Car Finance with Defaults

Although it can make things a tad more complicated, you can still apply for car finance with a default on your file. At We Finance Any Car, we focus on making every day a little easier – that starts with securing a reliable car.

Compared to mainstream lenders, our panel is open-minded in their approach and more willing to assess risk. There can be any number of financial hurdles that may have affected your ability to keep up with a previous loan. Rather than relying on past defaults, we will assess your current financial situation and find an achievable deal.

Our goal is to set you up for success.

Get in touch with our friendly team today to discuss your individual requirements.

We recognise that receiving a default can be an incredibly stressful experience, both emotionally and financially. To add to this, it can also have a negative effect on your credit score.

The extent of the damage will depend on several factors, including the amount of debt involved, how recently your account fell into default, and your overall credit history. The number of defaults received will also have an impact.

When evaluating your creditworthiness and ability to fulfil the finance agreement, your score is something that lenders will take into consideration. In short, the lower your credit score, the more challenging it will be to get approval. 

You may have been turned away from car finance in the past – not with us!

It’s important to remember that having a default in your financial history may result in higher interest rates or less favourable loan terms. However, we will do our best to help you secure a reasonable payment plan that meets your needs.

Unfortunately, another person cannot apply for car finance on your behalf, even if they have an excellent credit rating. This is due to the legal and financial responsibilities of signing an agreement. It is also crucial that the person entering into the deal is the one who will own and use the vehicle, as they will be liable for any maintenance issues as well as insurance.   

The good news? There are alternative options available to you. 

At We Finance Any Car, we understand that, in many instances, it can be difficult to secure a finance deal on your own. That’s why we offer joint and guarantor car finance solutions. 

Joint car finance: When applying for car finance with a co-borrower, both applicants are equally responsible for repaying the loan. This can help to improve the application’s overall creditworthiness, as long as the other party has a strong credit rating. 

Guarantor car finance: Having the support of a guarantor can also help to strengthen your application.  Unlike joint car finance, the guarantor will not be responsible for fulfilling the finance agreement, unless you are no longer able to meet the monthly payments. To improve your chances of success, they will need to be financially stable and have a healthy credit score.

If you are unsure which is better suited to your situation, our team of experts will be more than happy to help!

One thing to keep in mind is the way in which the APR is calculated, taking into account the interest rate and any other additional fees. If you have a poor credit history, we would usually recommend going for a joint car finance agreement.

Generally speaking, you are more likely to be approved for car finance if a reasonable amount of time has passed since the default. Although this can vary depending on the lender’s specific terms and conditions, a common timeframe is around 1 to 2 years.

Having an ‘unsatisfied’ default on your credit record is an indication to lenders that you still have outstanding debt. This can make it much harder to secure a loan. If there are any particular reasons for this, such as long-term illness or job loss, we would always recommend reaching out to a credit reference agency. While they won’t be able to get rid of the default, they may be able to add a note that explains to lenders why you were unable to make the payments. 

If you have the funds to pay off the remaining debt, the status will be updated to ‘satisfied’ and lenders will be more inclined to offer you a deal. 

Remember, eligibility for car finance will be different for each applicant. All aspects of your personal circumstances and financial stability will be reviewed by the lender before they reach a decision.

Never let having a default prevent you from applying for car finance – we may still be able to help you!

For anyone applying for car finance, the prospect of having your credit score impacted can be a daunting one. Maybe you’ve applied for a loan previously and had a negative experience. This is because the majority of mainstream lenders will automatically rely on a hard credit check when reviewing applications. Although the impact is small and short-term, it can lower your credit score. 

For those who have a default on their credit file, this can be even more concerning. 

We’ve come up with a simple solution. Once you have submitted an application, our panel of lenders will use a soft credit search to assess your creditworthiness – removing any risk of damage and improving the experience for all.