Car Finance for Young Drivers
Young driver car finance deals
Reviewed & fact checked
Reviewed by: Geoff Tooze - CEO and Content Lead
Last reviewed: 3 February, 2025
How we fact-check our contentHow young driver car finance works
Get a quote
Fill out a quick application to check if you’re eligible, with zero impact on your credit score.
Meet your account manager
A dedicated Account Manager will be in touch to guide you by call, text, or WhatsApp.
Choose a car
Browse 100,000+ used cars or buy from any trusted UK dealer, it’s up to you.
Hit the road!
Tell your Account Manager what you’re after, and if approved, you could be driving in just a few days.
*Rates start from 8.9% APR - Representative example 20.5% APR
Young Car Driver works with CarFinance 247 Limited, a credit broker (not a lender), to help you find the best car finance deal for your circumstances from their panel of trusted lenders. The exact APR you’re offered will depend on your personal situation and is subject to status and affordability checks.
Representative Example:
Borrow £6,500 over 5 years with a £0 deposit.
Representative APR: 20.5% (fixed).
Monthly payment: £167.88.
Option to purchase fee: £10.
Total cost of credit: £3,582.80.
Total amount repayable: £10,082.80.
Can I get car finance as a young driver?
Yes! While it can be more difficult to get car finance as a young driver, once you’ve turned 18, you can apply for a quote. At Autedia, we work with a wide panel of lenders who can help people with a variety of different circumstances to get a suitable car loan, including young drivers. We’ll always try to help you find a competitive deal that suits your needs.
How old do I have to be to get a car loan in the UK?
You must be at least 18 years old to be able to apply for a car loan in the UK. However, it can be difficult to secure car finance as a young driver for many different reasons including your credit history and employment status. Even so, there are different car loan options available such as joint car finance or guarantor car finance that could increase your chances of finding a loan approval while you’re under 21.
Can I get car finance if I’m under 21 years old?
Yes, you can legally apply for car finance in the UK as soon as you turn 18. However, that doesn’t mean that your application will be approved. There are many reasons why lenders can be reluctant to offer loans to young drivers, especially those who are under 21:
- No credit history
- Higher rate of accidents
- Lack of income
No credit history
No credit history
As a young adult you won’t have had the same opportunity as an older person to build up a credit history that can show lenders how you might act as a borrower. This makes you an unknown quantity for lenders and potentially a higher risk. As you won’t have evidence that you’ve successfully managed a loan in the past, lenders can’t be sure whether you’ll make your payments on time or are more likely to default.
An older driver who has had several different types of loan in the past, made their payments on time, and managed their finances responsibly is more likely to have a good or excellent credit score that can help them secure car finance.
Higher rate of accidents
Higher rate of accidents
Unfortunately, it’s a statistical fact that young drivers are more likely to have accidents on the road. In fact, 47% of road accidents reported in the UK involving drivers aged between 17 and 19 involved casualties. 10% of new drivers also have a crash within six months of passing their driving test. These numbers can make lenders wary and view you as a higher risk borrower than an older driver.
Lack of income
Lack of income
No matter whether you’ve chosen to study at college or university, complete an apprenticeship, or go straight into full-time work, it’s likely that you’ll have a limited income if you’re under 21. Higher salaries often require qualifications and experience; in fact, even the UK minimum wage is lower for those aged under 22.
This lack of income can affect the amount you’re able to afford to pay towards a car loan, restricting your finance options and your eligibility.
Can I get student car finance?
Yes, at Autedia, we work with lenders that can offer student car finance. We understand that having access to a car might be essential while you’re studying, whether you need to commute to university, drive to a part-time job or placement, or visit friends and family. However, if you’re under 21 and don’t have a steady income, your loan options can be more limited. Some lenders on our panel will ask that you have a part-time job or have a guarantor to minimise risk.
Car finance for 18-year-olds
While 18-year-olds are legally adults, can vote, buy a pint of beer at the local pub, and apply for car finance, it can still be difficult for a young driver to secure a loan.
You may be more likely to find young driver car finance if you have a full or part-time job, appear on the electoral roll, and have started building a credit history. While you should never take out more credit than you can afford, having a mobile phone contract or a credit card that you pay off each month could help to improve your score
Car finance for 19-year-olds
If you’re 19 years old and looking to apply for car finance, you might find it easier to secure a loan than an 18-year-old, but approval is still not guaranteed.
It all depends on your current financial circumstances and the credit history you’ve been able to establish since turning 18.
Car finance for 20-year-olds
Once you’ve turned 20, you may have spent the last two years building a strong credit score and this could make it easier for you to find a young driver car loan.
Car finance for 21-year-olds
Young drivers aged 21 or older are more likely to be eligible for car finance. This is typically the age when lenders become more willing to offer you a loan, especially if you’ve built a solid credit history and have left full-time education to enter full-time employment.
Car finance for new drivers
Congratulations! You’ve just passed your driving test and looking to buy your first car. If you’re looking for car finance for new or first-time drivers, you may well be one of the 70% that are under 21. In this case, it can be more difficult to secure car finance as a young person, but it’s not impossible.
If you’re looking to buy your first car, your account manager can guide you through the full process. They can help you sort out all the paperwork, speak with your lender, and help you find a car from a reputable dealership.
Types of young driver car finance
- Hire Purchase (HP)
- Personal Contract Purchase (PCP)
- Personal Loan
- Joint Car Finance
- Guarantor Car Finance
Hire Purchase (HP)
Hire Purchase (HP)
Hire Purchase (HP) car finance is a type of loan that’s secured against your new car. You’ll borrow the full purchase price of the vehicle, minus any deposit, and then repay the loan (plus interest) in fixed monthly repayments for a period of one to six years. Once you reach the end of the agreement and pay the small ‘Option to Purchase’ admin fee, the car will be all yours.
Personal Contract Purchase (PCP)
Personal Contract Purchase (PCP)
Personal Contract Purchase (PCP) loans are like HP but have more options at the end of the agreement. You also won’t have to borrow the car’s full value; instead, you’ll borrow the amount of value it will lose during the loan term. This can make your monthly repayments lower. However, you won’t automatically own the car when the agreement ends. Instead, you can:
- Hand the car back and walk away
- Buy it by paying the one-off balloon payment (the outstanding value of the car)
- Use any positive equity in the car as a deposit for a new loan
Personal Loan
Personal Loan
A personal loan works differently from other types of car finance as it will not be secured against your new car. As soon as you receive the funds and pay the car’s seller, it’ll be all yours. This does mean that you might face higher monthly repayments, and personal loans are often only available to people with good credit scores as they represent a higher risk for lenders.
Joint Car Finance
Joint Car Finance
Joint car finance can be a good option for young drivers who are looking to enter a finance agreement with a parent, close friend, or partner. Not only does this option take both applicants’ salaries into account (improving your affordability), but it also looks at both your credit scores. If your co-applicant is an older driver who has built a good credit score over time, this could improve your chances of securing a car loan.
However, keep in mind that joint car finance agreements will be in both applicants’ names, and you’ll be responsible for the entire monthly repayment, not just your half, if the other person fails to pay. Falling behind with repayments will also affect both your credit scores and could make it harder to secure a loan in the future.
Guarantor Car Finance
Guarantor Car Finance
Guarantor car finance is a popular option for young drivers as it involves a third-party who agrees to step in and cover your loan repayments if you can’t. This person is known as a guarantor and needs to be over 21, have a good credit score, and be a homeowner. As they are taking on a serious financial responsibility, guarantors are usually the main borrower’s close friends or family members.
Adding a guarantor can reassure lenders that the loan will be repaid, even if you have no credit history. This type of car loan can also help to improve your credit score if you keep up with your repayments and don’t need the guarantor to step in.
How can I increase my chances of getting young driver car finance?
While it can be more difficult to get young driver car finance when you’re aged under 21, there are steps you can take to improve your eligibility:
- 1. Get a job
- 2. Improve your credit score
- 3. Allow open banking
- 4. Apply with a car finance broker
1. Get a job
1. Get a job
If you’re a student or have recently left education, securely a full or part-time job could boost your eligibility and show lenders that you have a reliable source of income. The more disposable income you have available, the more likely you’ll be able to afford a car finance payment. You could also save as you work so that you can put down a larger deposit and reduce the amount you need to borrow to buy a car.
2. Improve your credit score
2. Improve your credit score
You can’t take out a credit agreement until you’ve turned 18, but as soon as you are of age, you can start taking steps to improve your score. Registering on the electoral roll can help, as can taking out a mobile phone contract or credit card and paying off the full balance each month. It’s important that you don’t take out more credit than you can afford – falling behind with repayments can harm your score – but having evidence that you can successfully manage different types of credit could increase your chances of finding a car loan.
3. Allow open banking
3. Allow open banking
Open banking isn’t an option with all lenders, but it can help people with no credit history or a bad credit score to secure a car loan. When you agree to open banking, you’ll give a lender permission to investigate your finances. This can give them a clearer picture than your credit score and will be more up to date. If you have a good income and don’t use an overdraft, for example, but have not yet built your credit, open banking can reassure lenders that you can afford a loan.
4. Apply with a car finance broker
4. Apply with a car finance broker
Through Young Car Driver you have access to a wide panel of lenders. This means we can look to find loans for people with different financial circumstances, including young drivers. We’ll always find you the best available deal from that panel, and applying to get a no obligation quote will not impact your credit score.
Will applying for car finance affect my credit score?
No, when you apply to get a car finance quote with Autedia, we’ll carry out a soft credit check to assess your eligibility. This will be listed on your credit report but won’t be visible to any lenders and should not affect your credit score.
It’s only if you are approved in principle and choose to proceed to the next step that a hard credit check will take place. This check will be marked on your credit report and be visible for up to a year.
If you’re a young driver and your application has been rejected due to your lack of credit history, or any other reason, this won’t affect your credit score.
Can I get young driver car finance with no credit history?
As a young driver, there are many reasons why you might have little or no credit history. If you’ve just turned 18 or have never had a form of credit before, lenders will not have any data available to tell them how you might act as a borrower. This can make it more difficultto get young driver car finance. However, there are alternative options if you find yourself in this situation, such as guarantor car finance.
What are the best cars to finance for a young driver?
When looking for the best car and finance deal for a young driver, it’s important to consider how much you can afford to pay, how much it will cost to run the car, and how you’ll need to use it. Don’t forget that owning a car will mean paying for insurance, fuel, road tax, servicing, repairs, and more! A smaller or more ‘sensible’ used car may also be cheaper to insure for a young driver.
- Buy a city car
- Buy a supermini
Buy a city car
Buy a city car
Popular city cars include the Toyota Yaris, Peugeot 108, and Volkswagen UP. These cars are made for narrow streets and tight parking spaces. They are also surprisingly affordable, making them a great choice for young drivers on a budget. Unfortunately, their small size does mean that passengers in the back seats might feel the squeeze, and you may not have a lot of boot space available. Even so, the low insurance premium, fuel economy, and overall affordability make a used city car an ideal first car to finance.
Buy a supermini
Buy a supermini
Despite their name, superminis are slightly larger than most city cars. Models in this category include the Ford Fiesta, Vauxhall Corsa, and Volkswagen Polo. These are bestsellers in the UK for good reason; they’re easy to drive, affordable, and offer generous interior space. This makes them an ideal choice for young drivers with families. However, as their purchase price is often higher than city cars, you may need to buy an older used model to stay within your budget.