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What is the age limit for car finance?

Legally, you can’t sign a car finance agreement until you’re 18-years-old. Some lenders also have eligibility requirements that mean they won’t offer loans to people aged under 21-years-old. That doesn’t mean you’ll automatically qualify for a loan on your 18th birthday as other factors will be considered including your income and credit score.

What is the minimum age for car finance?

While you can pass your driving test and hit the road at age 17, you’ll need to wait until you turn 18 to get car finance. That’s the minimum age that you can legally sign a finance agreement.

Some lenders might have different eligibility requirements when it comes to age. You might find that they won’t lend money to people aged under 21.

Is there a maximum age for taking out car finance?

While there is a minimum age for car finance, most lenders won’t set a maximum age. This means older people, pensioners, and retirees can still qualify for car finance loans.

Can an 18-year-old get car finance?

While it might not seem fair that you need to wait until you turn 18 to get car finance, unfortunately it’s the law. And it doesn’t just apply to car loans, you can’t sign any financial agreements until you’re a legal adult.

That doesn’t mean you’ll automatically qualify for any car finance loan on your 18th birthday. There are other factors that will affect your eligibility including your income, the car you want to buy, and the state of your credit score.

As a young person, it’s understandable that you won’t have much of a credit history yet, but it can make lenders see as a higher risk borrower. It’s all about the unknown; lenders can’t be sure how you’ll act as a borrower and whether they can trust you to make your payments on time.

One way of improving your chances of getting finance at 18 is to start working on your credit score as soon as possible.

It’s not an exact science, but there are a few steps you can take to improve your chances of securing a loan:

  • Register on the Electoral Roll
  • Make any other loan or credit card payments on time
  • Open a bank account once you turn 16
  • Save money for a deposit so you don’t have to borrow a high amount
  • Consider increasing your income with a part-time job
  • Compare different types of car finance loan like joint or guarantor finance

Related FAQs

If I finance a car, can someone else be the registered keeper?

Most lenders won’t let you finance a car if someone else is going to be the registered keeper. That’s because car loans are tailored to an individual and based on their personal financial circumstances. If you try to take out a loan for someone else and don’t tell the lender, you could be guilty of fronting, which is a type of fraud.

Can I buy a car on finance for someone else?

It’s not usually possible to buy a car on finance for someone else. In fact, most lenders will ask that the person who signs on the dotted line is also your new wheels registered keeper and main driver. Every car finance agreement is tailored to an individual and suited to your personal circumstances.

Am I Eligible for Car Finance

Your car finance eligibility will depend on the lender that you apply with. Each lender has different eligibility criteria that they consider.

However, you must be over 18 years old and have been a UK resident for at least three years to qualify for a loan.

What Documents Do You Need for Car Finance

When you apply for car finance, the lender will ask you to supply documentation to verify who you are, where you live, and how much you earn. Paperwork needed can include bank statements, payslips, utility bills, and a copy of your passport or driving licence. They use this information to protect you from potential identity theft and confirm that the loan they’re offering is right for you.

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