Car finance on benefits

As of August 2022, over 22.4 million people claimed benefits from the Department for Work and Pensions in the UK. Over 9.1 million of those were of working age, which is a rather large percentage. However, for many of those who dream of getting a car, it is unclear how receiving welfare benefits affects an individual’s eligibility for car financing. If you are still unsure whether it is possible to receive car finance on benefits, we can assure you that it is.

At Carplus, we believe that everyone deserves the opportunity to own a car. Our team of experts works closely with our network of specialist lenders to provide affordable car finance solutions that are tailored to your individual circumstances.

Can you pay for car finance with benefits?

Many people wonder if they can pay for car finance with their benefits. The answer is yes, it's possible! However, there are certain factors that may affect your eligibility for car finance, such as your credit history and whether you're receiving certain benefits:

• Income support
• Disability allowance (DLA)
• Working tax credit
• Child tax credit
• Carer’s allowance
• Personal Independent Payment (PIP)
• Housing benefits

These benefits will be counted as your income when you fill out your application for car finance. Carplus is a versatile company that offers flexible solutions to clients with varying financial circumstances.

How does car finance for people on benefits work?

Even though qualifying for car finance on benefits is typically trickier than for an employed individual, there is a way to make it possible. Carplus selects reliable lenders for you that are ready to provide you with car credit even if you are receiving benefits. We will provide you with the best car finance deals and a transparent monthly payment plan appropriate for your budget.

Can you get car finance on benefits?

The short answer to whether car finance for people on benefits is available is “yes.” Receiving benefits is a common practice that won’t be able to stop you from fulfilling your dream of getting a car but may complicate the process of financing it.

At Carplus, we strive to provide every person with an opportunity to get car finance. That is why we handle car finance cases for clients who have bad credit, no guarantor, disability allowance, and other complex life circumstances. Therefore, we certainly can help you get car finance on benefits - read ahead for all the details!

Can I get car finance if I am on benefits and have bad credit?

Absolutely! Receiving car finance on benefits or when having a bad credit history is possible with Carplus. Our professional team understands that even if you have been in a difficult financial situation before, it doesn’t mean that your budget is not suitable for a car purchase now.

We cooperate with more than ten reliable lenders that are willing to provide bad credit car finance on benefits. For more information on your specific case, do not hesitate to request a quote.

What will affect your eligibility for car finance on benefits?

We only do a “soft” credit check on every client, which does not have any impact on the credit rating and increases the chances of having the car finance request approved. However, there are several critical circumstances that may put your eligibility for car finance on benefits at risk, such as:

• Your income: One of the main factors that lenders consider when determining your eligibility for car finance is your income. If you are on benefits, your income will likely be lower than someone who is employed full-time, which can affect your ability to qualify for certain types of car finance.
• Your credit score: Your credit score is another important factor that can affect your eligibility for car finance. If you have a poor credit score, you may find it more difficult to get approved for car finance, or you may end up paying a higher interest rate. Read more about what credit score you need to buy a car
• Your employment status: While being on benefits does not necessarily disqualify you from getting car finance, some lenders may prefer borrowers who are employed full-time or have a stable source of income. Read more about unemployment car finance in our guide
• Your expenses: Lenders will also look at your expenses when determining your eligibility for car finance. If you have a lot of other debts or expenses, this could affect your ability to make your car finance payments.
• Late repayments: If you have missed payments or fallen behind on your repayment schedule on other credit agreements, this could negatively impact your chances of being approved for car finance on benefits.
• IVA: If you currently have an IVA (individual voluntary agreement), unfortunately, we will not be able to assist you with securing car finance. However, if you have had an IVA in the past that has since been settled, it will not affect your chances of being approved for car finance on benefits with us. Read more about car finance on IVA in our guide
• Bankruptcy: Unfortunately, we cannot proceed with the applications of those clients who are currently in a state of bankruptcy. However, if the bankruptcy title was discharged, we will gladly process your request. Read more about car finance after bankruptcy in our guide
• Having a County Court Judgement (CCJ): A CCJ will not always prevent the acceptance of your application, yet the chance is still there. We recommend that you submit your request so that we could review it and make a decision based on your individual case.

If you have any questions or are interested in exploring your car finance options, please don't hesitate to contact us for a quote. We have a team of experienced car finance brokers who can help you find the right car finance solution for your needs.

How much can I borrow for car finance if I am on benefits?

There is no unified allotment of car finance available to all. Since every client has a unique story and personal goals, the loan amount will vary from customer to customer for benefit car finance. Therefore, a good practice is to come to a clear understanding of how much money you need and request a quote from our professionals. The form on our website enables you to request a sum anywhere from £3,000 to £50,000.

We understand that financial challenges can make it difficult to secure car finance, which is why we specialize in providing solutions for customers who may have difficulty getting approved elsewhere. Our team works with a network of trusted lenders who are willing to consider all types of customers, including those on benefits or with a less-than-perfect credit history. Once we receive your application, we will review it and come up with an estimate that matches both your requirements and the lenders’ policy. The moment your request is processed, you will receive a personalized quote that contains an exact estimate of the car finance amount you qualify for, including any available benefit car finance options. Contact Carplus today to learn more about our car finance solutions and how we can help you get behind the wheel of the car you need.

How can people on benefits get car finance?

If you have been denied of the traditional ways of getting car finance on benefits, don’t despair. Carplus has years of experience in assisting clients in finding the best offers and achieving their car purchase goals.

All you have to do is have an idea of what kind of vehicle you would like to obtain, how much it costs, and what additional expenses you may need to bear. Those may include tax, insurance, and maintenance costs and can affect the vehicle’s affordability drastically.

After you have those details set in your mind, you can apply for a free quote on our main page.

You will need to state the following information:

• The sum of the car finance loan that you require
• The type of vehicle you would like to obtain
• The driving licence you have
• Your marital status
• Your ID type and age

After you provide all the basic details about yourself, you will be asked to select the type of income you are receiving. Select “Benefits” if it is applicable to you and proceed to the next step so that Carplus can start handling your request and get back to you within the shortest time frame. Therefore, applying for car finance on benefits can be a fast and simple process if you choose the right provider.

Do we offer guaranteed car finance on benefits?

No finance company can guarantee car finance on benefits, as the decision-making process in every case depends on a variety of factors. Besides, it is against the law to advertise guaranteed car finance.

At Carplus, we understand that life circumstances can lead to people claiming benefits, and we believe that everyone should have access to car finance. We offer car finance options for someone on benefits, and our team will work with you to find a solution that fits your budget and needs. So whether you are on Universal Credit, PIP, or other disability benefits, we are here to help. Contact us today to discuss your options and receive a quote.

How can I boost my chances of approval?

Even if it seems that your request for car finance on benefits will not be approved due to previous negative experience with traditional financing methods, we do recommend you submit your application at the Carplus website. Besides, there are things you can do to improve your chances of getting car finance by doing the following:

• Join the electoral roll (which is easy to do online in just five minutes). Not only does this suggest that you are an active citizen, participating in democracy; it also verifies your identity and details in the eyes of the authorities. Not being on the electoral register will can’t doubt in the minds of lenders and significantly harm your credit score.
• Improve your credit score. The higher your credit rating, the higher the probability of you receiving car financing. Cover all outstanding debt, make timely payments on existing loans, and build your credit file.
• Joint loan application. This type of loan enables you to divide the expenses between two people. Joint loans are typically more affordable, as you share the payback responsibility.
• Guarantor car finance. Having a person who takes the responsibility of paying back the loan if you fail to do so makes you more attractive as a borrower for many lenders.
• Pay-as-you-go car finance. With PAYG finance, you will be required to make an initial payment, alongside monthly payments. Besides, you will have a box that prevents you from driving if the instalments are overdue. This type of car finance is fairly easy to avail of.
• Borrow a smaller amount. Small sums of money are easier to pay off, which makes lenders give them out more willingly.

Thus, there are plenty of ways to boost your likelihood of getting your car finance on benefits application approved!