Guarantor car finance

We understand that gettin car finance can be challenging, especially if your credit history isn't perfect. Our solution is guarantor car finance. With the support of a trusted guarantor, you can secure the car loan you need without the stress of a perfect credit history. It's a practical and accessible way to drive the car you desire, even if your own credit rating or situation is less than ideal.

What is a guarantor car loan?

Guarantor car finance is a type of loan that involves another person, usually a family member or close friend. Your guarantor agrees to take on the responsibility of your car loan if you are unable to make the monthly payments. This arrangement helps you qualify for car finance, even if your credit score isn't perfect.

If a lender views you as a higher-risk applicant, having a guarantor with a good credit score and financial stability can significantly increase your chances of securing car finance. Their financial strength reassures the lender, making it easier for you to get approved.

Relying on your guarantor to pay your car loan should always be a last resort. If you are struggling financially and unable to make the full loan payments yourself, contact your lender first. They can often provide options to help manage your payments and avoid defaulting on your loan. This proactive approach can prevent additional stress for both you and your guarantor.

How does guarantor car finance work?

Getting a guarantor car finance loan is quite straightforward. It follows a process similar to getting any other loan in the UK. Here's how it works:

1. Application form: You fill out an application form. This form helps our specialists understand your financial situation and your needs.
2. Agreement with guarantor: You and your chosen guarantor agree to the car finance arrangement. Your guarantor is the person who promises to cover the repayments if you can't.
3. Processing your request: Our car finance specialist processes your request in the same way they would for any other loan application. They review your information and assess your eligibility.
4. No upfront deposits: The good news is, you typically don't need to make any upfront deposits when applying for guarantor car finance. It's a convenient option for many people.

Using a guarantor doesn't change the rest of the car finance application process. You can still choose between Hire Purchase (HP) or Personal Contract Purchase (PCP) options, making monthly payments.

The guarantor's role is to provide added security to the finance company. If you miss payments, they step in to cover the debt. Most importantly, finance providers prioritise finding solutions and assisting you to get back on track, rather than resorting to involving the guarantor or repossessing the car.

Can you get car finance with a guarantor loan?

Yes, you can! If your credit score isn't great and you're having trouble securing a car loan, a guarantor can help. Your guarantor assures the lender that you will make your payments on time, making you eligible for car finance.

Applying for car finance with a guarantor is possible even for young drivers with a poor credit history, but it's ultimately up to the finance company to decide if you qualify. In recent years, guarantor car finance has become less common, so you'll need to thoroughly research lenders who offer this option.

Another strategy is to provide a larger deposit for your new car to finance or to accept higher interest rates. These approaches can also improve your chances of securing a loan.

Consistently paying your car finance on time can help boost your credit score over time. Building a positive monthly payment history may enable you to secure more favourable rates in the future.

Who can be my guarantor?

• Credit Score and Debt Management: A suitable guarantor needs a solid credit history and good debt management skills. Lenders look for a decent credit rating, though the exact score required varies by lender and loan amount.
• Payment History: Your guarantor should have a proven record of making timely payments. Evidence of managing significant repayments, like a mortgage or previous car finance deals, strengthens their suitability.
• Age Requirement: Guarantors must be at least 18 years old, but some lenders require a minimum age of 21. Confirm this with your finance provider before finalising the agreement.
• UK Residency: Your guarantor must be a UK resident with a UK bank account.
• Financial Independence: They must be financially independent and capable of covering any missed repayments without affecting their financial situation.

Who cannot be my guarantor for car finance?

When selecting a guarantor for your car finance loan, certain restrictions and criteria must be met. Here's who cannot be your guarantor:

1. Individuals residing outside the United Kingdom: Your guarantor must be a UK resident. Non-UK residents are not eligible.
2. Spouse or partner with financial interdependence: If your spouse or partner shares significant financial interdependence with you, they cannot be your guarantor. Financial independence is crucial to ensure they can make repayments independently if needed.
3. Individuals without a UK bank account: Guarantors must have a UK bank account to facilitate financial transactions associated with the car finance agreement.
4. Persons with bad credit history: Individuals with a poor credit rating may not meet the lender's criteria. Lenders typically require guarantors to have a good credit history.
5. People below the age of 18 (or 21 in some cases): Guarantors must meet the minimum age requirement, which is usually 18. Some lenders may require guarantors to be at least 21 years old.
6. People with after-tax monthly income below £1000: Guarantors should have a minimum level of income to demonstrate financial stability. An after-tax income lower than £1000 per month may not meet the lender's criteria.

Who is guarantor car finance for?

Guarantor car finance is designed for people who struggle to get car finance due to a less-than-perfect credit history. If you've had financial problems in the past and worry about your credit score, then guarantor car loans can help. It offers a second chance to those in need.

Young, first-time drivers often face the challenge of not having an established credit history. Guarantor car finance allows them to get on the road by leveraging a guarantor's good credit history to vouch for their financial responsibility.

This type of car finance provides an opportunity for individuals to secure loans that might otherwise be difficult to obtain due to their credit situations or lack of credit history. It's a practical and accessible solution for those needing a helping hand to get behind the wheel.

What does a guarantor need to provide for car finance

• Personal details: Your name, address, and contact number.
• Work history: Information about your job and employment.
• Credit score: Your financial reputation.
• Loan and debt track record: Your history of managing loans and debts.
• Previous guarantor loans: Any prior experiences as a guarantor.
• Owned property or vehicles: Real estate or cars in your name.