Car finance for students

Are you a student and looking to finance a car? We understand that having access to a reliable mode of transportation can greatly enhance your university experience and provide you with the freedom to explore beyond campus boundaries. At Carplus, we offer student car finance deals specifically designed to cater to the unique needs and circumstances of students like you.

Can students get car finance in the UK? Yes, but there are a few complications here if you:

1. Possible Limited Credit History: Students often have limited or no credit history, which can make it challenging for traditional lenders to assess their creditworthiness. Without a strong credit profile, securing car finance may be more difficult.
2. Possible Income Constraints: As a student, your income may primarily come from part-time jobs, scholarships, or financial aid. Lenders may consider this when evaluating your ability to make car loan repayments. Limited income can impact the loan amount you qualify for and the interest rates offered.
3. Student Status: Some lenders may view students as higher risk due to their transient lifestyles and uncertain future employment prospects after graduation. This perception can affect the terms and conditions of the car finance agreement.

Here at Carplus, we offer car loan for students: they can select a hire-purchase scheme, a personal contract purchase scheme, or guarantor finance.

Types of Car Finance Deals for Students

If you're looking to get car finance for students, it can be challenging. However, some lenders do offer car finance deals, which are likely to be either a Hire Purchase (HP) or Personal Contract Purchase (PCP).

Hire purchase

Hire Purchase (HP) is the most common type of car finance for students because it's easier to obtain, even if you have a less-than-perfect credit history and low income. This is because students are more likely to buy a used car than a new one. With Hire Purchase car finance, you essentially ‘hire’ the car until the final payment, when you own the vehicle. You’ll split the total cost of the car between the deposit and the monthly repayments and then have the option of paying a small fee known as the ‘option to purchase at the end of the term.

Personal contract purchase

On the other hand, Personal Contract Purchase (PCP) for student car finance is arguably more popular than HP due to the lower monthly fees. With PCP, you won’t automatically own the car at the end of the term. Instead, you’ll have three options; pay the fixed monthly payments or a fee based on an agreed guaranteed future value to own it, return the car and walk away, upgrade to another vehicle, and keep an agreement going.

However, it's worth noting that the fee at the end of a PCP is usually a few thousand, which is why the monthly payment is lower. Additionally, unlike HP, you'll have a mileage limit with a PCP.

Personal Loans

Personal loans can be an alternative to traditional student car finance options. You can apply for a personal loan from a bank or lender to finance the purchase of a car. The loan amount and repayment terms will depend on your creditworthiness and the lender's criteria.

Student Car Finance with a Guarantor

Car finance with a guarantor can be a great option for students who have little or no credit history or who have a bad credit record. Essentially, a guarantor is someone who agrees to repay your car finance if you're unable to. This can give lenders the confidence they need to approve your car finance application, even if you're a student with little financial experience. Keep in mind that a guarantor must have a good credit score and be willing to make the repayments on your behalf if necessary.

Get car finance for students with bad credit or no history!

Even if you have no credit history or have a poor credit record, Carplus will help you get student car finance with a bad credit score.

This way, you let the lender know that all fees will be made on time, even if you cannot personally make the repayments. The guarantor is contractually obliged to make a payment you are unable to fulfil.

We will also do our best to help you land a low APR (Annual Percentage Rate) student car finance deal. Getting a low APR loan isn’t as difficult as it may seem. The shorter your deal is, the more chances you have to get this type of car finance. Also, there are other things you need to be able to receive low APR car finance:

• Proof of income
• Credit history check
• Guarantor

How can new drivers secure student car finance?

Despite the difficulties that new drivers face, there are ways to secure student car finance. In fact, there are six of them! Let us take a look.

1. Build a credit profile

You probably don't have a credit profile. And that's okay - it's rare for young people that age to need credit. So to establish yourself as a reliable borrower, get a loan or credit card, and use it responsibly.

2. Be employed

Of course, it's easier said than done, but it does help. A job (especially a full-time one) will not only show potential car lenders that you are responsible, but it will also provide you with a reliable monthly income.

The higher your monthly income, the better your chances of getting car finance. Having a net monthly income of £1,200 or more will significantly increase your chances of getting a car loan.

3. Be sensible with your vehicle choice

Choose your car wisely. Don't choose a too expensive car; a modest car is a more practical choice. If you select an expensive car to buy and operate, you will lower your chances of getting a loan.

4. Save for a deposit

Try to set aside some money to make a deposit. The more you set aside, the better you will look in the lender's eyes. In addition, a large deposit reduces the amount you have to pay on your car credit finance, which means less interest.

5. Pay with cash

It's better to buy a car with cash, so you don't have to pay interest on a loan or financing agreement. Also, many companies give you a discount when you pay cash.

6. Get black box car financing

Another excellent option would be to choose a finance option that includes a black box. This small device is attached inside the vehicle, monitors how the car is being driven and reports it to the insurance company. If you drive safely and responsibly, a lender may reduce the interest on your finance.

Why choose Carplus to get car finance for students?

1. Extensive experience and expertise: Our team consists of experienced professionals ready to help and support you in obtaining a car loan. We provide finance deals ranging from £2,000 to £25,000.
2. Ability to track the application: We provide each client with an application tracker link to track the progress online.
3. Hundreds of satisfied customers: In the testimonial section, you can see honest opinions from customers who helped finance a car, even with bad credit. Our customers rate us Excellent on Trustpilot.
4. Professionalism and Ethics First: The Financial Conduct Authority regulates our business, and therefore we only approve applications that are safe in terms of monthly payments.
5. Online car finance calculator. You can use the online calculator on our website to see how much your HP or PCP car finance would cost. All you have to do is specify the amount of car finance you’d like to get and the amount of time it would take you to pay back the loan, and the calculator will give you an idea of how much you’ll have to pay every month.