When searching for car finance deals online, consumers will often come across the phrase ‘guaranteed car finance’, which is sadly misleading, since no lender can absolutely promise you a ‘guaranteed car loan’. It would simply be irresponsible and unethical to secure finance on a car for every customer who puts through an application.
This also applies to no credit check car finance. If someone is claiming they can provide you with a guaranteed no credit check loan, then you may wish to find another broker. This is because neither lenders nor brokers can guarantee car finance without checking your credit history.
You may be aware of advertisements on the car broker market stating such things like “Guaranteed Car Finance for people with bad credit today”, but the fact of the matter is, although still widely promoted, there is no such thing as guaranteed car finance and no company can realistically offer it.
Lenders must run a credit check and review every applicant’s financial situation before they can award finance. Moreover, there are a huge range of financial circumstances and personal situations which play a part in whether or not an applicant is provided with finance for a vehicle. Additionally, each lender will have its own specific lending criteria when assessing applications.
All respectable lenders will want to ensure that the people they are lending the money to will be able to pay it back, which is why car finance cannot be guaranteed to everyone, since not every borrower is trustworthy and will be able to make the financial repayments. If guaranteed car finance existed, it would mean 100% of people making applications would be accepted, no matter your circumstances, which of course is impossible.
The law regarding guaranteed car finance
Industry regulators do not approve of this unethical wording, as it is believed to be intentionally misleading and may be used to try to coax people into making finance applications. The applications are then made and when the ‘guarantee’ fails to materialise, a large amount of applications are declined.
For this reason, making false or misleading claims with regards to consumer credit is deemed an offence under the Consumer Credit (Advertisements) Regulations 2010, which holds that any advertisement which contains the wording ‘loan guaranteed’, ‘pre-approved’ or anything phrased similarly, is not acceptable, except where the agreement is free of any conditions relating to the borrower’s credit status.
This is why any car finance broker or dealer which is found promising guaranteed car finance is highly likely to be breaching the regulations and could see themselves faced with an investigation from the Financial Conduct Authority (FCA). The FCA specifically holds that lending most be carried out responsibly and therefore any reputable broker would simply not advertise a guaranteed car loan.
There are, however, a huge number of dealers and brokers in the UK which means the act of policing all of them is extremely cumbersome and there are bound to be occasions where the guaranteed finance offenders go undetected. Examples of these types of companies can be found through a simple Google search.
However, do not be fooled – while the idea of an immediate and guaranteed car loan is certainly an attractive prospect, the truth is that many of these types of online finance brokers will charge a hefty ‘guaranteed finance’ application fee, but even after this fee is paid there is no way of knowing for certain whether the loan will be awarded.
The FCA’s guidelines on responsible lending hold that lenders are to assess each applicant’s creditworthiness before giving car finance. This also means the applicant’s ability to repay debt and financial well-being are to be taken into account.
At CarFinance Plus, we are responsible, ethical brokers who will only provide car finance once we have checked your credit history and matched you to a suitable lender from our panel of car finance lenders.
If you are searching for guaranteed car finance, it’s likely that your credit history isn’t quite perfect, but do not worry; even if you have bad credit, poor credit, are self-employed, a taxi driver, a student or if you been declined a car loan in the past, we can still help.
We try our best to find a suitable loan for all types of borrowers, so even if you have had county court judgements, defaults, payment arrears, have been bankrupt or are in an Individual Voluntary Arrangement (IVA) or payment arrangement, you may still apply and drive off with the car you have been dreaming of.
Since we have a wide range of car loans and car financing options available, we can offer car finance to customers who may struggle to get car loans through other lenders and brokers. We specialise in helping motorists with poor credit to obtain bad credit car loans at competitive rates.
We do accept most applicants with bad or fair credit, so if you require car finance and are worried about your bad credit rating, please don’t hesitate to apply online right now – we might still be able to help you. While we can’t guarantee car finance, we do approve most of our customers.
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