payment includes Option to Purchase Fee). Total Amount Payable: £12,225.44. Representative APR:29.35%.
Hire Purchase. Terms and conditions apply. You will not own the vehicle until all payments are made.
Finance subject to status. Applicants must be aged 22 or over. Finance provided by Advantage Finance Limited.

Advantage Finance Ltd is registered in England and Wales with company number 03773673.Registered office: 2 Stratford Court, Cranmore Boulevard, Solihull, B90 4QT.
Advantage Finance Ltd is authorised and regulated by the Financial Conduct Authority (Firm reference No. 307864). www.fca.org.uk
Advantage Finance Ltd is a member of the Finance and Leasing Association www.fla.org.uk
Finance is available to UK residents only and is subject to creditworthiness and affordability assessment. Written quotations available on request.
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