Car Finance on Benefits

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Securing car finance on benefits is more achievable than you might think. For millions of people up and down the country, benefits are a vital source of income – helping to pay the bills and feed the family.

But, in many instances, applicants on benefits are being refused a finance agreement. Why should this be the case?

At We Finance Any Car, we are breaking down the barriers of mainstream car finance. When it comes to buying a car, we believe that everyone should be entitled to a little extra support, regardless of their individual situation. Having a reliable vehicle is a necessity, not a luxury. 

So, how can we help?

Whether benefits are your only source of income or you have additional forms of financial support alongside your primary income, we take all circumstances into consideration. Working with a panel of lenders who specialise in a range of car finance types, we’ll help you find an agreement that suits your needs.

With us, you’re in the best hands.

What you can expect:

  • Friendly team of experts
  • Benefits seen as a form of income
  • No deposit needed
  • Apply with no impact on your credit score
  • All credit histories considered
  • Unparalleled support

Don’t be held back by benefits – your perfect car could be a few clicks away! Apply now with We Finance Any Car.

On Benefits? You can still finance a car

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Car finance on benefits – feel empowered with flexible and inclusive solutions

We have a number of car finance options available. Whether you are receiving benefits as your only source of income or in addition to other income types, we recognise that every circumstance is unique.

When committing to an agreement, you need to feel confident in your decision. Opting for a finance deal that is unachievable can lead to further financial difficulties and may even damage your credit score, so it’s important to get it right. That’s where we come in. Our team of experts will guide you through the entire process, from submitting your application to driving off in your new set of wheels.

Some of the most popular types of car finance and how they work for people on benefits:

Hire purchase

This is a popular type of car finance that enables you to become the legal owner of a car (once you have fulfilled the agreement). In this situation, you are required to make payments each month, until you have completed the loan term.

If you are on a type of benefit that is considered a valid source of income, this can be an accessible option. The structured repayment plan allows you to spread the cost of the car into smaller chunks, helping you manage your budget more effectively.

Something to think about: The amount of benefits you receive can have an impact on your maximum loan figure and potentially limit the selection of cars you can choose from.

Personal contract purchase

If you aren’t ready to commit to full ownership, personal contract purchase car finance could be the option for you. With PCP, you get more flexibility at the end of the loan term – with the option to return the car, purchase it, or start a new agreement.

Something to think about: This type of car finance tends to have stricter eligibility criteria and usually requires a higher creditworthiness level (your ability to repay the loan). If you are on benefits, this can make things a little more complicated. It’s crucial for you to demonstrate a level of financial stability, whether that’s by providing a clear budgeting plan or even proof of additional income.

Guarantor car finance

Being on benefits can be perceived as a higher risk factor and may raise alarm bells for some lenders. Adding a guarantor to your application adds an extra layer of security and can help to increase your chances of approval.

This is someone who agrees to take on the responsibility of your finance agreement if you default on the payments. Once you and the guarantor have completed the application together, the lender will then assess both financial situations and come to a decision. 

If successful, this could mean that you are eligible for more favourable loan terms, as well as being able to consider higher-quality or newer cars.

Something to think about: You will need to pick a trustworthy guarantor who is financially stable and has a good credit history. Before submitting an application, we would always recommend having a discussion with your guarantor about the responsibilities involved – you both need to be 100% onboard. 

Submit an application today to discover the right solution for you.

Many people believe that being on benefits means you can’t be approved for car finance. This is a common misconception and we’re here to set the record straight!

Although it can make things a little trickier, benefits shouldn’t be a barrier to buying a car. There are a whole host of reasons for needing extra financial support, ranging from disability to low-income and childcare responsibilities. 

If you’re receiving benefits, you’re certainly not alone – statistics show that 23 million people were claiming some form of benefits in 2021 (just under half of the country’s population). 

It’s time to make car finance an accessible option.

In most cases, lenders will simply use regular benefits payments on bank statements as proof of benefit/income.

Yes! If you’re yet to apply for a car finance deal and are on Universal Credit, or you’ve previously experienced rejection from traditional lenders, then look no further.

As one of the most common benefits provided by the UK government, helping individuals and families cover the cost of living, many specialist lenders consider Universal Credit a valid source of income. They recognise that being on benefits is not always a reflection of your ability to afford a car and can offer a tailored deal that fits your financial situation. 

This is a function of your credit score, the price of the vehicle, your income and expenses (including income from benefits and pensions) and the term over which the car finance is to be repaid. The best way to find this out is to apply using our soft search facility (designed not to hurt your credit score). From there we can get an approval with the best terms for you and go from there. Simply apply here.

When reviewing your application, lenders will take a range of factors into account:

  • Affordability: Be realistic when choosing your new car – if you opt for something that’s beyond your budget, it may affect your ability to secure a finance deal. Lenders need to be confident that you can comfortably manage the loan repayments and will assess your income, as well as any expenses. Use our free finance calculator to review your budget and payment plan options.
  • Creditworthiness: Although your eligibility for car finance doesn’t solely rely on your credit rating, it is a big factor. If you have a history of late payments or defaults, it may raise alarm bells for the lender. A poor credit score may impact interest rates or result in stricter loan terms. 
  • Employment stability: Considerations such as the length of time you’ve been on benefits, your previous employment history, and any future employment opportunities. This can help lenders assess the stability of your overall finances and whether you will be able to meet the monthly payments. 
  • Residential stability: Your residential stability, including the amount of time you’ve been at your current address, can give lenders an insight into your reliability as an applicant. If you are in a stable living situation, it demonstrates your commitment to meeting financial obligations and can help to improve your chances.


There are a few common benefit types that are considered a form of income for car finance applications. 

These can change from time to time, depending on the terms and conditions of the lender. It’s always best to check with your friendly account manager once you’ve submitted your application. 

  • Universal Credit
  • Working tax credits
  • Child tax credits
  • Disability Living Allowance (DLA)
  • Personal Independence Payment (PIP)
  • Employment and Support Allowance (ESA)
  • Carer’s allowance

If you are currently receiving one of the above benefits, or you’re unsure whether you qualify for a car loan, please get in touch with a member of our team. We will be able to advise you on the specific eligibility requirements and provide support based on your individual circumstances.

Yes, even if you have a bad credit score, it is still possible to purchase a car through finance. 

Your creditworthiness is determined by a few factors, such as your credit history and debt levels. Claiming benefits does not automatically give you bad credit. However, if you are struggling with bad credit, and you are on benefits, we can help. 

Having a bad credit score can make it harder to secure a finance deal from mainstream lenders. As a snapshot of your past credit behaviour and financial responsibility, lenders will use credit scores as a measure of risk. For all application assessments, regardless of the type of finance deal, this is a big factor. But don’t worry! At We Finance Any Car, we work with an extensive panel of specialist lenders, so you are more likely to secure a finance agreement through us.

Our finance solutions for bad credit applicants are tailored to you – whatever your financial situation, we will do our best to get you a favourable deal.


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About Us

If you are looking for car finance, you are in the right place!

We have years of experience in car finance, a very extensive lending panel & a team set up to get you the car you want at the best finance rate possible. If you have already found a car and just need the finance – great! If you need help finding a car then we are there for you as well – in fact, we have access to over 300,000 cars.

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