Car Finance On Benefits To Suit You

Rates from 10.9% APR. Representative APR 19.9%

Audi A1
CAR FINANCE SOLUTIONS

Car Finance On Benefits.

For most of us, a car is an essential purchase for our daily lives. From getting to work to buying the groceries and ferrying the kids around, we all need our trusty four wheels to get us from A to B. And in the same way that having a car is a requirement to get around easily, access to finance is just as important in order to purchase it! After all, most of us don’t have the cash to simply buy a big ticket item such as a car outright. But what can you do when you need to obtain motor finance on benefits? And is it possible?

The good news is that, yes, you can obtain a car loan on benefits and there are different options available to you. Read on to find out more.

Why Is It Harder To Get A Car Loan On Benefits?

Finance lenders rely on credit ratings in order to make a decision about who to lend to. This is because they need to manage their risk. A borrower with a good credit rating and a regular source of income will be a less risky customer than an applicant who has a poor credit history and less available, or less reliable income every month. Even if you are trying to get finance on benefits, it is possible because there are lenders who specialise in motor finance on benefits.

Make It Easier To Get Car Finance On Benefits?

The best way to improve your chances of getting a competitive motor finance deal on benefits is to check your finances before you apply for a loan, establish your budget and your ability to repay each month after receiving your benefits and to carry out an online comparison search.

Car Finance on Benefits

What To Know About Getting Car Loans On Benefits.

When you take out a car loan on benefits, the lender will essentially buy the vehicle for you and then you will repay the cost of interest plus the loan in instalments, usually with one payment a month over a period of years. Some loans will require a deposit and others will not. The monthly repayments will usually be fixed at the same agreed amount each month. There may be a facility for overpayments if this is something you can and want to do at times.

It can be harder to get a motor finance deal on benefits because some lenders will only extend loan offers to people in employment. However, there are lenders which specialise in lending to people who are either on benefits or who may have a lower credit rating.

Make It Easier To Get Car Finance On Benefits.

The important thing to know is that these motor finance loans will tend to have a higher interest rate than other ‘standard’ car finance deals, however, you can adjust the repayment period so that the monthly repayment suits your budget.

These bad credit or benefits loans also tend to be quick and easy to apply for. This means that you will usually only need to complete a short online form in order to get an instant decision. The funds can then be in your bank account quickly, and sometimes as fast as 24 hours.

If you have a bad credit record, you can help to rebuild it by repaying your finance deal on time and in full every month. This will demonstrate to lenders that you are responsible and reliable with money. As you build and improve your credit record, it will become easier to apply for competitive credit deals in the future. 

 
Car Finance on Benefits
Payment History
35%
Amount You Owe
30%
Length of Credit History
15%
New Credit Opened
10%
Type of Credit
10%

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.

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.

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.

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.

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. 

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.

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 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.

Where can I purchase gap insurance?

Thanks to Bright Compare, comparing gap insurance quotes has never been easier!

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.

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.

Is there anything to consider?

Yes.

  • You will not own the car until you make the final payment.

  • You are also not permitted to sell or modify the vehicle in any manner without receiving permission first.

  • Third, monthly repayments are typically higher when compared to PCP and other car leasing plans.

  • Finally, it can be expensive if you only need a short-term arrangement

What affects the cost of my car finance payments?
  1. Your deposit size
  2. How long your car finance agreement will last
  3. The interest rate
  4. What car do you choose?
Assessing my credit record?

You can also see your credit report by contacting a company such as Experian or Equifax before you make an application online. It costs about £2. You can see your credit report online and determine whether it is accurate and correct. If you spot any errors, you can request that a note is added to your report for lenders to see. If you are struggling to obtain even bad credit loans then it makes sense to check your credit report before you make any more applications.

It may be that there is an error that needs to be corrected first. Remember that every credit arrangement you apply for will record a search against your file, and too many of these may put lenders off as it suggests you could be over-extending yourself with finance. So before you apply for your benefits car loan, pause on any other finance applications for a period of time and focus on repaying every other credit arrangement that you have fully on time – including utilities, mobile phones, credit cards and so forth. This will put you in the best possible position for your application.

Why compare car finance on benefits?

When you compare motor finance on benefits, you can instantly see which lenders are likely to be prepared to lend to you. Use our website to compare motor finance on benefits and it makes the entire process quick and easy. Simply enter your basic information and we will instantly scour the market to see which lenders may be prepared to offer to you and on which terms. When you see the car dealership which is best for you, you can then apply for your loan quickly and without delay, by clicking through to the lender via our website.

What Information Do Lenders Ask For?

When you apply for your car loan, the lender will ask to see evidence of your benefits income. This could include jobseekers allowance, disability allowance, Universal Credit or another form of benefits income. If you also have another source of income such as a job or pension, the lender will also ask to see this information. They will then carry out a credit check as part of the application process.