Why have I been refused Car finance?
What you need to know and what to do next
From having bad credit to the total cost of your ideal car, there are several reasons why a mainstream lender might say no. But that shouldn’t mean you have to give up hope. Here at Go Car Credit, we help those who’ve been refused car finance in the past get back in the driver’s seat.
If you have made an application for car finance and it has been refused, it can be very frustrating. However, it is important for you to understand why you have been refused car finance so that you know what steps to take next. With that being said, read on to discover the different reasons car finance is refused.
Main reasons to be refused credit:
- Your credit profile - Bad credit is one of the main reasons why people are refused car finance. There are many things that can impact your credit score, including declaring bankruptcy, going over your credit limit, and missing debt repayments.
- Affordability - Lenders are going to assess your outgoings and income to see if you can cover the expense of the vehicle finance agreement. Lenders have a duty to lend responsibly, and so they need to make sure that you can afford the monthly repayments. As a consequence, your choice of vehicle and how expensive it is can play a key role in the decision-making process.
- Employment - If you currently do not have a job or your employment is not stable, this could be the reason why you have been refused car finance. If you are on a zero-hours contract or you are self-employed and your income is highly inconsistent, you may find that your car finance application is refused.
If you have been refused car finance, it can be frustrating, but it is important to focus on the future. Here are some of the steps you can take to get back on track:
- Make sure that all of the details on your credit file are correct
- Pay down or off your loan and credit card balances
- Register on the electoral roll
- Make your payments on time
- Explore different options that will enable you to purchase a car, such as purchasing secondhand or applying for a different type of car finance
- Consider purchasing a cheaper vehicle
Final words if you have been refused car finance
Whether you have been refused car finance for bad credit or any other reason, it can be very frustrating. However, it is vital to recognise that you are not out of options. You can work on improving your credit score, as well as looking into the different methods of purchasing a car, such as going for a secondhand vehicle.
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