Jan24 Archives - Page 6 of 15

Car Finance Declined: 5 Possible Causes

There’s nothing more disheartening than dreaming of a brand-new car, only to have your finance application declined. Before you feel too deflated, remember that it’s not necessarily the end of the road. There are various reasons why car finance applications can be turned down and understanding them can help improve your chances of success next time.

In this article, we’ll explore five possible reasons you’ve been refused car finance – from credit history to each lender’s criteria – and offer some expert tips on how to turn the tables.

1. Poor credit history

One of the most common reasons people are refused car finance is a poor credit history. Lenders rely on your credit score to assess your trustworthiness as a borrower. Credit scores are generated by credit reference agencies, which provide a credit report for car finance lenders.

Firstly, it’s important not to continually make multiple applications when you’ve been refused car finance. That’s because each hard search with a credit agency leaves a visible mark on your credit file. These can stack up and affect your credit score over time because they typically indicate previous rejections.

A history of late or missed payments on utility bills and finance repayments can drag down your credit score and make lenders cautious about approving your application. Other reasons for a bad credit score include a lack of credit history, common for younger customers, county court judgements and not being on the electoral roll.

To improve your chances, consider building a better borrowing history before submitting your next application. Joining the electoral register is a simple step to take, but you can also avoid missed payments and ensure you pay other finance agreements and bills on time.

2. High debt-to-income ratio

Mainstream lenders not only look at your credit score but also your debt-to-income ratio. This number measures the percentage of your monthly income that goes towards paying off debt. Many lenders use this to get a better idea of your current personal circumstances, rather than simply basing their decision on a low credit score or good credit score.

If you’ve been declined car finance, it may be that you’ve reached your credit limit. In other words, any more monthly payments would put you into financial difficulty. A responsible lender won’t knowingly approve your car finance application with that in mind. To lend responsibly, they need to ensure applicants meet their own criteria for affordability.

Multiple existing loans like credit card balances, a mortgage or other financial commitments can negatively affect your ability to take on additional auto finance debt. Reducing your existing debts or increasing what you earn can help lower this ratio and make your application more appealing to lenders.

3. Unrealistic expectations

Lenders want to ensure you can comfortably manage your leasing or car finance payments. If your income doesn’t meet their affordability criteria, your application may be declined.

For example, it’s unlikely you’ll be approved for a £60,000 car loan on a £30,000 salary. Car finance deals make it easier to afford a better car compared to paying money up-front, but there are still limits to what you can afford in terms of repayments.

Before applying for car finance, assess your budget and factor in all monthly expenses to determine how much you can realistically afford. Yes, that brand new Audi SQ5 Sportback set to launch in 2024 is a dream. But if it doesn’t match your borrowing power there’s a high chance you’ll be refused car finance.

4. Lack of employment stability

Stable employment is one of the most important things lenders consider when assessing car finance applications. If you’ve recently changed jobs, have gaps in your employment history or work on a temporary or freelance (self-employed) basis, lenders may view it as a risk factor and you could be refused car finance as a result.

Self-employed people usually struggle with their employment status as it’s hard to guarantee how much you’ll earn. This can be very frustrating, especially if you earn a good amount through self-employment but simply don’t meet the lender’s criteria. In this instance, it’s well worth comparing deals with a few finance companies. There are also specialist lenders for self-employed people.

Having a consistent job and regular income can increase your chances of being approved for car finance. Checking your employment status is just another form of affordability – lenders think that you’re more likely to keep up with loan repayments if you have a steady amount of money coming in each month.

5. Applying with multiple lenders

Another reason you may be refused car finance is having too many applications on your credit file. There are a few reasons for this, but above all else, it’s another factor that leads to a bad credit score (also known as a bad credit rating).

When you apply for car finance, most mainstream lenders carry out a ‘hard’ credit check as part of the screening process. As we mentioned earlier, multiple hard searches in a short period can negatively affect your credit score and make lenders wary. If you’re refused for car finance by one lender and immediately apply with another, you may be seen as a high-risk borrower.

This is why it’s important to be strategic when it comes to car finance. Working with a broker like My Car Credit can help you establish your borrowing power before sending through an application. Instead of a hard search, we’ll take a ‘soft’ search that doesn’t leave a mark on your credit score. It’s good practice to check whether a lender will perform a hard or soft search to avoid unnecessary poor credit.

Tips to boost your application

Been refused car finance? Here are some expert tips to boost your chances and get your application over the finish line:

Choose the right lender

Different lenders have different approval criteria. Some specialise in car finance for poor credit and others focus on prime borrowers. Finding a lender that aligns with your credit profile will help reduce your chances of being declined car finance.

Save for a larger deposit

A larger upfront deposit can reduce the amount you need from finance agreements and make your application more attractive to a car finance company.

Secure a guarantor

If your credit history is a concern, asking a financially responsible guarantor to co-sign your car finance agreement can improve your approval chances.

Review your budget

Make sure your budget is realistic and that you can comfortably afford the monthly payments before applying for car finance.

Improve your credit score

A proactive approach to improving your credit file can open doors to better car finance options in the future.

Refused car finance? We’re here to help

We love a good challenge at My Car Credit, which is why we’re happy to work with applicants who have been declined in the past. Instead of giving up, we see rejections as an opportunity to assess your financial situation and address outstanding issues.

We’re not a standalone mainstream lender. Instead, we’re a car finance broker, helping people get car finance by working with a large panel of lenders. This makes it easier for for us to find suitable deals and get you approved for car finance, whether it’s hire purchase, personal contract purchase or leasing.

Give our free car finance calculator today!

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

Is It Hard to Get Car Finance?

Auto finance is a popular way to secure the keys to a new car but for many Brits it remains a mystery. If you’re wondering ‘is it hard to get car finance’, this guide is for you. We’ll cover everything you need to know about car finance, including how to ace the application process.

Understanding the car finance landscape

The first step is to understand your different options when it comes to car finance. In the UK, the most popular auto finance options are Personal Contract Purchase (PCP), Personal Contract Hire (PCH) and Hire Purchase (HP).

Overcoming poor credit

The next step is addressing the potential roadblocks that might make you think getting car finance is challenging. The most important is your personal credit history. Lenders typically use your credit score to assess your reliability as a borrower. A solid credit score helps support your application while a track record of late payments or defaults can raise red flags.

Is it hard to get car finance with poor credit? A less-than-ideal credit score can be a hurdle, but it doesn’t mean finance will definitely be declined. Many lenders are happy to work with applicants who have poor credit scores and offer options tailored to this scenario.

Options for success

Wondering how hard it is to get car finance with poor credit? Below, we’ll explore a few different options to boost your application and improve your chances of success.

Partner with a broker

Enlisting the help of a broker can be a great way to overcome issues like poor credit. The best brokers work with high street banks as well as independent lenders who are more flexible when it comes to applicants with poor credit. You may not enjoy the same best-in-class deals as applicants with excellent credit scores, but your chances of approval will be significantly higher.

Build your credit score

Taking steps to improve your credit score is another easy way to secure car finance.

Consider a guarantor

Another approach is to secure a guarantor, a co-signer who vouches for your ability to repay the loan. Sharing the responsibility can increase your chances of approval.

Increase your down payment

Increasing your initial deposit can make your application more appealing to lenders as it reduces the amount you need to finance and proves you have the capacity to save and budget.

Give your application the green light

At My Car Credit, we don’t see challenges as roadblocks. We see them as opportunities to assess and improve your financial situation. Our dedicated team will help build you a strong application, then expose it to a broad network of lenders to improve your chances of approval.

Is it hard to get car finance without a broker? While it’s definitely possible, help and support from the experts will make your experience a whole lot easier. If you’re ready to get started, give us a call at 01246 458 810 or email us at enquiries@mycarcredit.co.uk to find out more.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

PCP vs HP – What’s the Difference Between Them?

How to Refinance a PCP Balloon Payment

Advantages of Cars on PCP with No Deposit

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance credit score Jan24 poor credit

Leasing vs Finance: What’s the Difference and Which is Better?

Red sports car bought on finance driving down the road

Despite rising interest rates, borrowing remains the most popular way for Brits to secure the keys to a new car. Of the different borrowing options available, leasing and finance are two of the most utilised. While both avenues offer a route to your dream set of wheels, they come with unique pros and cons.

Wondering which is better for you? In this guide, we’ll break down both and learn more about lease vs finance car options. We’ll spotlight the differences between the two and offer expert tips designed to help you make an informed decision.

Leasing: an alternative to vehicle purchase

Often called Personal Contract Hire (PCH), car leasing is like a long-term rental arrangement. When leasing a car, you don’t own the vehicle outright. Instead you make monthly lease payments that entitle you to drive it. At the end of the lease contract, you hand the car back to the dealer and walk away. This easy and hassle-free approach to driving helps win over many motorists considering leasing vs finance.

The benefits of leasing a car

Low upfront costs: Leasing a car typically requires a lower initial deposit compared to financing a car. This makes a lease agreement an attractive choice if you’re keen to keep your upfront expenses down.

New car feel: With car leasing, you’re consistently driving a brand-new car. It’s like always having the latest smartphone model. If you’re the kind of motorist who values next-gen technology, you’ll love this benefit of lease deals.

Worry-free maintenance: Maintenance can be a big deciding factor in the leasing and financing car debate. A lease car will often be covered by the manufacturer’s warranty for the duration of your agreement. This means you won’t incur any out-of-pocket expenses when it comes to repairs and maintenance.

Embrace change: Leasing offers the flexibility to switch to a new car every few years. If you enjoy variety, this could be your ticket to trying out different vehicles.

The downsides of car leasing

No ownership: What’s the difference between a lease car and finance when it comes to ownership? At the end of a lease deal, you don’t own the car. It’s similar to handing back the keys to a rental apartment – you enjoyed it, but it was never truly yours.

Mileage limits: Mileage is important in the leasing vs finance debate. Leases come with more stringent mileage restrictions to protect the lender from losing money on their investment. Exceeding your agreed annual mileage limit during the lease term can result in additional charges, so it’s important to keep track of your road trips. If you plan to use your car for regular long journeys, leasing may not be right for you.

Wear and tear: As well as mileage limits, you’re also restricted when it comes to wear and tear. While normal use is okay, you must return the lease car in good condition to avoid extra costs for wear and tear at the end of the lease period.

Finance: a ticket to ownership

Car finance, also known as Hire Purchase (HP) or Personal Contract Purchase (PCP), is like a mortgage for your vehicle. You make monthly payments and once the term is over and all payments are complete, you own the car outright. It’s hugely popular in the UK, with the Finance & Leasing Association estimating around 82% of new cars in Britain are funded by PCP agreements.

Here are some of the most popular types of car finance:

Personal contract purchase

A personal contract purchase (PCP) is a car finance agreement that breaks down the cost of a new car into fixed monthly payments. You’ll make a larger initial payment as a deposit, then pay affordable monthly costs including interest payments while you use the car. At the end of the leasing agreement, you’ll have the option to pay a final balloon payment, which is a lump sum to own the car outright.

Alternatively, you can change cars or end the agreement altogether. If you move onto your next car, you’ll start a new finance agreement for an agreed period.

Hire purchase

Hire purchase is the simplest of the car finance agreements as your monthly repayments cover the entire cost of buying a car plus interest payments. With hire purchase, there’s no optional balloon payment, so you will always own the car outright once all monthly repayments have been made.

The benefits of financing

Ultimate ownership: Financing a car means it’s yours at the end of the term when the final payment is made. This is the main difference of leasing and financing. You take legal ownership of the car and have full control over mileage, wear and tear and resale options. When considering lease vs finance car benefits, ownership is a big factor.

No mileage limits: Once your finance agreement is over, you can drive your new car as much as you like, without worrying about an agreed annual mileage limit or excess charges.

The investment angle: While the initial upfront cost for financing a car might be higher than car leasing, you’re building equity with every payment. It’s like gradually acquiring a valuable asset in the most affordable way.

Freedom to customise: The end goal of ownership for your next vehicle gives you the freedom to modify and personalise your car without penalisation.

The downsides of financing

Higher monthly payments: Monthly payment size is a key difference between lease and finance agreements for your next car. Instalments for financing tend to be higher than leasing, as the final goal is ownership.

Depreciation impact: As the eventual owner, you bear the full brunt of the car’s depreciation.

Maintenance costs: Unlike leasing, maintenance and repairs aren’t normally covered. Instead, you’re responsible for keeping your vehicle in tiptop shape alongside your monthly payments.

Lease vs car finance: which is better for you?

Now that we’ve dissected the differences between a lease vs finance car, it’s time to determine which option aligns with your needs and preferences. Here are some factors to consider:

Options to own the car outright

Do you want to eventually own your vehicle, or would you prefer to regularly upgrade to a brand new car? If ownership is a must, financing is your route. If you’d rather upgrade to a showroom-worthy car every few years, leasing a car could be a better option.

Monthly payments

Consider your monthly budget, capital and payment capabilities when weighing up leasing and financing. Leasing often offers lower monthly payments, which can be appealing if you’re aiming to keep costs down.

Mileage habits

How much do you drive? If you’re a frequent road-tripper, finance might be the better choice as you’re less likely to be hit with excess mileage charges at the end of your agreed period which are notoriously stringent with car leasing.

Customisation

Are you someone who enjoys customising their vehicle? Ownership via car financing gives you the freedom to make your car uniquely yours.

Long-term plans

Think about your long-term plans when considering the difference between lease and finance cars. Are you comfortable with committing to a car for several years, or do you prefer the flexibility of upgrading every few years with leasing?

Maintenance responsibilities

Consider your comfort level when it comes to handling maintenance and repairs. Car leasing often includes a warranty that covers maintenance, while financing means you’re responsible for upkeep.

Financial stability

Assess your financial stability before making a commitment to either option. Car leasing usually requires less upfront cash, making it an attractive option if you’re looking to preserve liquid assets.

The final word on leasing vs finance

Ultimately, the choice between a lease vs finance car hinges on your individual circumstances and preferences. This includes variables like budget, lifestyle and future plans. There’s no one-size-fits-all answer, and what’s best for one person might not be the ideal choice for another.

Leasing a car might be the best option if you like a new car every few years, while financing a car allows you to actually buy a car. The best way to decide is to carefully consider both options and ensure you understand the pros and cons of each. Don’t forget to factor in the different methods of financing a car, such as hire purchase or PCP with a balloon payment.

Want to know more about you’re the difference between lease and finance? Call us on 01246 458 810 to chat to an auto finance expert or email us at enquiries@mycarcredit.co.uk.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How Do Car Finance Calculators Work?

How Much Does Car Finance Cost? Check Now!

How Do Balloon Payments Work?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car ownership finance hp Jan24 leasing pch PCP

What is a Good APR for Car Finance in the UK?

Whether you’re in the market for a budget-friendly Kia Sportage or an all-electric Tesla Model Y, Annual Percentage Rate (APR) is one of the most important metrics to consider when buying a car in the UK. So, what’s a good APR for car finance and why does it matter for British motorists?

It doesn’t matter what kind of car you’re looking to purchase on finance – brand new or used, the annual percentage rate (APR) of a car is one of the most important things to consider.

The APR on car finance represents the total cost of borrowing per year. That makes it a useful metric to compare different car finance agreements for affordability.

Still confused? My Car Credit likes to make things as simple as possible when it comes to car finance. Consider this your guide to all things APR – we’ll help you understand what makes a good APR for car finance in the UK and how to achieve it.

What does APR mean in car finance?

The annual percentage rate (APR) is the total cost of borrowing for car finance per year. It’s inclusive of interest and lender fees, and is expressed as an annual percentage. The lower the APR, the less you’ll pay over the lifetime of a car finance agreement.

APR differs from the interest rate of car finance. The interest rate on a car finance agreement will be included in the APR as well as other lender fees and charges. That’s why the APR reflects the total cost of borrowing.

APR is one of the best ways of comparing car finance deals. If you’re looking for the most affordable agreements for your circumstances, you can use the advertised APRs of different lenders as a metric to compare different deals on a like-for-like basis. The higher the rate, the more you’ll pay back over the term of the agreement.

How APR works and an example

Lenders calculate APR by taking the total loan amount, adding any additional fees (such as processing charges), calculating the total interest payable over the loan term and dividing that total sum by the loan amount. The result will be expressed as a percentage, which represents the APR.

Remember, the lower the APR, the lower the overall loan cost. Alternatively, higher APRs mean you’ll pay more over the loan term.

Here’s an example of APR.

If you’re looking for a £10,000 loan over 5 years with a 6% APR, you can expect to pay approximately:

Monthly repayments: £193.33

Total repayment: £11,599.68

Total cost of borrowing: £1,599.68

Alternatively, if you’re borrowing the same amount over the same time with a 12% APR, you can expect to pay approximately:

Monthly repayments: £222.44

Total repayment: £13,346.67

Total cost of borrowing: £3,346.67

Remember, these figures are approximate. However, they’re a clear indication of how a lower APR can significantly reduce your overall payments.

Differences between representative APR and personal APR

A representative APR is the rate advertised by lenders that’s applicable to at least 51% of successful applicants.

In essence, it means that nearly half of customers will be given a higher rate than the representative APR.

An exact or personal APR is the rate tailored to an individual’s financial circumstances. These include credit score, loan term and the lender’s own criteria. The healthier your credit score, the lower your personal APR.

What is considered a good APR for car finance in the UK?

APR varies between lenders, but a good APR for car finance in the UK is around 10.9% for a borrower with an excellent credit score.

My Car Credit offers rates from 9.9% APR and a representative rate of 10.9%. You can establish what kind of rate you might benefit from by using our car finance calculator.

Factors that influence an APR include a lender’s personal credit score, loan terms, loan amounts, type of finance, and lenders themselves.

A ‘good’ APR will therefore depend on your personal circumstances.

What’s an average APR for a first-time car buyer?

First-time car buyers often have limited credit history, which can mean they face higher APRs.

Generally, APR rates for first-time buyers range based on varying credit scores from 9% to 20%.

You can check our tips below to learn how to maximise your chances of securing a good APR.

How new and used cars affect APR

New cars often qualify for lower APRs. This is because of higher residual values, reduced lender risk and occasional manufacturer incentives.

Alternatively, used cars typically come with slightly higher APRs. This higher rate reflects lender concerns over depreciation and higher risk.

Factors that influence APR for car finance

Credit score

Your personal credit score can have a significant impact on the APR you’re offered, as lenders use it to assess your credibility as a borrower. Higher credit scores benefit from lower APR, and vice versa.

Loan amount

Generally, larger loans come with lower APRs – but exceptions do apply depending on the lender.

Loan term

Shorter loans generally have lower APRs. Longer terms increase risk for lenders and therefore have higher APRs.

Deposit amount

A larger deposit can reduce your APR – so consider a large down payment.

Lender practices

Different lenders assess and offer different rates, so it’s worth shopping around before committing to a deal.

How to get a good APR for car finance

The APR of car finance must be disclosed prior to the signing of any paperwork.

As such, comparing different lenders’ APRs is a good way of securing the best possible deal for your circumstances.

There are also steps you can take to increase your likelihood of securing a competitive APR:

Check your credit score

The higher your credit score, the more likely you are to benefit from a lower APR. There are plenty of ways to improve your credit score, including registering to vote, paying your bills on time and avoiding too many simultaneous hard credit checks.

Compare lenders

Different lenders offer different rates, and you may even be able to negotiate to lower the APR.

With a broker like My Car Credit on your side, you can benefit from the expertise and knowledge of our team to find the best APR for your circumstances. Our large panel of lenders means we may be able to reduce APR compared to other car finance companies. Use our car finance calculator to establish the kind of APR you could benefit from.

Adjust loan terms

Shorter repayment terms will have lower APRs (although you will end up paying more on your monthly repayments). You can help to reduce these repayments with a higher initial deposit.

Choose the right agreement for you

The kind of car finance you choose can impact your APR. For example, PCP finance generally has lower APRs than HP finance.

Unlocking competitive APRs with My Car Credit

At My Car Credit, we are committed to helping customers find the best rates for their personal circumstances.

As part of the UK’s largest motor finance broker, we’ve established relationships with a wide panel of trusted lenders nationwide. This improves your chances of being accepted for car finance at an APR rate you’re happy with. We may even be able to secure you a lower APR than you’ve been quoted elsewhere.

We can also help drivers with poor credit scores to secure car finance.

Use our form and apply now to get a no-obligation quote in minutes. Alternatively, get in contact with our friendly team to benefit from their professional advice.

FAQs about APR and car finance

Does a low APR guarantee the cheapest deal?

The lower the APR, the less you’ll pay in interest and other charges. Some car finance deals are advertised as 0% APR. You should investigate whether these rates are best for you, as you’ll face higher monthly repayments, and they can be difficult to secure.

What APR can I expect with bad credit?

Individuals with higher credit scores will benefit from better APRs. However, it’s more than possible to secure a rate that works for you even if your credit profile is less than healthy. My Car Credit offers poor credit car finance for individuals of all circumstances.

Can I negotiate a lower APR on car finance?

It’s possible to negotiate a lower APR on car finance, but this will depend on the lender and their criteria. Having a team like My Car Credit on your side can help you find the right deal for your circumstances and may be able to help you find lower overall rates.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How to Improve Your Credit Score for Car Financing

What Does ‘Finance’ Mean When Buying a Car?

Car Loan Early Repayment – Is It Worth It?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

apr apr calculator car finance calculator car financing credit rating credit score Jan24

Car Loan APR Explained

Annual Percentage Rate (APR) is one of the most important factors to consider when calculating the total cost of your car loan. Whether you’re shopping for a peppy Volkswagen Golf, an eco-friendly Mini Electric or a luxurious Audi A1, understanding the intricacies of car loan APR is critical when it comes to making smart and informed financial decisions.

In this comprehensive guide, we’ll take a deep dive into APR, explain how it affects your car loan repayments, and provide handy tips on how to unlock the best deals.

Understanding car loan APR

APR stands for Annual Percentage Rate and reflects the total borrowing costs associated with the loan. It includes the interest rate you’ll pay on cash borrowed, as well as additional fees and charges imposed by the lender. The goal is to provide borrowers with a clear idea of the total cost of the loan, including fees. This transparency makes car loan APR one of the most important metrics to consider when crunching your numbers and calculating how much to borrow.

Is APR the same as interest rate?

While car loan APR does factor in interest charged on the cash amount borrowed, it also includes other fees and charges associated with the loan. This makes it a different and more comprehensive metric than a traditional cash interest rate.

Why is APR important?

Car loan APR is one of the best ways to compare loan offers quickly, easily and accurately from different lenders. As mentioned above, APR not only factors in the cash interest rate but includes additional fees and charges. It offers borrowers a glance at the total cost of the loan, expressed using an easy-to-interpret percentage rate. A low APR means you’ll pay less in interest and additional fees over the lifetime of the loan. A high APR means you’ll pay more.

What is a typical APR rate?

In the UK, a typical car loan APR rate offered by a reputable lender should sit at around 10.9% for an applicant with excellent credit. It’s important to understand that most reputable brokers and lenders use representative APR as an example. The actual percentage will vary depending on the applicant. We’ll cover representative APR in more detail below.

Fixed vs variable APR

Most auto loans in the UK come with fixed APR. This means the APR remains constant for the lifetime of the loan and monthly payments stay the same. For borrowers, this provides stability and makes it easy to budget and plan ahead. Car loans with variable APR are less common and can be difficult to manage.

Factors that can influence car loan APR

APR can vary significantly depending on the applicant. Here are a few factors that can influence what APR you’re eligible for:

Personal credit score

Your personal credit score can have a big impact on what car loan APR you are offered. Lenders use your score to assess your credibility as a borrower and calculate risk. Borrowers with high credit scores are generally rewarded with lower APR, and vice versa.

Preferred loan term

The total length of your car loan can affect your APR. Lenders typically offer lower APR for shorter loan terms. Longer terms can result in higher overall APR, though monthly payments are lower which appeals to many borrowers.

Loan amount

The total amount borrowed is another factor that can influence APR. To lower your car loan APR, consider putting together as much cash as possible for your down payment.

What is representative APR?

When researching car loans, you’ll see the term representative APR used by brokers and lenders. This is the rate that at least 51% of customers will receive. Of course, some customers will enjoy lower rates while others will receive higher rates.

Representative APR takes this fluctuation into account and offers borrowers a general idea of what to expect. Ultimately, it’s a transparent way to compare rates offered by different brokers or lenders. The bottom line? Use representative APR as a guide, not a guarantee.

How do I find out the exact APR of a car loan?

You’ll need to continue with your application to get an exact car loan APR quote. Also called a ‘real’ or ‘personal’ rate, the figure is tailored to match your unique credit profile, financial history and personal circumstances.

Ideally, brokers should be able to calculate an exact car loan APR using a soft search. This type of search doesn’t leave a permanent mark on your financial history and won’t affect your credit score or future applications.

Tips for lowering your APR

APR can have a big impact on the total cost of your car loan. So, it makes sense to be proactive when it comes to lowering your APR. Here are some strategies to help you secure the best rates:

Boost your credit score

From paying off outstanding debts to registering on the electoral role, there are a few quick and easy ways to boost your credit score.

Increase your down payment

A larger down payment can reduce the amount you need to borrow, which can help bring down your car loan APR.

Choose a shorter repayment term

While it can be tempting to stretch out your loan for as long as possible to bring down your monthly payments, opting for a shorter repayment term typically reduces APR. In the long run, you’ll pay less.

Score the best APR with My Car Credit

One of the best ways to secure a good car loan APR is to work with an experienced broker. At My Car Credit, we specialise in helping Brits secure finance on all kinds of cars, from zippy Ford Fiestas to adventure-ready Range Rovers. Whatever your budget, financial history or credit score, we can help you unlock the best possible APR from trusted lenders.

Use our handy car finance calculator to get the ball rolling, or get in touch with a friendly member of the My Car Credit team today to find out more.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How to Improve Your Credit Score for Car Financing

What Does ‘Finance’ Mean When Buying a Car?

Car Loan Early Repayment – Is It Worth It?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

apr apr calculator car finance calculator car financing credit rating credit score Jan24

8 Benefits of an Auto Loan Payment Calculator

From commuting to work to visiting friends and family on weekends, Brits across the country rely on cars to get them from A to B. Up there with buying a house, cars are a major purchase, so it makes sense to arm yourself with as much knowledge as possible when committing to a sale. This is where an auto loan payment calculator steps up. Fast, simple and easy to use, these handy tools make it easy to crunch your numbers when shopping for a new car.

In this article, we’ll take a closer look at the benefits of using an auto loan payment calculator and why every new car search should start with this simple step.

The popularity of auto finance in the UK

Before we get started, let’s take a moment to spotlight the popularity of auto finance in the UK. In 2022, Finance & Leasing Association (FLA) members provided more than £50 billion to fund the purchase of cars in the UK. Why is auto finance such a popular choice for Brits? Here are some of the benefits:

Affordability

The option to make manageable monthly installments instead of a large lump sum is one of the key benefits of auto finance. Many Brits don’t have the funds to purchase a new car outright but can easily commit to monthly payments. This model allows Brits to get behind the wheel of cars that may otherwise be out of their budget.

Flexibility

From Personal Contract Purchase (PCP) to Hire Purchase (HP), there’s plenty of flexibility when it comes to auto finance. There’s no need to adopt a one-size-fits-all approach. Instead, borrowers are free to choose contract and payment terms that match their unique needs.

Regular vehicle upgrades

Unlike owning a car outright, auto finance allows motorists to upgrade to a newer vehicle more often, typically every two to three years. This makes auto finance an appealing option for motorists who love to have access to the latest makes, models and cutting-edge technology.

Zero maintenance

Most auto finance plans include comprehensive maintenance packages, which eliminates some of the biggest costs associated with car ownership. This peace of mind is a huge draw for many motorists.

Why use an auto loan payment calculator?

Crunching your numbers doesn’t have to be a headache. Here are the benefits of an online calculator:

1. Finetune your budget

Cars are one of the biggest purchases made by Brits, so it makes sense to finetune your budget before you commit. Auto loan payment calculators make it easy to punch in your numbers and generate instant data. Simply input information like the loan amount, preferred repayment term and personal credit rating to generate an instant quote estimate.

When you’re ready to proceed with your application, more information like your income, financial history, job status and personal circumstances is used to generate a more accurate quote.

2. Compare repayment terms

The total cost of your car loan can vary significantly depending on your chosen repayment terms. Auto loan calculators make it easy to compare different repayment terms and choose a timeframe that fits your budget. For example, the monthly cost of a £7,500 loan with a repayment term of three years is around £243. In comparison, the monthly cost with a repayment term of five years is around £160.

3. No impact on your credit score*

Using an auto loan payment calculator allows you to learn more about your budget and potential borrowing power, without affecting your credit score. Instead of hard searches that leave a footprint on your credit history and can raise red flags for potential lenders, an auto loan calculator gives you the freedom to explore your options with zero repercussions.

4. Transparent cost analysis

Auto loan payment calculators break down the cost of financing and make it simple and easy to understand. You’ll get an instant idea of the principal amount borrowed vs how much you will pay in interest over the lifetime of the loan. This amount is determined based on the average Annual Percentage Rate (APR) secured by borrowers. This transparency helps British borrowers make smart and well-informed decisions when it comes to auto loans. It’s a philosophy that all brokers authorised and regulated by the Financial Conduct Authority (FCA) should adhere to.

5. Avoiding overcommitting

Calculating monthly payments in advance helps borrowers take out realistic and manageable loans. This proactive approach to auto finance helps prevent overcommitting and avoid financial stress down the line.

6. Borrow from trusted lenders

The best auto loan payment calculators are designed to connect borrowers with trusted lenders. For example, at My Car Credit we work with Evolution Funding Limited to match your application with a large panel of auto finance lenders.

7. Find the best match for your needs

Auto loan payment calculators don’t just match you with lenders. The best tools use specialised technology and algorithms to select the best products for your needs. This not only improves your chances of acceptance but unlocks the best possible rates.

8. Free to use and obligation free

Auto loan payment calculators are completely free to use. There are zero obligations to commit to a loan or even finalise an application. This makes car finance payment calculators a great option for both serious buyers as well as motorists who are in the very early stages of researching loans.

Crunch your numbers today with My Car Credit

Whether you’re purchasing your first car or looking to upgrade an existing vehicle, there are no downsides to using an auto loan payment calculator. Fast, easy and transparent, the auto loan payment calculator from My Car Credit is designed to streamline the finance process. It not only helps you budget, but also gives you a clear and accurate look at the total cost of your loan. It’s this transparency that makes auto loan payment calculators such a valuable tool for motorists looking to make informed and financially responsible decisions.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How to Improve Your Credit Score for Car Financing

What Does ‘Finance’ Mean When Buying a Car?

Car Loan Early Repayment – Is It Worth It?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

apr calculator car finance calculator car financing credit rating credit score Jan24 repayments

Car Finance with Fair Credit: What You Need to Know

While some Brits enjoy a glowing credit score, others aren’t so fortunate. Credit scores can slip for all kinds of reasons, from missed payments on credit cards to lack of financial history. Wondering if you’re eligible for car finance with fair credit? This article is for you. Read on to find out more about car finance with fair credit and what you need to know before finalising an application.

What is considered “fair” credit?

The first step is to understand exactly what “fair” credit means. UK lenders use three major organisations to source credit scores – Experian, Equifax and TransUnion. Each uses a different system to determine credit scores. Here’s a quick overview of what’s considered “fair” by each:

Experian – 721 – 880

Equifax – 380 – 419

TransUnion – 566 – 603

Fair is preceded by rankings of “good” and “excellent”. At the lower end of the scale is “poor”, which is anything below the lowest numbers listed above.

Why credit scores matter

Credit scores are one of the most useful ways for lenders to evaluate the financial history of potential borrowers and assess overall risk. Experian, Equifax and TransUnion use information like your direct debit history to assess your borrowing patterns and assign an individual credit score. They’ll also look at hiccups like missed payments and multiple credit card applications.

The higher your score, the less risky you’re considered. Applicants with strong credit scores enjoy a suite of benefits, including higher credit limits, lower interest rates and an increased chance of success. However, a lacklustre credit score doesn’t necessarily rule out car finance. You still have options, which is why it’s important to connect with experts who specialise in securing car finance with fair credit.

Can I get car finance with fair credit?

Fair credit doesn’t mean you have to rule out car finance. With the right broker and a strong application, you can still secure auto finance with a less-than-perfect credit score.

What to expect when applying for car finance with fair credit

Applying for car finance with fair credit isn’t always as straightforward as applying with an excellent score but it is possible. Here’s a quick overview of what to expect and consider throughout the process:

Stay realistic

Lenders are far more likely to approve your application if your expectations are realistic. For example, an affordable model like a Hyundai i10 is a much better choice than a luxury car like Land Rover. Similarly, considering buying used instead of new can be a great way to save money and win over lenders.

Be proactive about boosting your score

You can’t go back in time and make that missed credit card payment. But you can boost your credit score by doing things like joining the electoral role.

Apply for car finance with fair credit today

Wondering if you’re eligible for car finance fair credit? Give My Car Credit a call today to discuss how we can help you secure car finance with fair credit, or a lower score.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How to Improve Your Credit Score for Car Financing

What Does ‘Finance’ Mean When Buying a Car?

Car Loan Early Repayment – Is It Worth It?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car financing credit rating credit score fair credit Jan24 repayments

Is Car Finance Good for my Credit Rating?

As with any financial loan, if your credit rating is good, lenders will consider you as a more eligible candidate for a favourable agreement. But is car finance good for your credit rating? We break it down below.

Does car finance impact your credit rating?

If you apply for car finance with My Car Credit, we’ll perform a car finance eligibility checker before advancing your application. This is a soft search of your credit score, meaning that it won’t impact your overall rating. It allows us to see your financial history without leaving any mark on your credit file.

If we decide that you’re a viable candidate for car finance, we’ll advance your application. At this point, our credit check will be hard, meaning that lenders will have access to your details and your rating will take a hit.

Is car finance good for your credit rating?

There are two main ways that car finance can improve your credit rating.

It’s also worth being aware that when you first apply for car finance and undergo a hard credit check, your overall score may dip because you’ve taken on a new loan.

Making timely repayments

The most important factor to a credit score is payment history. As such, if you make all of your monthly repayments on time and in full, this will build up your credit rating over time.

Diversifying your credit mix

A credit mix refers to the type of loans in your credit file. Having a diversified credit mix can improve your credit score, because it indicates that you can handle different types of loan.

Car finance counts as instalment credit, whereas a credit card is revolving credit. Adding car finance to your credit file diversifies it, which lenders look on favourably.

Can car finance damage your credit rating?

Car finance can negatively impact your credit rating if you don’t make your monthly repayment schedule. If you don’t make your instalment in full, or if you miss it entirely, this can negatively impact your credit score.

In these instances, you’ll be given a short period in which you can make the loan up. If you fail to make this payment, your ‘delinquent’ loan will be reported by the lender to major credit bureaus. This will negatively impact your credit rating.

If you miss several payments, lenders will declare your loan in default. The account will be passed over to debt collectors and your car may be repossessed. All of these negatively impact your credit score.

Find out more about car finance and credit ratings

To find out more about the kind of car finance we offer, as well as how it could impact your credit rating, contact My Car Credit on enquiries@mycarcredit.co.uk.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How to Improve Your Credit Score for Car Financing

What Does ‘Finance’ Mean When Buying a Car?

Car Loan Early Repayment – Is It Worth It?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car financing credit rating credit score Jan24 repayments

Why Was I Denied a Car Loan with Good Credit?

A good credit score can feel like a gold star on your financial history report. But unfortunately, a good credit score doesn’t guarantee approval when it comes to car loan applications. If you’ve been denied a car loan with good credit, this article is for you.

Below, we go into more detail about why a good credit score isn’t the be-all-and-end-all for car loan applications. We also take a look at how to overcome the hurdle, and what you can do to increase your chances of securing finance with a trusted lender.

What is a credit score?

Before we start, it’s important to define what a credit score is and why it matters. Basically, a credit score measures the overall health of your financial situation. A high score presents you as a reliable and trustworthy borrower, while a low score indicates a higher level of risk and an increased chance of defaulting on your loan. The higher your score, the more appealing you are to lenders.

Scorecards are used to calculate your credit score and create an overall picture of your borrowing behaviour. Information like your credit card repayment history and previous credit applications, as well as factors like your electoral roll status and address history, can affect your credit score. That said, your credit score isn’t the only factor considered by lenders when assessing car loan applications. This means you may be denied a car loan with good credit.

Good vs poor credit history with Equifax, Experian and TransUnion

In the UK, three major platforms are used to calculate credit scores – Equifax, Experian and TransUnion. All use a different number system, so don’t worry if your credit score varies between platforms.

Equifax: 0 – 1000
Experian: 0 – 999
TransUnion: 0 – 710

Experian classes 881-960 as good, while TransUnion’s threshold is 604-627 and Equifax goes as low as 420-465. As you can see, a good credit rating with one credit agency doesn’t mean you’re always classed as low risk. It depends which agency is used by each lender.

What doesn’t affect a credit score?

Credit scores are used to assess your financial history and give lenders an idea of your reliability when borrowing money. They’re not designed to reflect your overall wealth or purchasing power. The following criteria aren’t considered when calculating your credit score, however they may help explain why you were denied a car loan with good credit.

Student loans
Savings account balances
Employment history
Parking tickets or driving offences
Criminal record
Medical record

Reasons why you may have been denied a car loan with good credit

If you’ve been denied a car loan with good credit, here are some common reasons to consider. They don’t affect your credit score directly, but they can have an impact on the final decision of the lender.

Financial links

It’s important to understand that you’re not necessarily the only person assessed when applying for car loans. Financial connections to irresponsible borrowers, such as partners, family members or flatmates, can have an impact on your success rate and may help explain why you’ve been denied a car loan with good credit.

For example, if your legal partner has a lacklustre borrowing history and a poor credit score, this can impact your chances of a successful application. Even if you’re no longer together, they’re still considered a financial risk. Similarly, if you once shared utility bills with an irresponsible ex-flatmate, their borrowing behaviour can have an impact on your car loan application.

These types of financial links won’t affect your personal credit score, but they may be considered by lenders when assessing applications and calculating the overall risk factor. Lenders may check the credit reports of these individuals and use data to make a final decision on whether to approve or deny your application.

Check the Financial Associations section in your Credit Report to find out if you have any links. Depending on whether the connection is still active, it may be possible to submit a disassociation request and remove the person from your Financial Associations list.

Employment status and salary

The ability to repay your loan is a major factor considered by lenders. They won’t hesitate to follow up on employment and salary information stated in your application, and if the numbers don’t match up, your loan may be declined. This means that even with a stellar borrowing history, you may be denied a car loan with good credit if your employment status and income can’t be verified.

Another issue in this respect comes when you’re self-employed. While it’s great to work for yourself, this can negatively impact your ability to get car finance because it’s less secure than income from an employed position. Working for yourself, your salary can fluctuate month to month and year to year, making it harder for finance companies to assess affordability – which brings us onto…

Affordability

One of the most important factors for any finance company is affordability. Lenders want to know whether you can afford the repayments based on your current circumstances. While your credit rating reflects your history with finance companies, it’s also important to consider your incomings and outgoings.

As well as your salary, they’ll look at existing financial commitments like mortgage payments, utility bills and personal loans. If you’re already in financial difficulty, regardless of your credit history, you could be refused car finance.

Inconsistency in applications

Lenders don’t just check your current application. They may also cross-reference it with previous applications. Inconsistencies can raise instant red flags and may explain why you’ve been denied a car loan with good credit. For example, an application that states a £100,000 salary preceded by an application that states a £30,000 salary may be flagged.

Existing debt

Current debt isn’t factored into your personal credit score. However, it may be considered by lenders when assessing car loan applications. Ultimately, they want to be sure you can repay the amount you borrow. For example, if you apply for a £50,000 car loan but have credit card debt of £10,000 and a home mortgage of £300,000, your application may be flagged as high risk. It doesn’t necessarily mean you’re ineligible for a car loan, but it is something to consider when investigating why you’ve been denied a car loan with good credit.

What to do if you’ve been refused car finance

At the end of the day, no application is guaranteed, regardless of how high your credit score is. Lenders will always scrutinise applications and consider a variety of criteria. It’s important to understand exactly what goes into the decision making process to maximise your chances of success.

Review your application

If you’ve been refused car finance, the simplest thing you can do is review your car finance application. Look for any inaccuracies such as your address, salary and other financial information. Many lenders may point these out to you to help you get car finance.

Apply for a cheaper deal

Another simple trick is to apply for a cheaper deal that suits your personal circumstances. You could find a cheaper car, which would mean lower monthly payments.

You can also check the different types of car finance available.

Pay off existing debt

If you have lots of existing credit agreements, you might want to consider paying some off before applying for car finance – if you have the means to do so, of course. This could reduce the risk for lenders, as you’ll be in a better position with fewer outgoings and only one lender (or a select few) to repay.

Denied a car loan with good credit? We can help!

Being denied a car loan with good credit is frustrating. The good news is, we’re here to help. At My Car Credit, we have access to one of the largest and most diverse lending panels in the UK. This helps us to match your application with a wide range of trusted lenders, instead of the usual high street banks.

My Car Credit is fronted by a dedicated team of experts who can help you understand more about car finance eligibility and get to the bottom of why you’ve been denied a car loan with good credit. It’s this commitment to success that helps our customers get behind the wheels of their dream cars faster.

To discover how My Car Credit can help you obtain the right car finance, check out our online calculator to crunch the numbers on financing your next car.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How to Improve Your Credit Score for Car Financing

What Does ‘Finance’ Mean When Buying a Car?

Car Loan Early Repayment – Is It Worth It?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car financing car loan credit score employment finance Jan24

How Long Does It Take To Get Car Finance Approved in the UK?

So, you’ve found your dream car, a suitable car finance deal, and you want to hit the road instantly. But how long does it take to get car finance approved in the UK?

How long does it take to get car finance approved?

The initial submission for car finance can take mere minutes. However, you’ll then need to wait for any initial quote to be approved.

The turnaround time for this will vary between car finance lenders. As a general guide, assume that you will wait at least 24 hours to hear if you’ve been accepted. That could even extend to 48 hours and longer, depending on the factors we detail below.

What factors impact how long it takes to get car finance?

Credit scores

Car finance providers will perform a hard credit check to assess your car finance affordability. These take a little longer to perform than any initial soft credit check, and will impact your overall credit score too.

It’s absolutely possible to secure car finance with a poor credit rating, but your application may be swifter with a higher score. Plus, you’ll be eligible for better terms.

Use free online tools like Experian to get a free credit score check and establish whether your report has any issues before applying for car finance. This will help to speed the application process along.

ID checks

Any car finance provider will need to perform an identity check. You’ll typically be asked to submit copies of your driver’s licence, which therefore needs to be valid – you’ll be instantly rejected if it isn’t.

As well as your driving licence, you’ll most likely need to provide a complete address history. Lenders will ask for the past three years of your address, and may ask for current proof of address too. You’ll also need proof of income, or evidence of profit for self-employed businesses, for many providers.

Having all the relevant documentation to hand can significantly speed up the car finance approval process. Ensure that you have the relevant ID, and that it’s all up-to-date before applying for car finance.

Time of day

If you’re after same-day approval for car finance, apply as early in the day as possible! Some lenders will only turn around same-day approval if you apply by a certain time, so it’s worth checking this.

Secure timely car finance with My Car Credit

Email us on enquiries@mycarcredit.co.uk to get the ball rolling with your car finance journey.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Car Finance: A Complete Guide

No Deposit Car Finance – How Does it Work?

How Many Years in a Car Loan Term?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

approval car buying car finance credit score Jan24 time

1. Poor credit history

2. High debt-to-income ratio

3. Unrealistic expectations

4. Lack of employment stability

5. Applying with multiple lenders

Tips to boost your application

Choose the right lender

Save for a larger deposit

Secure a guarantor

Review your budget

Improve your credit score

Refused car finance? We’re here to help

Rates from 9.9% APR. Representative APR 10.9%

Related articles

Excellent

Good

Fair

Poor

Bad

Require more help?

Understanding the car finance landscape

Overcoming poor credit

Options for success

Partner with a broker

Build your credit score

Consider a guarantor

Increase your down payment

Give your application the green light

Rates from 9.9% APR. Representative APR 10.9%

Related articles

Excellent

Good

Fair

Poor

Bad

Require more help?

Leasing: an alternative to vehicle purchase

The benefits of leasing a car

The downsides of car leasing

Finance: a ticket to ownership

Personal contract purchase

Hire purchase

The benefits of financing

The downsides of financing

Lease vs car finance: which is better for you?

Options to own the car outright

Monthly payments

Mileage habits

Customisation

Long-term plans

The final word on leasing vs finance

Rates from 9.9% APR. Representative APR 10.9%

Related articles

Excellent

Good

Fair

Poor

Bad

Require more help?

Whether you’re in the market for a budget-friendly Kia Sportage or an all-electric Tesla Model Y, Annual Percentage Rate (APR) is one of the most important metrics to consider when buying a car in the UK. So, what’s a good APR for car finance and why does it matter for British motorists?

What does APR mean in car finance?

How APR works and an example

Differences between representative APR and personal APR

What is considered a good APR for car finance in the UK?

What’s an average APR for a first-time car buyer?

How new and used cars affect APR

Factors that influence APR for car finance

Credit score

Loan amount

Loan term

Deposit amount

Lender practices

How to get a good APR for car finance

Check your credit score

Compare lenders

Adjust loan terms

Choose the right agreement for you

Unlocking competitive APRs with My Car Credit

FAQs about APR and car finance

Does a low APR guarantee the cheapest deal?