Car Finance for young drivers

Once approved for finance, you’re free to choose a vehicle from any reputable UK dealership. 

three £ symbols and five cars representing car finance for young drivers
green cartoon car in shopping trolley representing buy a car from any reputable car dealer

Get your car finance first with Young Car Driver in partnership with CarFinance247

Getting your car finance in place – before contacting the dealer – can put you in a stronger position when you come to negotiate the purchase.

It also helps you avoid getting carried away in the heat of the moment at the dealership and ending up with a complicated finance deal that may not be right for you.

Get your car finance the easy way

Young Car Driver increases your chance of finding a great car finance deal by searching the market for you.

At what age can you get car finance?

You can get a car finance deal from 18, although it won’t necessarily be only in your name. Once you hit 21, it becomes significantly easier to be offered finance!

green 18 in a blue circle
red no entry sign representing no credit for 17 year olds

Can a 17-year-old get a loan for a car?

No. Sadly, getting car finance in your own name isn’t possible as a 17-year-old. This is because you’re not legally allowed to sign a credit agreement until you’re 18! You can drive a car, but you can’t finance one – go figure!

However, this doesn’t mean it’s impossible to get a car at 17, but you may need to lower your expectations. If you’re desperate to get yourself in a vehicle as soon as you pass, consider buying a used car with cash, either from your savings or from the good old bank of Mum and Dad!

Car finance for 18-year olds

You’re 18! Not only can you now have a guilt-free drink at the pub, but you can also be accepted for car finance. Be aware though, just because you’re 18 doesn’t guarantee that you will get accepted for finance.

To increase your chances, you need to have a solid credit rating. You can build this up by paying for your own mobile phone on a contract, taking out a credit card and clearing it every month. It’s also worth making sure you’re on the electoral roll.

Having no credit history is almost as bad as having a terrible one, so start building it ASAP and increase your chances of getting good car finance deals.

You also have a better chance of getting a finance deal if you have been employed for a considerable amount of time, around 6-12 months. Having a job reassures the Lender that you can pay for the car and that you have a secure job.

If the Lender still isn’t convinced, all hope isn’t lost – it’s common for lenders to offer a joint application, where you take out the car in both your name and that of a parent/guardian name. Also, you can take out a Guarantor Car Finance agreement, where someone will act as the back-up if you can’t make the repayments.

young women in jeans with 18 sign in square green boarder the age you can get a credit agreement
credit score dial in the green zone the score needed by 19 and 20 year olds for car finance

Can a 19 or 20-year-old get a car on finance

Car finance becomes a little bit easier to get accepted for once you get past 18. However, your credit history is still significant. If you’re 18 or 20 with a bad/non-existent credit history, you will struggle to get a deal without a guarantor.

However, if you’ve made an effort to build a credit rating, and have a stable job that provides a regular income, you could have a good chance of getting accepted for finance.

Car finance for 21 year olds and over

Once you hit 21, you’re far more likely to get car finance. At this age, you can apply for various types of finance, including a traditional Hire Purchase (HP) deal, where you pay the car over a certain amount of time. You can also apply for a Personal Contract Purchase (PCP). where you pay a smaller fee monthly but hand the car back at the end.

At 21, you’re more likely to be offered finance even with a poor credit rating. However, you will pay a fortune in interest, and it’s often not worth it -you should still focus on building a solid credit history to be offered the best rates.

hand on calculator to check car finance for 21 year old

Am I eligible for car finance?

Can I get car finance with no deposit?
Whether it’s for a house or not, the word ‘deposit’ can inspire fear in the younger generation.

Thankfully though, getting the best car finance for young drivers isn’t half as tricky as getting your first home, and it’s often possible to get the car you want without a deposit.

In general, deposits aren’t mandatory for car finance. However, just because you don’t need one doesn’t mean you shouldn’t put one down – as tempting as that might be!

If you have some savings available to contribute as a deposit on your car finance, you can end up paying less over each month.

It’s worth working out your total monthly budget for car finance and adjusting your deposit to the car you want. If you can reach that figure without a deposit, then go for it – just be aware you’ll pay more interest.

Another benefit of putting a deposit down is that you can be approved for a better loan with a more generous interest rate. Remember that you can trade your old car in and put that money towards your new car – reducing your monthly payments.

There are lots of lenders out there who will have no-deposit car finance options, so don’t think you will have to save for months and months to finance a car.

What documents do I need for car finance?
Finding the best car finance for young drivers can be stressful. You will have to have some documents handy, like proof of income, utility bills, all while making sure your credit score is solid. As long as you organise, though, financing a car can be painless.

No matter where you are in the UK, the documents you’ll need to make a car finance application are similar. In general, the lender needs to see three things: proof of license, proof of income, and proof of address.


Proof of licence

Proof of license is simple and is exactly what it sounds like – just pass on your driving license details. Likewise, it doesn’t take a genius to figure out what you need for proof of address’ – usually, just a utility bill will do the job.


Proof of address

As with most credit applications, though, you’ll need to be at your address for three years, or you’ll have to provide proof of your previous address. If you’re struggling to find this, the lender can help you out. Each lender has different criteria for what they’ll accept, but it shouldn’t be a big problem.


Proof of income

Finding proof of income can be a little bit more tricky, though, depending on your circumstances. In most instances, you just need your payslips and bank statements, but if you’re self-employed, for example, it can be more difficult, as you may have to juggle statements from personal and business bank accounts.

Of course, the exact documentation you’ll need depends on your lender and can vary – if you have a low credit score, for example, you might need a little bit more information on proof of income to make sure you can make the monthly repayments. If you have had previous driving convictions or bans, you can still get car finance: you might just have to reach out to more lenders.

Remember: no car finance provider will ever guarantee the offer of a car loan. However, they want your business and will work hard to try and get you signed up!

Do I need to be employed to get the best car finance?
Credit income requirements can sometimes be frustrating. For instance, you might be someone who works part-time, but you receive working tax credits, so you can easily afford the payments.

In any case, you will need to demonstrate your ability to make the repayments convincingly.

With most lenders, you’re going to need to be employed in some capacity – whether that’s part-time or full-time. Your total income will greatly impact whether you can be accepted for a car finance deal.

That being said, though, there are lenders out there who can help you if you’re not on regular hours or a salary. For instance, some lenders can offer you deals if you are :

  • A student
  • Self-employed
  • A carer
  • Disabled
  • A taxi driver
  • About to start a new job
  • A housewife
  • An agency worker or freelancer

…and much more. Of course, whether you get accepted or not depends on other factors, like your credit score. But you can rest easy knowing that there are lenders out there who can help: even if you’re not in steady full-time work.

Similarly, there are lenders out there who can offer you a deal if you have a low credit score. Your interest rate will likely be higher, or you may require a deposit, but it is possible!

Is there car loans for students?
You might only work part-time but will be receiving a cheeky student loan for the next few years. Don’t worry. There are car loans for 17-18-year-olds out there!

 If you’re a student, you will admittedly find it harder to get a car finance deal. However, if you have a decent credit rating (maybe you have a phone contract and a few payments on your first credit card), you have a chance!

In general, if your overall income is good, and you can prove a reliable paycheck, you can find lenders who will give you a car finance deal. Just be aware that car finance for students will likely mean you will pay a higher interest rate than if you were a bit older (due to having more income and credit history).

Can I apply for car finance with low income?
Just because you’re in full-time employment, sadly, doesn’t guarantee you a car finance deal. The total amount of income is a huge factor. Don’t stress, though, as you don’t need to be on a fat salary to get a good car finance deal!

As there are so many lenders out there with such different criteria, it’s impossible to put a number on the minimum amount of income required for the best car finance. While some lenders might need loads of payslips, some might not require any – it’s tough to say.

No matter which you apply with, you will have to declare your income and likely support this with documents and evidence. The lender will want to make sure you receive this income regularly and at a consistent amount: meaning that you’re capable of paying the loan back over several years.

It’s important to note that this income doesn’t just mean your full-time employment. Self-employed and part-time/side-job income counts, too!

If you receive working tax credits, child benefits, job seekers allowance, DLA – you can still be considered for a loan. Many lenders consider ‘income’ to be a blanket statement: sometimes, and not worried where it comes from, as long as it’s consistent and of a decent amount to cover the loan!

If you have a larger income, though (congrats!), you’re likely to be offered a lower interest rate, meaning you’ll be less over the long-term. If you’re desperate for a car but are a low-earner, don’t worry: you’ll likely still find a deal to get yourself on the road.

If you have good credit, you may be eligible for some of our lowest rates. We have great finance options for those with less than perfect credit histories, including those with CCJs, defaults, or ex-bankrupts.

Can I get car finance without a driving licence?
If your test is coming up and you’re feeling confident, you might be tempted to sign up for a suitable car loan for young drivers early as motivation. Bold – but you can do it.

The vast majority of lenders will indeed require a full driving license. But there are finance options for those who have provisional licenses – or even no license at all!

However, it’s essential to be realistic and be aware that these kinds of lenders are in the minority. It will become even more important for you to have a good credit score, a high income, and often a deposit in these instances.

Is there an age limit for car finance?
What’s that old saying – age is just a number? It might be, but sadly, you’re not getting a car finance deal if you’re under 18! When you are, though, you’ll probably be able to find a deal, even if you only have a little credit history.

 If you’re looking for a loan for young drivers, the process isn’t any different than if you were an experienced driver. When many younger people find it difficult to find car finance, it isn’t due to their age but their income and credit score.

If you’ve got a decent credit history (and have a credit card or a phone contract, for instance), you stand a good chance of getting a decent car finance deal. Of course, you’ll need to pair this with a decent income, too.

If you’re like most 18-year-olds, though, your bank account is probably reasonably slim, and your credit score is in its infancy. In this scenario, you can apply for something called a guarantor loan.

A guarantor loan is where someone who has a solid financial record (good credit rating etc.) can guarantee to make the credit payments if you fail to. Usually, a parent or guardian – however, this person can’t be any older than 80.

Car finance for young drivers aged 18 to 25+

Car finance is available for most young drivers regardless of credit history. There are many ways of getting finance for your car, of course, the better your credit rating, the lower the interest payments should be.

Car Finance Calculator

As a guide, you can use a car finance calculator to work out how much you can afford to borrow and then it’s just three simple steps to getting your car loan.

The car finance company will search a large panel of lending partners specialising in car loans for young drivers, to find the very best young driver car finance for you.

Once approved for the loan, you will be able to buy a car from any reputable dealer, sign the paperwork and drive away in your new auto.

The 3 simple steps to your car finance

The process of applying for a car loan is easy and stress-free, and the benefits include:

  • Regardless of your credit status a you will be considered.
  • A decision is usually available in minutes.
  • You will get your personal finance advisor.

What if I have a bad credit history?

If you want young driver car finance, but have a poor or bad credit score, don’t worry!

For those with CCJ’s or who are in a debt management plan or even have had credit refused to them!

You might not qualify for a standard loan but could apply for a “no credit check car loan.”

Don’t worry! Although credit checks are required because car finance companies have relationships with many types of lenders, there is usually car finance available for even young drivers with bad credit.

Even having a poor credit rating, you could still be able to buy a car.

What age can I apply for car finance?

You can apply for car finance from 18 years old providing you have a driving licence.

The usual classification of a young driver when they apply for car finance is from 17 years old up to 24 years old.

You can apply for car finance at 17 years old but may need to provide a Guarantor for the loan.

Autedia Limited is an appointed representative (for consumer credit) of Financial Compliance Limited which is authorised and regulated by the Financial Conduct Authority under Firm Reference Number 772721.