What to do if you can’t get car finance

If you’re struggling with getting approved for car finance, it can be disheartening. Whilst we are Refused Car Finance by name and by nature, there may be some customers whom we simply can’t help. But what should you do if you can’t get car finance? Not all hope is lost, but it’s time to start being realistic about your situation and exploring why you’ve been refused. Understanding the reasons for your refusal is key to future planning.

As a dedicated car finance broker, we strive to help as many people as possible get a car on finance. However, in some cases, none of the lenders on our panel may be willing to offer finance. In this instance, it can be good to take a step back and get a clearer view of the whole picture. Why are you being refused? What factors don’t lenders like? What are the eligibility criteria? Our guide below helps you understand these roadblocks to getting car finance.

Ask the lender why you were declined.

If you’ve recently been refused, the first thing you should do is ask the lender on what basis were you declined a car loan. It could be anything from too many missed payments, CCJs on your credit report, to lack of affordability. You can ask the lender directly or if you’ve applied through us, we can give you an insight into why you were refused. Each lender sets their own eligibility criteria and if you don’t meet their requirements, it can be an automatic refusal. Use the information provided by us or the finance lender on why you were declined and use it to your advantage. It can help you to identify what you need to fix before you start applying again.

Stop applying for finance.

If you’re desperate for credit it can be tempting to apply here, there and everywhere to see if anyone will give you a chance. However, multiple applications for finance in a short space of time can harm your credit score. When you apply for finance, you agree to a credit check being performed, to give the lender an accurate idea of how likely you are to pay back your proposed finance. Multiple credit checks on your report in a short space of time can have a negative impact on your credit score, especially if the lender is performing a hard search. When you apply with us, we only provide a soft search credit check, which does not harm your credit score, nor will it be recorded on your credit report.

Save money for a car.

Even as a car finance company, we’ll agree the best way to buy a car is with cash. There’s no monthly payments or interest to pay and you’ll own the car from the off. However, car finance is so popular because it allows drivers to spread the cost of their next car purchase into affordable monthly payments. Around 80% of drivers rely on some form of credit or finance to get their next car. If you’re being refused car finance and you find there are no options, it can be time to admit car finance is not for you. Instead, focus on saving your money to eventually buy a car outright. Buying a used car is a great way to get an affordable car, and there’s a seemingly endless amount of choice too!

Avoid payday loans or loan sharks.

Desperate people do desperate things, and one of those could be using a payday loan company or even a loan shark to help them get a car. Payday loans are short-term loans with extremely high interest rates. Not being able to repay a payday loan can lead to a dangerous debt cycle of borrowing and not being able to ever repay. Loan sharks offer similar loan terms, but they aren’t regulated by the FCA and are actually illegal in the UK. Both usually only offer small loans of up to £1,500-£2,000, which can also make buying a good car unrealistic anyway.

Seek independent financial advice.

And finally, if you’re struggling to secure a car loan and have exhausted every option, it may be a good time to admit defeat. Car finance isn’t catered for everyone, and there are obviously financial problems which are hindering your ability to get a loan. It can be worth contacting an independent financial advisor to discuss your current situation and work towards increasing your chances of getting car finance. Below are some key contacts who can offer advice for free.