Representative Example: You could borrow £10,699 over 60 months with an initial payment of £495.89 (including £199 Admin Fee) followed by 58 monthly payments of £296.89 with a final payment of £495.89 (including optional £199 Option to Purchase Fee). Total amount repayable will be £19,012,40. 26.1% APR, annual interest rate (fixed) 13.3%.
What to do if you’ve been refused car finance?
Getting turned down for car finance can feel frustrating, especially if you’re relying on a car for work, family or daily life. There are several reasons why your application might not have been successful. This guide explains what to do next, how to understand the reason for being declined car finance and how to improve your chances of getting approved in the future.
If your application for car finance was declined, it’s usually down to one or more of three reasons: your credit history, your affordability, or the lender’s internal rules.
Poor credit history is one of the most common reasons. Missed payments, defaults, or a thin credit file with very little history can all raise concerns for lenders. You can check your credit report with agencies like Experian, Equifax or TransUnion to understand what might be affecting your score. Look for errors and make sure your information is up to date.
Affordability is another important factor. Lenders must check whether the monthly repayments would be manageable for you based on your income, existing commitments, and outgoings. If they feel the loan would put you under financial strain, they may reject the application.
Finally, lenders have their own rules, which can include factors like age, employment type, residency status or even the type of car you want to finance. Even if you meet general criteria, you might still fall outside of their lending policy.
Start by reviewing your car finance application. Simple mistakes like a misspelled name, an outdated address, or missing information can result in a decline. If you notice errors, contact the lender and ask if it can be corrected and reassessed.
Next, check your credit report to see if there are any red flags. You may find missed payments you’d forgotten about, old accounts you didn’t close, or mistakes like someone else’s details showing on your file. If you find errors, you can raise a dispute with the credit reference agency to have them corrected.
Also, think about your current situation. Are you working at the moment? Is your income steady, and can you manage your regular expenses? If you’ve recently changed jobs or had money problems, this might have affected your application. It could be a good idea to wait until things are more stable before you apply again.
Yes, sometimes your driving licence or age can influence whether you're accepted. Most lenders require you to hold a full UK driving licence. If you have a provisional, European or international licence, you may need a lender that accepts these licence’s, like AutoMoney Motor Finance.
Age also matters. You must be at least 18 to apply for car finance, but younger drivers often face additional challenges. With little credit history and less financial independence, lenders might be more cautious when considering applications from drivers aged 18 to 21. In some cases, building your credit profile first or applying with a guarantor or joint applicant might help improve your chances.
Lenders also look at employment status and monthly income. If you’re self-employed, you may need to provide extra proof of income, such as bank statements, invoices or tax returns, as lenders want to see consistent earnings. If you're unemployed or receive benefits, your options may be more limited.
The type of car you’re looking to buy can also be a factor. Expensive or high-mileage cars might be seen as more risk for the lender. In some cases, opting for a more affordable or reliable used car can improve your chances of getting approved.
It’s also worth thinking about how many times you’ve applied. Multiple applications in a short period can negatively affect your credit score and signal to lenders that you’re struggling to get approved.
Improving your credit score doesn’t happen overnight, but a few simple steps can help. Make sure you're on the electoral roll, pay your bills on time, keep your credit card and loan usage low, and avoid missing any payments. Missed payments can stay on your credit file for up to six years.
Try to reduce the amount of credit you’re using, for example, by paying off some of your credit card balance. Avoid applying for several types of credit in a short time. If you don’t already have a credit card, consider applying for one designed for building credit, but only use it for small purchases you can repay in full each month.
You can check your credit report for free through providers like ClearScore, Credit Karma or the credit agencies directly. Taking time to understand what’s on your report, gives you a better chance of being accepted for car finance, in the future.
Yes, if car finance isn’t available to you right now, there are still other options. You could try:
Whether it’s applying with a specialist lender, considering a joint application, or looking at a more affordable vehicle, there are still ways to move forward. Even if finance isn’t possible right now, saving for a deposit or improving your credit score can make a big difference in the future.
Yes, you can reapply, but it’s important not to rush. Wait at least three months before submitting a new car finance application. This gives your credit score time to recover if your last application involved a hard search.
If you’ve already been declined, it’s worth speaking with a lender like AutoMoney Motor Finance. We look at your full circumstances and may still be able to help you get HP car finance, even if others have said no. There are a few options we may be able to offer.
