Are you searching for guaranteed car finance?
You may see advertisements which “guarantee finance”, however, in truth no company can guarantee that you will be accepted. Every lender has its own criteria and will take into consideration your individual circumstances.
If you’re after guaranteed car finance, you are probably in a situation where lenders have turned you down in the past, perhaps because you have a bad credit record. In this situation, there are steps you can take to improve your chances of getting approved.
What Is Guaranteed Car Finance?
A lot of people think that they can somehow get car finance guaranteed, and it is sometimes promoted by lenders.
But no legitimate lender can deliver on a guarantee like this.
They may offer guaranteed approval to encourage you to apply – but until they have checked your application, they cannot guarantee anything.
Why Is Guaranteed Car Finance Not Available?
The truth is, the lender has to check whether a person can afford to pay back their loan. Clearly, lenders want to get their money back, so they simply cannot guarantee to lend money to anyone without first deciding whether they are a safe bet.
It is also unethical because they would end up lending money to people who cannot pay it back.
In fact, if lenders claim to guarantee loans, they can get in trouble with the Financial Conduct Authority.
So What Can You Do?
Forget about looking for guaranteed car finance. If you think that you are going to find it difficult to get car finance, there are some steps you can take.
Carry Out a Credit Check
Start by finding out what your current credit status is. It may be that there are mistakes on your credit record that you can rectify, and you may also be able to take steps to improve your record.
This is a longer-term strategy, but one that may be worth doing.
Representative APR of 27.9%
Search for a Specialist Lender
There are lenders that specialise in providing car finance to people who are unable to get finance from standard lenders.
Finance usually comes with a slightly higher interest rate, but there is a better chance that they will accept you.
They won’t guarantee it, however, and they still have to look at your situation.
You may be self-employed, have a CCJ or have missed payments – it doesn’t matter, these lenders may still be able to help.
They may offer a soft search option, which is where they check your credit score without it affecting your record.
This gives you a good indication of whether you will be approved, and you can then decide whether to go ahead with an application where a full credit check is carried out.
Try to Save Up a Larger Deposit
You may also want to save up a larger deposit. If you can do this, lenders may be more willing to provide you with car finance because the risk for them is lowered.
Start Looking for Car Finance
You don’t need to search for guaranteed car finance because you won’t find it. It’s far better to take the steps above and increase your chances of getting approved.
Start your search for a lender that specialises in providing car finance to people with bad credit, and you stand a good chance of being able to find a loan for your car.