Just passed your test and looking for car finance? Apply with CarLoans4u and get a decision within minutes.
Passing your driving test is one of the best feelings in the world. At long last, freedom awaits and you’re ready to get out on the open road. There’s just one small final hurdle to address – you need a car.
It’s natural to want to buy your own car but finding one that suits your needs and at a price you can afford can feel like an uphill challenge. The good news is that student car finance could provide the solution. By spreading the cost over monthly payments, you should be able to find a deal that you can comfortably afford, especially if you opt for a used car with low mileage.
You could need a deposit but, depending on the overall cost, this might be lower than you think. Before offering you finance, all lenders will check to make sure that you can afford the repayments required, before signing off on the finance that will make your dream a reality.
Student car finance with a guarantor
If you don’t have a job and are 21 or under, you’re unlikely to have a history of repaying credit or a way of proving income to a lender – and that may make it harder to get accepted for finance.
If this is the case, you may find that you can still get student car finance with a guarantor. A guarantor is someone who is eligible for credit, and who promises to keep up your repayments in the event that you can’t. Most guarantors are family members, like parents, who know you well and will vouch for your ability to pay.
Having a guarantor can be the difference between getting a student car loan and not. Of course, even if you know someone who is prepared to act as guarantor, there’s no guarantee you’ll get finance just yet. But if you get in touch with the CarLoans4u team, we’ll be able to give you your options for student car finance.
PCP and HP finance for young drivers
Two of the most common types of student car finance are PCP and HP, better known as Personal Contract Purchase (PCP) finance and Hire Purchase (HP) agreements.
With PCP, at the end of the term you can either give the car back, trade it in or take ownership of it by paying the Guaranteed Minimum Future Value (GMFV) (also known as a “balloon payment”). Terms and Conditions apply to a PCP agreement.
Frequently Asked Questions
Can I get student car finance if I have no credit history?
If you have no credit history, you may still be able to get student car finance with a guarantor – someone who does have credit history who can vouch for you. People who act as guarantors on car finance for students are usually parents, but your ability to secure a finance arrangement will depend on their credit history and your ability to afford the loan and age.
If you’re not sure what kind of credit history you have, or you have a guarantor in mind but don’t know what to do next, just get in touch with our team. We’ll help explain your options and what you might want to do next.
Do I need to be employed to get approved?
You don’t have to be employed to get approved for student car finance, but it is a big advantage. Before offering you a student car loan, lenders will want reassurance that you have the means to pay for your finance over the term. Proof of a steady income helps you do both. But if you don’t have a job, that doesn’t mean it’s impossible. It simply means you need to find another way of proving your ability to pay and giving the lender the reassurance they need.
What if I work part-time?
If you work part-time, you may still be able to use your income to secure student car finance for your new car. Lenders will want to know that your income will comfortably allow you to cover the monthly payments, so how much you earn and the value of the car you are looking to buy are key. They also want to know that you can continue paying throughout the length of the term, so if your part-time hours are consistent throughout the month and for the foreseeable future, you are much more likely to be approved than if they weren’t.
What are the best cars for students?
Because students tend to have less driving experience and lower incomes, the best cars to look for are usually vehicles with a small engine and low mileage. Buying second hand will bring the cost of your new vehicle down considerably compared to a new car. However there can be certain insurance offers with new vehicles so we’d always recommend shopping around first. Whatever car you choose, it’s a good idea to read reviews online before you commit. Opting for a reliable make, that’s not more than two or three years old, may help reduce the likelihood of unexpected repair bills further down the line.