Refused car finance

If you’ve been refused car finance, it makes sense to find out why.

This can show you things to work on to improve your chances of getting credit in the future. The most common reasons why companies would refuse credit are:
Low credit score: If you have a low credit score, this may result in some lenders refusing credit automatically.

Limited credit history: If you have not had credit in the past, and haven’t built up a credit rating, some lenders may refuse finance.

Previous Bankruptcy or Repossession: Bankruptcy or repossession in the past can significantly impact a person’s creditworthiness.

High Debt-to-Income Ratio: If you already have a lot of debt, some lenders may refuse to add to this.

Depending on your situation, there are a few steps you can take to ensure lenders are more likely to approve your application.

To make your finance application more likely to be approved, here are a few steps you can take – depending on why it was refused.

If your application was refused due to a limited credit history, you could apply for a credit builder credit card. If you use and pay off the balance regularly, you should build up a positive credit score fairly quickly.

If you have a high debt level, you could pay off any debts you can. If you are struggling to pay off debts, you could negotiate with existing creditors to reduce interest.
Paying off debts, and ensuring you don’t miss payments, will improve your credit score.

If you have been refused a car loan, you should also look at different lenders. The CarMoney ninjas will slice through the market, showing you the lenders that are most likely to approve your application. This means you don’t waste your time applying to lenders that won’t approve you.
Many of the lenders we work with specialise in helping people who have been refused car finance in the past.

Choosing which type of car finance is right for you is an important step in your application.

Your history with car finance companies may influence which type of finance is right for you.

Hire Purchase: This is a simple and popular finance option. Essentially you hire a car from the finance company for a set period of time. Once you have made the final payment, the vehicle belongs to you. Lenders may repossess the vehicle if you miss payments, and monthly payments are usually higher.

Personal Contract Purchase: You don’t pay the full value of the car with PCP finance. Instead, you pay the depreciation of the value. At the end of the PCP agreement, you have to pay a lump sum if you want to own the vehicle. If you miss payments, the lender may repossess the vehicle. However, monthly payments are generally lower, and it is easier to change cars.

It can be discouraging if you have been refused car finance, especially if you had your dream car in mind.

However, support from the CarMoney ninjas can make you more likely to find a lender that will approve your application.
Get a quote or contact us today.