Handing over car keys to new owner

Bad credit car finance

  • cms-tick
    Apply with no impact on your credit score
  • cms-tick
    All credit histories and circumstances considered

Zuto is a credit broker, not a lender. Our rates start from 10.9% APR. The rate you are offered will depend on your individual circumstances. Representative Example: Borrowing £6,500 over 48 months with a representative APR of 19.9%, the amount payable would be £192 a month, with a total cost of credit of £2,712 and a total amount payable of £9,212.

What is bad credit car finance?

Bad credit car finance allows people with a low credit score to buy a car. Instead of paying for the car in full with their own money, they can pay using a loan from a finance company, and pay it back in monthly instalments, plus any interest.

Types of car finance if you have a bad credit score

Even if you have a bad or poor credit score, there are three types of car finance you may be able to apply for:

  • Hire purchase (HP) – regular monthly repayments. Secured against the vehicle. Own the car at the end of the term.
  • Personal contract purchase PCP – regular monthly repayments. Secured against the vehicle. Pay depreciation value only. Option to purchase car at the end of initial term.
  • Personal loan – regular monthly repayments. Not secured against the vehicle. Own the car from day one.

At Zuto we understand that millions of people rely on their cars, whether that be to take their kids to school, or getting to and from work each day, which is why we want each of our customers to understand the ins and outs of car finance before applying.

How to get car finance if you have bad credit

If you have a poor credit history, getting car finance can be more difficult. However, some lenders specialise in providing car finance to people with bad credit.

  1. Check and improve your credit score – you can look at your report and score with ClearScore, our trusted partner. It’s worth improving it as much as you can. Read our tips below: How can I improve my credit score?
  2. Apply for car finance (soft search) – Zuto carries out a ‘soft search’ credit check on all applications which enables us to match you with one of our lenders. This doesn’t affect your credit score but does give us and you an idea of what options are available.
  3. Choose the option for you (hard search)if you’re accepted for car finance, and are happy with the APR and monthly repayments, it’s at that point the lender will need to do a hard credit check – we always get your consent before conducting the hard check so no need to worry. This will be marked on your credit report, and is done for any car finance application, regardless of your credit score.

Our team are experienced in helping drivers find the right car finance deals from our panel of lenders and accept applications for people with defaults, County Court Judgments (CCJs), Individual Voluntary Agreements (IVAs), mortgage arrears or late payments on their credit history.

Every day, we help drivers in search of car finance to secure the arrangement they need for the car they want. By getting to know you and your financial situation, we can search our panel of lenders to try to find you the best car finance offer based on your personal circumstances.

Impact to credit score when applying for car finance

Understanding how applying for car finance affects your credit score, why you may have been refused finance in the past, and what you can do to improve your credit score moving forward should all help in improving your chances of being approved for car finance.

You can also find more information in our guide, Impact to credit scores when applying for car finance.

If you haven’t already, you can check your credit score and report, for free, with our trusted partner, ClearScore.

Will applying affect my credit score?

With Zuto, you can apply for car finance without impacting your credit score.

After completing your application, we’ll approach our panel of lenders to find the best available options for your personal circumstances.

If you proceed, we will need to perform a hard search, which will impact your credit score, but we will always ask for your consent beforehand.

Why have I been refused car finance before?

If you’ve been refused car finance before, it might be because you:

  • Have a low credit score.
  • Might have tried to borrow too much.
  • Might not have had a deposit.

We go into this in more detail in our help and advice section.

How can I improve my credit score?

There are some simple ways you can try to improve your credit score:

  • Fix mistakes on your credit report – if information isn’t accurate such as an account showing as ‘open’ instead of ‘closed’ then you should amend that to improve your credit score.
  • Register on the electoral roll – this allows credit reference agencies to verify who you are.
  • Avoid making multiple credit applications in a short space of time – avoid numerous ‘hard searches’ in a short period. Zuto doesn’t do a ‘hard search’ credit check until you are happy with the finance offer and want to proceed.
  • Pay your bills on time – forgetting to pay your bills suggests to some lenders that you struggle to manage credit well.

What are the risks of a ‘hard search’ credit check?

A ‘hard search’ credit check is when a lender looks at your credit report and score. This leaves a mark on your report – usually for a year – meaning lenders can see when you’ve applied for credit and whether it was successful.

  • Lenders will see if you’ve applied for multiple loans which sometimes can be seen as a negative.
  • Multiple credit applications within a short space of time can impact your credit score.
  • Multiple applications or hard searches can also give the impression you’re struggling to keep up with existing repayments.
Car finance calculator

See how much you could borrow

Frequently asked questions

Bad credit car finance FAQs

Can I get car finance with a CCJ?

Down arrow

Yes, you can get car finance with a County Court Judgment (CCJ), but it can make being approved harder.

Zuto works with a large panel of lenders who help customers with a lower credit score.

You can find out more in our guide to ‘Can I get car finance with a CCJ?’.

Can I get car finance with an IVA?

Down arrow

You might be able to get car finance with an Individual Voluntary Arrangement (IVA), but it does make it more difficult.

It isn’t impossible, though. At Zuto we work with a large panel of lenders who specialise in providing finance to customers with a bad credit history.

Visit our help and advice section for more information about IVA car finance.

Can I get car finance if I’ve been made bankrupt?

Down arrow

If your bankruptcy has ended and you’ve been discharged, you can apply for car finance again.

We recommend you wait 12 months to try to build up your credit score again – you can find more help and advice in our car finance bankruptcy guide.

Can I get car finance if I have a default?

Down arrow

You can apply for car finance if you have a default but your chances of being approved are likely to be lower due to the default itself impacting your credit score.

For more information on applying for car finance with a default visit our guide which goes into this subject in more detail.

Can I get car finance with poor credit?

Down arrow

Car finance depends on your personal circumstances. We help many people with poor credit to find a car finance deal that works for them.

You can apply for car finance with Zuto without impacting your credit score. We’ll then approach our lenders and share the options with you. If you decide to proceed, we’ll perform a ‘hard search’, which is when your credit score could be affected.

What credit score is too low for a car loan?

Down arrow

There is no set limit for car loans – it depends on your personal circumstances.

You can apply for car finance with Zuto without affecting your credit score. If you’re eligible for car finance, you can then proceed and we’ll carry out a ‘hard search’, which can affect your credit score.

Is it hard to get accepted for car finance?

Down arrow

In general, you are more likely to be accepted for car finance if you have a good credit score.

It can be more difficult for those with a poor or bad credit score, but – as a broker – Zuto is able to help find potential options for you to save you time.

If you want to find out more, read our car finance eligibility page.


Our customers love us