You may be able to get car finance with bad credit, but a lender can decline your application. There is no single credit score that every lender uses to make its decision.
Your credit history matters alongside what you can afford now. Before applying, check your records, work out a budget and understand the cost of borrowing.
Can I get car finance with bad credit?
Some lenders consider people with past payment problems. Others have stricter rules. The type, age and seriousness of any problems can affect the decision.
A missed payment is different from a default, county court judgment or bankruptcy. Lenders may treat each differently and also consider what has happened since.
Having a steady income does not mean an application will succeed. The lender must also assess whether repayments are affordable alongside your other commitments.
Ask about the lender's criteria before making a full application. Avoid sending repeated applications simply to see which one succeeds.
What do lenders check for car finance?
Lenders look at information from your application, credit records and other checks. What they request and how they assess it varies.
- Payment history: missed payments, defaults and other recorded credit problems.
- Income: how much you receive and whether it is sustainable.
- Spending: housing, household bills and other regular commitments.
- Existing debt: balances, repayments and use of available credit.
- The car: its age, value and whether it meets lending rules.
You may need bank statements or other evidence. If income changes each month, use a realistic figure rather than your strongest month.
See car finance when self-employed if your income comes from working for yourself.
Does bad credit make car finance cost more?
It can. A lender may offer a higher interest rate because it sees a greater risk of missed payments. It may also limit the amount or term available.
Read the actual quote carefully. Check the APR, deposit, monthly payments, fees and total amount payable. A headline rate may not be the rate offered to you.
A longer term may bring monthly payments down while increasing total interest. It can also leave you paying for an older car that needs more maintenance.
Choosing a less expensive car or borrowing less can reduce the financial commitment. Neither step promises a different lending decision.
Use estimates to set a borrowing limit. Leave money for insurance, fuel, servicing, tax and repairs before deciding what monthly payment fits.
How can I improve my chances before applying?
Start with the information a lender will see. These steps may help you prepare, but they do not promise an offer.
- Check your credit reports and ask for factual mistakes to be corrected.
- Keep your name, address and application details accurate and consistent.
- Register to vote at your current address if you are eligible.
- Keep up existing payments and contact creditors early if you cannot.
- Reduce outstanding borrowing where affordable, without missing essential bills.
- Choose a borrowing amount that leaves room in your budget.
Changes can take time to appear in credit records. Paying for a service that promises to remove accurate negative information is not a sound shortcut.
Use MoneyHelper's credit record guidance to understand practical steps.
Will applying affect my credit record?
Ask what searches will take place before proceeding. Do not assume a quote form uses a particular type of search.
A full application can involve a hard search. This leaves a record that other lenders can see and can affect your credit score.
Several hard searches close together can concern lenders. An eligibility result is not a lending decision, even where a service uses a soft search.
If an application is declined, pause and ask why before trying again. Check for errors and whether the requested amount fits your finances.
Is HP or PCP better with bad credit?
Neither is automatically the right choice. Availability depends on the lender's rules, your finances and the car. Some lenders may offer only certain agreement types.
Hire purchase (HP) leads to ownership after all required payments. Personal contract purchase (PCP) leaves an optional final payment if you want to own the car.
PCP's smaller monthly payments can make a car look more affordable. Include the final payment in your plan if you want to keep it.
Read HP vs PCP and personal loans for a car to understand ownership and payment differences.
Will a deposit help my application?
A deposit reduces the amount borrowed. This may reduce payments and interest, but the lender still needs to assess your application.
Deposit requirements vary by lender. Options without a deposit may exist, but bad credit can limit what is available.
Do not use money needed for rent, food or other essential bills. Borrowing elsewhere to fund a deposit adds another repayment for the lender to consider.
The no deposit car finance guide explains the cost questions to ask.
What happens if I miss car finance payments?
The car may be taken back if you do not keep up HP or PCP payments. Missed payments affect your credit record and can make future borrowing harder.
For eligible HP and PCP agreements, once a third of the total amount payable has been paid, the lender generally needs a court order to repossess without your consent.
This does not remove the debt or allow you to stop paying. Contact the lender as soon as you expect difficulty.
If existing debts already leave you short, seek help before taking on more credit. StepChange offers free debt advice.
Can I cancel or end the agreement early?
Bad credit does not remove your legal rights. Where the Consumer Credit Act 1974 withdrawal right applies, you have 14 days to withdraw from the credit agreement.
Check when that period starts. Withdrawing does not automatically cancel buying the car. You must repay the credit and accrued interest within 30 days of giving notice.
Covered agreements also have early settlement rights. Ask the lender for a written settlement figure before paying off the balance.
Eligible HP and PCP agreements allow voluntary termination. Liability is normally limited to half the total amount payable if you have taken reasonable care of the car.
You may need to make up a shortfall to that figure. Arrears or damage can leave more to pay. PCP's optional final payment counts towards the total.
What if the car is faulty?
With HP or PCP, the finance company is responsible for the car's quality under the Consumer Rights Act 2015. Report faults promptly and keep evidence.
Complain to the finance company first. If unresolved, the Financial Ombudsman Service may be able to help.
What happens when I request a quote?
Fill in the quote form. A car finance specialist then gets in touch, explains the options and gives any quote and any advice.
The lender decides any application and provides any finance. Before proceeding, check the full cost, the credit searches involved and whether the payments fit your budget.
Updated 7 November 2026
