You've filled in a finance form and been told you're pre-approved, or you're about to apply. Before you start looking at cars, it helps to know what that word commits a lender to, whether it touches your credit file and what can still change before you sign.
Pre-approval for car finance means a lender has looked at your basic details and is willing to lend to you, subject to further checks. In practice, it gives you a realistic idea of how much you could borrow and what the monthly payments might be before you commit to a car. You'll also see it called an 'agreement in principle' or a 'conditional approval'.
A pre-approval is based on what you've told the lender so far (your identity, address history, job and income) plus what a soft credit search shows. The lender hasn't yet checked your documents, run its full affordability assessment or looked at the car itself. That's why the amount and interest rate in a pre-approval are a guide, not a final offer.
No, a car finance pre-approval isn't a guarantee that you'll get the finance. It means a lender is willing to go ahead with your application, and the firm decision only comes once the lender has finished its full checks.
A lender can still decline you after a pre-approval, or change the amount or rate it offers. That usually happens when the full application doesn't match the early picture, such as payslips showing a lower income than the one on the form. So the more accurate your details are at the start, the closer the final offer is likely to be.
A free eligibility check, a pre-approval and a final approval are three separate stages, and only the final approval is a firm offer of finance. Each one tells you a little more than the stage before.
| Stage | Who decides | Credit search | What it tells you | Firm offer? |
|---|---|---|---|---|
| Eligibility check | Carplus, using lender criteria [VERIFY] | Soft | How likely you are to be accepted, from 'Highly likely' to 'Low likelihood' | No |
| Pre-approval (conditional approval) | A lender | Soft [VERIFY] | That the lender will proceed, with an indicative amount and rate | No |
| Final approval | A lender | Hard [VERIFY] | The amount, APR and monthly payment in your agreement | Yes, once you sign |
Getting pre-approved for car finance doesn't affect your credit score when the lender uses a soft credit search, because other lenders can't see a soft search on your file. A hard search is different. It's recorded on your credit file, and several in a short space of time can make lenders more cautious.
At Carplus, the eligibility check uses a soft search, and a hard search only happens once you go ahead with a full application. Some lenders run a hard search straight away, though, so if you're applying anywhere else, ask which type of search they use before you submit. A credit reference agency's guide shows how soft and hard searches appear on your credit report.
Your car finance offer can still change after pre-approval, because the lender hasn't finished its checks for car finance yet. The things most likely to alter or end the offer are:
You'll see the final terms before you sign anything, and you don't have to accept them if they've changed. Once you've signed, you still have 14 days to cancel the car finance agreement.
The car you choose can affect a car finance pre-approval, because many lenders set limits on a vehicle's age, mileage and price. A pre-approval doesn't tie you to one car, so you can still change your mind. But if you switch to a car that's older, more expensive or higher-mileage, the lender may need to look at the deal again.
Yes, you can get pre-approved for car finance with a low credit score, as long as your income and budget show you can keep up the repayments. Some lenders specialise in poor credit and look harder at your recent payment history and affordability than at the score itself.
Expect a higher interest rate, though. Lenders charge more to offset the extra risk, so the total you repay over the agreement will be higher than for someone with a strong credit record. That's why it's worth comparing the total amount payable, not just the monthly payment. If you've already been turned down, the government-backed action plan for when you've been refused credit walks you through what to do next.
No, you don't need a deposit to get pre-approved for car finance, although putting one down can help. A deposit reduces how much you borrow, which lowers your monthly payments and the interest you pay overall. It can also make a lender more comfortable, because you're carrying part of the cost from day one.
That's true for both main types of car finance. With Hire Purchase (HP), you own the car once the final payment is made. With Personal Contract Purchase (PCP), you can make an optional final payment (the 'balloon payment') to own it, or hand the car back. The free, government-backed guide to how car finance works compares the two side by side.
You can get pre-approved for car finance in 4 steps, and most of them happen online. Carplus is a credit broker, not a lender, so we pass your application to lenders on our panel and they make the decision. You can check any broker's permissions on the FCA Firm Checker.
Check your eligibility first – it's a soft search, so there's no impact on your credit score.
A delayed car finance decision is usually down to timing, because applications sent outside business hours wait until the team is next in. Once a decision's made, you'll get it by SMS or email.
If it's been longer than expected, check the phone number and email address on your application. A single typo can send your result to the wrong place, and our team can confirm your details and resend it.
