Guarantor car finance is a perfect solution when you need a car but are worried you won’t get approved on your own. Car finance with a guarantor can also see you offered a lower APR % because the risk is reduced from the lender’s perspective. We’ve put together the best advice on getting guarantor car finance for both the person applying and the guarantor.
Any questions along the way just hit the chat button and we’ll get back to you.
Get Guarantor Car Finance Today
Getting a car finance loan with a guarantor is really simple, just get started by applying online and we will do the rest.
What is Guarantor Car Finance?
A guarantor car loan means that someone you know, usually a family member or close friend, agrees to pay your repayments when you miss yours, essentially guaranteeing the lender that the repayment will be made.
This type of finance is a very popular choice with people with bad credit or no credit. If you have been declined for car finance before or you’ve had a few hiccups lately then this can be a brilliant way forward for you. Find out more about Bad Credit Car Finance.
How does guarantor car finance work?
When you apply for car finance with us we will try and get you matched up with a lender that does car finance without a guarantor as this is typically the preferred option for most people. However, if this isn’t possible then we look at your best finance options.
If this happens then one of our car finance experts will give you a quick call to let you know that a guarantor is needed to get you approved, or that we have you an approval already in place but a guarantor may help you get an even lower rate.
Depending on which lenders we get you approved with it works a bit differently, we will guide you through it though so don’t worry. Usually what happens is you’ll be sent some documents over from the lender for both you and your chosen guarantor to sign. The lender may also call the guarantor just to ensure your guarantor is aware of what is happening.
Once the lender has signed docs from both you (the borrower) and your guarantor, they may pay the loan into either your bank or your guarantors. Either way is quite normal, some companies decide to pay into your guarantors to protect against fraud. If this happens then the guarantor is expected to then transfer the amount on to you.
Once this has been done, the lender will keep in touch with your guarantor so they can see you are keeping up-to-date with your monthly statements. This information is usually available online too.
Car Finance Guarantor Requirements
Both you and your guarantor much have lived in the UK for at least 3 years
You are both at least 18 years old
Does the guarantor need to be a homeowner?
No, our car loan guarantor requirements do not include being a homeowner, it’s just a bonus if they do. Your guarantor should have a good credit if they are not a homeowner to give you both the best chance of being approved.
Who is guarantor car loans most suitable for?
Guarantor car loans are most suitable for those who have poor credit and struggle to get a car loan on their own. If you are self-employed you can sometimes find a guarantor can help ease the lenders’ mind and ensure you get the approval you’re after. Find out more about getting car finance when self-employed.
Bad Credit Car Finance with Guarantor
If you’re looking for bad credit car finance you’ll find the support of a guarantor will massively increase your chances of being approved. We specialise in helping people with impaired credit reports so don’t worry, our team are experts at getting you the most suitable finance package.
Being a Guarantor for car finance
Have you been asked by a family member or friend to become their guarantor on a car loan? You might be wondering what this even means and what exactly would you be agreeing to.
Being a guarantor for car finance means you are acting as a backup for the person taking out the guarantor loan. If they miss a payment it becomes your responsibility to pay the loan back. Accepting the responsibility of becoming a guarantor should be taken seriously as once you have accepted you can’t back out once outside of the 14 days cooling off period.
Personal Loans with a Guarantor
One of the biggest perks of getting a guarantor loan is it’s basically a personal loan with a guarantor. Why is this good? It means you can spend the money on whatever you want. If you get a £10,000 guarantor car finance loan for example, but the cost of the car is £9,500 you could use the remaining £500 to buy literally whatever, it’s your money.
Our advice:
Whether you’re the borrower or the guarantor you need to know what happens if you miss payments and how you can protect yourself.
What happens as a guarantor if the person taking out car finance doesn’t pay?
If the person taking out guarantor car finance misses a payment, then the lender will get in touch with both them (the borrower) and you as the guarantor. They will work with the person borrowing the money first to try and get them back on track. You are there as a safety net, so they will try and sort things out with the borrower before speaking to you.
The guarantor car finance lender will usually take about 14 days to try and resolve a missed payment with the borrower, however, if they are not able to get in touch or the payment won’t be made then they will contact you as the guarantor.
What happens if the guarantor can’t meet the repayments either?
This is a terrible situation to find yourself in. Usually, if the lender is worried this might happen you won’t be accepted for the guarantor car finance, to begin with. But unfortunately, things can change, and your financial situation may have completely changed since you first got accepted as the guarantor. If you find that the lender is requesting repayments from you and you’re unable to make them, you are likely to see the following happen:
- Your credit score will be damaged as your missed payments are recorded
- You will likely be summoned to court as the lender tries to claim the money back
Prevention is far better than cure. To avoid this situation, you can do the following to protect yourself:
- Read and re-read your documents to ensure you know exactly what you are agreeing too
- Put some money aside just in case you are required to make the repayments
- Have a discussion with the person asking you to be their guarantor to find out how they plan to pay the loan back
Guarantor car finance low apr
One of the best perks to using a guarantor when getting car finance is it often reduces your APR meaning you could be paying back less than if you choose to get car finance on your own. What’s not to like about that? Even if you’re credit score is pretty good, we recommend considering a guarantor car loan to strengthen it further.
How long does it take to get car finance with a guarantor?
We work as fast as we can to help you get the most suitable guarantor car finance. We know that for most people the need for a car is pressing and as such, we look to get your car loan paid out as fast as possible.
As long as you have given us the correct details, we can match you up with the right lenders in a matter of minutes. When it comes to getting a guarantor car loan, you typically wait about 24 hours from when the documents are signed, to getting your car finance paid out.
Once the loan has been paid out you can buy your car from anywhere. This is one of the biggest benefits of getting guarantor car finance as it means the money is yours to buy whatever you want. Unlike standard car finance where the loan only covers the cost of the car, with guarantor car finance you can use the money on car insurance, tax, fuel, air fresheners, or anything else you want. It also means that you can buy your car privately if you wish.