Bad Credit Car Finance To Suit You

Rates from 10.9% APR. Representative APR 19.9%

Audi A1

Bad Credit Car Finance.

A bad credit report affects financial choices. The road to credit recovery is paved with solid credit payments. This page outlines essential facts regarding bad credit and how it affects your car finance options. The information does not cover financial advice. Make sure you consult a professional if you require insight and expert opinions regarding your circumstances.

We use credit to measure the health of our economy. If credit is available, our economy is deemed to be in good health. When we apply for car finance (or any credit), the lender will investigate our financial health. The UK is highly respected for its accuracy, detailed referencing and legislation protecting consumers. Before we explore the world of bad credit motor finance, let’s walk through familiar terms associated with credit history.

A credit report details a person’s borrowing history and credit behaviours such as loan repayments. The data gathered in credit reports are provided to lenders. This information is used to determine whether to extend a line of credit and to work out interest rates to repay the loan.

Compare: Bad Credit Car Finance.

A credit rating assesses risk and assigns indicators represented by acronyms. For example AAA is the top score. A credit reference agency performs credit referencing checks, collates the data and assigns a rating. Yet they are not responsible for making decisions related to your ability to secure credit. Your credit rating data is important. The score is less so.

A credit score follows the same principle but uses bands of numbers between 300 and 850 to grade our creditworthiness. A credit score forecasts future credit behaviours based on past credit behaviours. Lenders don’t always view our credit scores. The credit score is to give us an idea where we stand. Lenders will arrive at the same conclusion by reading the data gathered in our credit report.

Always tell lenders the truth when filling in forms. Any question a lender asks you, they can verify using your credit history. It’s good to remember credit is as much about the lender making money as it is about our ability to repay it. Lenders are under no obligation to lend us money.

Apply Car Finance With Bad Credit.

Lenders review our credit reports when we apply for car finance. Those of us with good credit reports benefit from lower interest rates. As well as more attractive incentives attached to our finance deal. A bad credit report will alert the lender that we’ve had some difficulty repaying our debts in the past. Bear in mind if we have no credit history we will also have a bad credit report! Remember, we measure financial health with credit.

It’s essential to compare car finance deals, and especially important when we have bad credit. Taking the time to compare bad credit car finance deals gives us an idea of the type of interest rates the marketplace might offer us. As we would expect, a bad credit report attracts higher rates of interest, often over 30% APR.

Bad Credit Car Finance

Improve Credit Ratings And Compare Bad Credit Car Finance.

A credit check service provides an overview of our reliability. We can decide to improve our future creditworthiness today, by taking a couple of simple steps. These small actions can make a world of difference to the quality of the bad credit motor finance deals we are offered.

It is always best to contact your credit rating agency or view their websites to see how you can improve your credit score. This is because lenders perform their own hard credit checks, which are always best to be prepared for.

Prepare You For Bad Credit Car Finance.

If you see an error on your credit file, don’t ignore it, report it. Contact the credit reference agency and let them know. They’ll use the 28 days they are allotted to review your claim and advise whether they agree or disagree with you. In the meantime, the information you are contesting will be classed “disputed”. Lenders are not allowed to use this information while carrying out their credit checks.

Also, investigate adding “notice of corrections” to your credit report. These flags indicate past information is correct but doesn’t reflect your financial status or behaviour today. For example, you may have struggled to pay your bills while unemployed, and have since found work.

The most qualified person to fix your credit history, is you. If you treat yourself as a reliable borrower, everyone else will too. It’s always best to contact your credit reference agency if you are unsure about your credit report. Good luck!

Bad Credit Car Finance
Payment History
Amount You Owe
Length of Credit History
New Credit Opened
Type of Credit

Credit Score Breakdown.

What Factors Affect Your Credit Score?

Financial well-being is strongly influenced by people’s credit scores. Your credit score is a measure of your financial responsibility. The higher your credit score, the better your chances of getting car finance with lower interest rates, and other benefits. Having a low credit score may prevent you from qualifying for a car loan that you may want, or your interest rate for borrowing will be higher than those who have excellent or good credit.

If you seek advice on how to improve your credit score or simply require more information, please visit: Ultimate Guide to Credit Scores

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Rates from 10.9% APR. Representative APR 19.9% Representative Example: Borrow £6,000 with £1,000 deposit over 48 months with a representative APR of 19.9%, the monthly payment would be £182.26, with a total cost of credit of £2,748.61 and a total amount payable of £8,748.61. Car Loans UK is a broker not a lender. This is an example only, all finance subject to status. Lender fees may apply



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Rates from 10.9% APR. Representative APR 19.9%

Frequently Asked Questions.

Why use Bright Motor Finance for motor finance?

At Bright Motor Finance we have many lenders on our panel, so we can make sure you are getting the best motor finance deal for you. Plus, we do all the admin, paperwork and negotiations with the dealer.

How does car finance affect my credit score?

Initially, asking for a car loan will typically have a negative impact on your credit score due to the intensive credit checks that lenders will perform. You should be aware, however, that if you make your car finance instalments on schedule. This will almost certainly improve your credit score.

What is the difference between HP & PCP?

HP and PCP car finance are fairly similar to one another. However PCP tends to have lower monthly repayments. Although that the full amount that will need to be repaid is generally higher than with hire purchase.

PCP works by having a loan for the difference of the vehicles price when it is brand new, and the anticipated vehicle value when the agreement has been completed. This is because the vehicle will of course, depreciate over time.

HP works by usually paying a deposit of around 10% of the cars initial value, and then this value will be paid off in fixed monthly instalments. Car dealers as well as brokers (such as ourselves) can arrange a hire purchase finance agreement.

Can I change my mileage on PCP contracts?

In a nutshell, the answer is no.

This is because the car’s resale value has already been calculated once you’ve signed your PCP car loan contract. It is crucial to know that exceeding your agreed-upon mileage allowance will result in additional penalties at the end of your PCP contract.

What is a car finance brokerage service?

In essence, a car finance broker acts as a middleman between the customer and the lender. A car loan broker handles all the paperwork and negotiates with lenders on your behalf. By doing this, you can rest assured that the broker is fighting for you to get you the best deal. Our goal is to make your car finance journey as simple as possible. As well as this, car finance brokers such as ourselves have deals that aren’t usually available to the general public. Instead of charging the customer, car finance brokers charge the dealerships.

Can I alter my car if I finance it?

You can, but you must first obtain authorisation from the financial firm before making any changes.

What if I have been refused by other brokers?

There is still hope even if other brokers have rejected you in the past. We offer a number of finance options for those with bad credit scores at Bright Motor Finance. We will conduct a hard credit check when you apply for car finance through us, which may negatively affect your credit score. Especially if they were conducted within a short period of time. As a result, it is recommended that you wait between 3-6 months before applying for car finance again after being declined.

It can be quite confusing, but there are three elements of the loan to keep in mind when you’re deciding if this is the right type of loan to help you to buy a car.

Because many car dealers who offer you PCP car finance deals will expect you to pay a 10% deposit. Although occasionally there may be incentives from the manufacturer to entice you, such as a deposit contribution. This is sometimes up to £2000 and is only available if you use their finance option. Also, as with any other loan, the bigger your deposit, the less you’ll need to borrow and the less interest you’ll pay and in turn, opening yourself up to better PCP car finance deals.

Then the amount that you will need to borrow will be calculated based upon the depreciation of the car’s value across the length of your loan term. Then the deposit you put down is deducted from this amount. So, you’ll pay off the amount they calculate, minus your deposit but plus interest, in monthly payments for the length of your loan agreement. PCP agreements include the APR, because it takes into account the interest charged on the outstanding balance and any other fees associated with the loan agreement. Furthermore, a loan agreement lasts for 24 to 48 months and the interest added is usually from 4% upwards.

If you decide that you want to own the car outright at the end of the deal, you can make a final balloon payment. This is also called a GFV or Guaranteed Future Value amount. Then this is calculated according to the amount that your car is anticipated to be worth at the end of your loan agreement. Of course, this is entirely optional, but the amount they set is not usually negotiable.

What if I’m struggling to make payments?

Having trouble making your car finance payments? You have a number of options available to you. One of the following charities/organizations can provide you with free, independent advice. 

What is APR?

The annual percentage rate (APR) is the total amount charged for the loan. APR, on the other hand, comes in two varieties. Exact APR implies that the rate displayed to you is the rate you will receive. Representative APR, on the other hand, suggests that 51 percent or more of those who apply for financing will receive that rate. This means that customers with weak credit may face a higher APR.

Representative APR is commonly used to advertise a company’s rates. After you have provided the lender with all of the essential information, they will be able to provide you with your specific APR rate.

GAP insurance and do you need it?

What exactly is it?

Gap insurance is an abbreviation for Guaranteed Asset Protection.

Gap insurance is a type of insurance that is meant to cover the difference between the amount your insurance provider pays out in the event that your car is written off or stolen and the price you paid for the vehicle. However, you should be aware that gap insurance supplements, not replaces, your usual car insurance.

So, when do you need gap insurance?

Gap insurance can be beneficial in a variety of ways. First and foremost, if you took out a large loan to purchase your car. As previously said, gap insurance would be advantageous if your automobile was stolen or written off. This is due to the fact that the gap will pay off the existing debt.
Furthermore, gap insurance may be advantageous if you are concerned about the depreciation of your vehicle. In the first year, a brand new car will lose 15-35 percent of its value. As a result, gap insurance might assist you in receiving a larger reimbursement if your automobile is written off after it has already depreciated.

What Happens If There Is An Issue With The Vehicle?

If the vehicle is defective upon delivery, you can simply refuse it and return it to the dealership.