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Can I get Car Finance if I am Unemployed?

Posted on 26/08/2016

There are 1.71 million people who are unemployed in the UK and actively job seeking. As well as that, there are 8.93 million people who are unemployed and unable to work. Despite these figures, getting car finance whilst you are unemployed can be difficult as you are seen as a higher risk lender.

It is now more difficult to get car finance whilst you are unemployed as lenders have to ensure they follow guidelines that were introduced by the Financial Conduct Authority. The FCA want to ensure that finance brokers and lenders have an ethical approach to lending. This means lending responsibly to people who can afford to make the repayments as agreed so lenders now want to see some form of income when you apply for credit, even if you have a good credit score.

With the introduction of these guidelines, some lenders won’t accept Jobseekers allowance as a form of income so you will have to approach specialist lenders. The good news is that there are brokers and lenders out there who will consider your finance application if you are unemployed as long as you have a full driving license and are over the age of 18.

There are various other things you can do that will help your chances of approval such as putting yourself on the electoral register. This is so lenders can trace you at your correct address and determine your identity. If you are able to use a guarantor with your application this will also increase your likelihood of approval. A good guarantor would ideally be a home owner, or have a good credit score.

Can you get guaranteed car finance when you are unemployed?

No company should advertise guaranteed car finance as it is not possible to guarantee car finance for every customer, especially if you are looking for unemployed car finance. Making false or misleading claims about guaranteed car finance is an offence and action could be taken against the company making any claims such as these. It can be common for companies to advertise guaranteed car finance and charge a fee for making an application but you still aren’t necessarily guaranteed finance. They might ask for a very large deposit or require a guarantor.

Check out the lender or broker that you are interested in to see if they are regulated by the FCA and what types of finance they can offer. Whilst you should be prepared for higher than usual interest rates with sub-prime car finance, avoid going with companies who ‘guarantee car finance’ as they will charge extremely high interest rates.

Avoid making multiple applications when you are looking for unemployed car finance as you could potentially end up with multiple refusals which will negatively affect your credit score.

Whilst we cannot guarantee unemployed car finance, we will consider all applications fairly and work alongside our lenders to find approvals at the best rate.

Sources:
The National Archives

If you’re unemployed and interested in applying for car finance, fill out a quick application form and a member of our team will get back to you.

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UK Car Finance Limited. Registered in England
Registered number 9397657.
Registered Office Lakeside House, 30 Northumbrian Way, Newcastle Upon Tyne, NE12 6EH

Refused Car Finance is a trading style of UK Car Finance Limited and is acting as a licensed credit broker and a lender, we are authorised and regulated by the Financial Conduct Authority, registration number 714966. All finance is subject to status and income. Applicants must be 18 or over, terms and conditions apply, guarantees and indemnities may be required.

Written quotations on request. Certain exclusions for NI residents.

Note: We cannot be held responsible for specification errors, and price errors, we use Motortrade software which is not always 100% accurate. Copyright 2017 Refused Car Finance.

Refused Car Finance can introduce you to a limited number of finance providers based on your credit rating and we may receive a commission for such introductions.

*Representative Example
Cash price – £8,500.00, Deposit – £0.00, Amount of credit – £8,500.00, Rate of interest – 16.24% per annum, Amount of interest – £6,912.00, Lender Documentation fee – £0.00, Lenders option to purchase fee – £10.00, Total charge for credit – £6922.00, First repayment – £256.70, Followed by 58 Monthly repayments of – £256.70, Final repayment – £266.70, Total amount payable – £15,412.00, Representative APR – 29.9%

*Last month, over 51% of Refused Car Finance customers that had their loan arranged were offered an APR of 29.9% or lower

In the first 3 months of this year, UK Car Finance Ltd received 2140 unique applications, of which we were able to offer 2136 applicants a line of credit, subject to the applicant being able to provide acceptable proof of affordability, being free from insolvency and or/a supporting guarantor fitting the lenders eligibility criteria, this represented 99.8% of applicants in this period.

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