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:
Here at Carplus, we offer car loan for students: they can select a hire-purchase scheme, a personal contract purchase scheme, or guarantor finance.
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Rates from 9.9%: the exact rate you will be offered will be based on your circumstances, subject to status. Representative example: borrowing £10,000 over 60 months, £1,000 deposit, on HP, and a representative APR of 19.9%, the amount payable would be £229.95 per month, with a total cost of credit of £3,796.82 and a total amount payable of £13,796.82.
We look to find the best product from our panel of lenders and will offer you the best deal that you’re eligible for. We earn a commission for providing our services, but this does not influence the interest rate you’re offered.
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 (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.
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 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.
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.
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:
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.
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.
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.
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.
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.
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.
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?
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Now let’s answer some of the most popular questions about car loans for students.
The rules are not so strict here. You have to be between 18 and 75 years of age. You also have to have a monthly income of more than £1,200.
Yes, you can. At age 19, you can apply for car financing. However, it may be difficult for you to get a car credit finance because of your lack of credit history. Also, many car lenders are reluctant to accept financing if you are not working and do not have a regular income.
Of course, a novice driver can do this. However, it may be more difficult for him or her to find a suitable car financing arrangement because of their small driving record. This is likely to affect the number of lenders willing to provide car credit finance.
The main thing here is not to choose a car that is too cool, no matter how much you want it. You're better off avoiding a car that is too expensive, has low fuel efficiency, or has high insurance premiums. A more modest car, such as a small town car, is a more sensible choice for those who have only recently passed their driving test
No, you don't have to be officially employed to get car financing. However, it is very desirable. If your lenders see that you are formally employed and have a steady paycheck, they will be much more willing to trust you. If you’d like to know how much time it’ll take you to pay back your HP or PCP loan, use our online calculator. Please note that the estimates you get with our car finance payment calculator may change once you apply for car finance.
Yes, there is such a possibility. If you are an international student living in the UK, you can apply for car credit finance. To do this, you need to meet a few conditions: you live in the UK, you are enrolled at an accredited UK university, and you are at least 18 years old. If you are not an EU/EEA citizen, you will need to provide a guarantor.