Self Employed Car Finance To Suit You

Rates from 10.9% APR. Representative APR 19.9%

Audi A1
CAR FINANCE SOLUTIONS

Self Employed Car Finance.

More and more people are moving away from the traditional 9-5 and setting out on their own. The Office of National Statistics has reported that a record level of people were self employed in 2019, with 5 million people choosing to take that route. New technology has meant that people can work far more flexibly, fitting work around lifestyle and other commitments such as childcare.

Being self-employed can be really rewarding and there are lots of positives such as being able to choose your own hours, pick the clients you want to work with, and have greater freedom.

Lenders are not legally allowed to guarantee a loan, so be wary of lenders who make those claims. However, while most lenders will need three years of accounts, especially those offering better deals, there are ways around it.

Compare Self Employed Car Finance.

Other than a house, your car is probably the biggest expenditure you will make and purchasing a car outright is expensive. Buying a car on finance allows you to spread the cost of the vehicle over more manageable monthly payments.

Every lender will review loan applications to see if the applicant’s income can meet the repayment schedule. Notoriously risk-averse, lenders will only approve loans if they feel comfortable that they will get their money back. Being self-employed can mean a less regular income or an income that can be subject to changes from external influences, so a riskier prospect than someone on a regular salary. However, your choice of career path shouldn’t determine whether you can get a car that suits your budget.

Self Employed With Bad Credit.

Being self-employed can mean an income that is prone to being unreliable, something that can impact a monthly repayment schedule. If you default on a loan, it will leave a negative mark on your credit file. And this is what makes lenders feel concerned about approving loans to those with poor credit ratings.

Having a deposit to put down may help achieve a better rate and better terms from lenders. But it will mainly be determined by your credit rating. Hire Purchase can be another method to achieve purchasing a car and, in turn, boost your credit score. If you can spread your payments across a period of time and maintain a schedule, you will be able to improve your rating which can only be of benefit in the longer term.

Self Employed Car Finance

Self Employed Car Finance, What's Next?

Before setting your heart on a particular vehicle, it is really recommended that you consider the extra costs involved. For starters, the lender will want to know your choice of vehicle, as each vehicle will change the rates you pay. There are also other costs to consider, for example, a car with a more powerful engine will use more fuel, will incur higher insurance costs due to the higher costs of repair and maintenance. A car with modifications will also result in higher insurance as they cost more to repair or can be more at risk of damage and theft.

Some lenders will also be reticent to approve a loan for a business vehicle. Typically business vehicles are used more and therefore have much higher mileage and, in turn, require more maintenance and upkeep than average everyday vehicles. People wanting finance for a driving instructor’s car or taxi service are particularly subject to this.

Self Employed Car Finance: What Else Can You Do?

When you compare self employed motor finance with achieving finance in full time employment, it is often a harder prospect. But there are a number of things you can do to make it more likely you’ll be approved.

There are several credit agencies in the UK that you can use for free to check your credit score. These agencies have your name, address, presence on the Electoral Roll, evidence of CCJs, and any other financial products, such as loan defaults, overdrafts, and how many loan applications you have made.

Self Employed Car Finance
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.

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.