Can I Get Car Finance if I’m Unemployed?

Getting car finance when you don’t have a regular income can be tricky, but it’s not impossible. In this guide, we look into what the options are for getting a car loan when you’re unemployed, and how you can improve your chances of qualifying for a loan and finding the best car finance deals.

Car finance when you’re unemployed

It may be that your unemployment is just a temporary situation. Perhaps you are in between jobs and need a car to help make your job search easier.

If you have a strong employment history, it can improve your chances of qualifying for car finance. Each car finance lender will assess your situation and the risk of giving you a loan, and some may be happy that your unemployment is only temporary.

If you don’t have a strong employment history, it can be more difficult to find a lender that will give you a loan. Either way, without a regular income, you may find that the car finance deals available to you have higher interest rates, to mitigate the risk.

It may be that you do have a regular income source that doesn’t come from employment, such as from renting properties. In this case, car finance lenders may be more likely to give you a loan, as long as you can prove that it is reliable and steady and is declared on your tax return.

Can I get car finance if I’m on benefits?

You can qualify for car finance if you’re on benefits. However, you will need to prove that your income will cover your payments, so it may be beneficial to look for cheap car finance, which will often be for used vehicles rather than brand new.

Can I get car finance if I’m retired?

If you’re retired, you will probably receive a regular pension. Car finance lenders will view this as a regular income, so you can still qualify for car finance. You may have multiple sources of income, such as a state pension, workplace pension, and maybe rental income or part-time work. You should make sure to gather proof of all your income streams to help get you the best car finance deal available to you.

How can I get a car loan if I’m unemployed?

There are a few steps you can take to improve your chances of qualifying for car finance and to help secure you the best deals.

Improve your credit score

Improving your credit score can be a great way of getting car finance when you’re unemployed. Most car finance lenders will look at your credit score as an indication of how well you will be able to make the repayments for your loan. So, having a good score will show you are reliable for paying your bills and debts.

You can read about your credit score and car financing in our Why is My Credit Score Important When Buying a Car guide.

Use a guarantor

Using a guarantor for your car finance can reassure lenders that the payments will be made even if you personally aren’t able to make them. Not all lenders offer car financing with a guarantor, so you may need to shop around to find a suitable lender.

A guarantor will sign an agreement that says they will make payments if you are unable to. They should be someone that you trust, such as a close friend or family member. To qualify, they will need to have a good credit score and credit history and will usually need to have their own regular, steady income.

You should ensure your guarantor understands all the risks of being your guarantor, namely that their credit score could be negatively affected by being financially linked with someone that has bad credit. Their score will also be negatively affected if they end up having to make the debt payments and they can’t repay.

Pay a large deposit

Paying a large initial deposit for your car finance can help to give the lender security. You will owe less money once you have paid the deposit, so the smaller amount you owe will mean less risk for the lender. If you have the funds to make a large deposit, it can help to secure your car finance.

GetCarFinanceHere can help you to find car finance if you’re unemployed and can even find bad credit car finance. Our expert team will find the best deals available to you from our network of lenders, to get you the cheapest quotes. You can apply for car finance online today.