There’s no feeling quite like passing your driving test. It’s a thrilling milestone that opens up new levels of freedom and independence. But for young drivers, the dream of car ownership can be met with a roadblock: car finance. But fear not, as this guide will navigate the world of car finance for young drivers, exploring your options and what you can do to get your new set of wheels.
Can You Finance a Car at 17 in the UK?
Unfortunately, you can’t get credit until you are 18 in the UK.
Cars on Finance for 18 Year Olds
Once you hit 18 car financing becomes a more viable option. However, it’s important to remember that your eligibility will vary from lender to lender, this is because they typically favour a history of financial responsibility.
Building a strong credit history is one of the best ways to strengthen your car financing application. It can unlock better interest rates and loan terms, which can save you money in the long run. But for young drivers with limited credit history, building a good score can seem like an uphill battle. Here are some practical steps you can take to strengthen your credit score and improve your chances of securing car finance:
- Get on the electoral roll: Registering to vote is a simple step that shows lenders you’re a responsible citizen with a demonstrable residential address.
- Get a credit card: Get a small credit card and make sure you use it but also repay it in full at the end of every month. Store cards or online accounts with shops can also work in the same way
- Pay bills on time: This is the golden rule of creditworthiness. Consistent on-time payments for phone bills or steaming services can all contribute positively to your credit profile. Try and make sure all bills are in your name as well.
- Check your credit report regularly: Get a free copy of your credit profile from a credit reference agency or your bank. Regularly checking for errors or discrepancies allows you to address them promptly and avoid any negative impact on your score.
Can a Student Get a Car on Finance?
Being a student doesn’t automatically disqualify you from car finance. Here are some factors that can influence your application:
- Income: A steady source of income, even if that’s from a part-time job or student loan can help strengthen your application.
- Credit history: While a long history of credit is ideal, lenders may consider alternative factors for younger applicants. Maintaining good financial habits, like paying bills on time (whether that be rent for student accommodation or mobile phone contracts), can help build a positive credit profile.
- Consider a joint car finance plan: If possible, apply for a joint finance plan with a family member. Combining incomes and creditworthiness could potentially improve your chances of approval.
Additional Considerations for Young Drivers
Car finance is a significant financial commitment. Make sure you can realistically afford the monthly repayments before diving into a credit agreement. Remember, responsible borrowing lays the foundation for a healthy financial future. Make sure you factor in:
- Insurance costs: Young drivers typically face higher insurance premiums. Factor this into your overall budget when choosing a car. Consider telematics insurance that includes a black box that rewards safe driving habits as these can often reduce the cost of insurance.
- Car choice: Opt for a reliable, fuel-efficient car with lower running costs. Got a car in mind? Take a look at our showroom to see what we have on offer.
- Maintenance: Regular car maintenance is crucial. Factor in the cost of MOTs, servicing and potential repairs when budgeting for your car.
Ready to Hit the Road?
While securing car finance as a young driver might require some extra planning and preparation, it’s definitely achievable. By understanding the eligibility requirements, exploring your options, and prioritising responsible borrowing, you can cruise towards car ownership with confidence. See what Ucan can offer you with our online quote tool today.