Can I get Car Finance if I am Unemployed?
You Don’t have to be employed to get Car Finance
How do you know which lenders might provide car finance for your situation? There is no point in applying to a lender that doesn’t offer unemployed car finance.
Being unemployed and wanting to buy a car on finance can be challenging without a reliable income. However, depending on your circumstances, getting a car loan when unemployed is doable, especially for those receiving a pension or benefits and a good credit score or an upfront deposit makes securing a car finance deal easier.
Whether you are on Benefits, Receive a Pension, Work Part-time, are a Student or are Self-Employed, there is probably a car finance deal for you.
No matter your circumstance, it may be possible to secure a car finance deal if, like most people, you can’t afford to pay cash.
Alternatively, we work with lenders who could offer joint car finance or car finance with a guarantor.
Click the link below that best matches your situation to find out more.
Car Finance on Benefits
Receiving benefits does not prevent you from taking out a car loan. You only need to see below to realize how many people in the UK receive some form of benefit.
When you apply for car finance with benefits, you’ll still need a primary source of income. Some benefits are counted as the primary income, while others are considered additional income.
If you are on any of the following, they can be a primary source of income when applying for car finance.
- Carers Allowance
Other benefits are seen as additional income. You must have either an income, pension (state or private) or one of the three benefits (above) to be eligible for car finance on benefits.
Other benefits are additional income and counted as part of your total income.
- Child Tax Credits
- Housing Benefits
- Income Support
- Universal Credit
- Working tax credits
For those on Universal Credit, designated as additional but not a primary income, you’ll need a separate income, pension, or one of DLA, PIP or Carers Allowance to apply for car finance with benefits.
Retirement Car Finance
Car finance is undoubtedly an option for a retired person on a pension. Whether in employment or retirement, your credit history, income and affordability are what lenders access for car finance. As a retired person and not in work doesn’t mean you don’t have an income. A state or private pension, interest on savings, a hobby that brings in money or investments such as rent from the property all count.
You could opt for unsecured finance such as a personal loan; however, car finance, where the finance is secured on the vehicle, is likely easier to get.
Part-time Employment Car Finance
With part-time employment, you might not think you’ll get approval for car finance because you don’t work full-time. The good news is the lender is not interested in the number of hours you work – it’s how much you take home and proof of a reliable income that matters. Assuming you can prove affordability with the monthly repayments, you’ll likely get approved for a car finance deal.
Student Car Finance
Driving is often cheaper than trains and buses, so a student wanting car finance for a reliable runner is a no-brainer — no more hanging around on cold platforms.
However, getting student car finance can be challenging as most students are between 18 and 22 old, so they likely lack a decent credit history. You’ll improve your car loan chances with a regular part-time job.
An alternative option is to enlist the help of a parent or other family member and take out joint car finance together.
Self-employed Car Finance
Nearly 20% of UK workers are self-employed, so many cars wouldn’t be sold if you couldn’t get self-employed car finance. Lenders are more cautious when you can’t show a consistent regular monthly income, and although interest charges may be higher, being self-employed shouldn’t stop you from getting finance. Thanks to the growth in self-employment with greater demand for car finance, lenders have become more effective at lending to self-employed people.