Can I get car finance if I've just moved to the UK?

Whether you’ve decided to make a permanent move to the UK, are planning to spend a few years living and working here, or are returning home after time spent abroad, you might be hoping to get the keys to your own car as soon as possible.

Unfortunately, it’s not always easy to qualify for car finance as a new UK resident. While different lenders can have different eligibility requirements, most will ask that applicants have at least three years' address history in the UK to qualify for a loan.

That doesn’t mean it’s the end of the road if you’ve only recently arrived. Specialist lenders do exist and there are alternative options to explore that could help you get behind the wheel even if you’re relatively new to living in the UK.

How long do I need to have lived in the UK to get a loan with Carmoola?

Carmoola will accept applications from customers who have been in the UK less than 3 years. However, we will need to see proof of income and also a strong credit history, which is often the difficult part as it can take a while to build up your credit profile when you arrive in the UK.

To be eligible for a loan with Carmoola you need to be a UK resident now, and plan to live here throughout the duration of your agreement with us. The best way to find out if you'll get approved is to apply in the app. 

If you've only ever lived at 1 address in the UK, please keep the box ticked for "I have lived here more than 12 months" to continue your application.

How can I apply for car finance?

Step one is to complete our quick and easy application form and share a few details about yourself.

These details include:

  • Your personal information e.g., your full name, date of birth, and marital status
  • Your current address and three years’ address history
  • Your employment status
  • Your monthly income

We’ll also run a soft credit check to assess your eligibility. This won’t impact your credit score, even if we can’t find you a loan that suits you right now. 

What documents do I require to apply for car finance?

While different lenders might ask for different documents, if you’re applying for a Hire Purchase (HP) or Personal Contract Purchase (PCP) deal, you’ll likely need to supply:

  • Proof of ID – such as a passport or a full UK or EU driving licence
  • Proof of address – including utility bills or a Council tax statement
  • Proof of income – such as recent bank statements or payslips

What do lenders check?

During the car finance application process, it’s the lender’s job to make sure the finance they offer is right for you and that you’ll be able to make payments in full and on time.

It’s all about risk; the details you supply in your application form along with a soft credit check will paint a picture of how you might act as a borrower. Having three years’ address history forms part of this risk assessment and helps reassure lenders that you’ve been a UK resident for a while and aren’t likely to leave midway through your new agreement.

Affordability checks are also important. The lender will look at your monthly income and how much you need to pay out to cover your essentials to work out how much disposable income you have left over. If your budget will be too stretched by adding a car finance payment into the mix, they probably won’t be able to offer you a loan.

How long do I have to have been in the UK to apply?

If you’ve just immigrated to the UK or moved back after spending time living and working abroad, you’ll likely need to wait a while before getting car finance.

While there’s nothing stopping you from applying at any time as soon as you have a UK address, most lenders won’t offer finance to people who have lived in the country for less than three years.

What other options do I have if I can’t get car finance yet?

If you’ve not got three years’ address history in the UK yet, or you’ve been refused finance for any other reason, don’t panic; there are alternative options available:

Pay in cash

Buying a car outright in cash is the cheapest way to get a new set of wheels and doesn’t require a credit check or comprehensive address history. You’ll still need to have a UK address to register the car, but if you have enough money to pay for your car in cash or can save up over time, you could be back on the road in next to no time!

Choose a short-term lease

A lease could help you get behind the wheel without the extra checks that can be required with car ownership. Keep in mind that you might need to apply with a company who specialise in offering leases to people without an extensive address history in the UK, but you might be able to have access to a car for months or even years in return for a monthly repayment. Mileage restrictions will likely also apply.

Consider joint or guarantor finance

Sometimes it’s better not to go it alone, especially if you’re new to the UK. If you have a family member or partner who has been resident in the UK for several years and has a good credit score, teaming up with them on a car finance deal could be an option.

With joint finance, you’ll both co-sign the loan and be responsible for making the monthly repayments.

With guarantor finance, you'll appoint someone with a good credit score as a guarantor. This person must agree to step in and cover your repayments if you can't make them. Some lenders will also ask that your guarantor is over 21 and a homeowner.

FAQs on car finance for new UK residents

Can I get car finance without a credit history?

One of the downsides of moving to the UK from another country is that your credit history won’t come with you. No matter whether you had a perfect track record in the past and were a model borrower, you’ll be starting over from scratch.

If you don’t need a car straight away or can pay for it outright in cash, you may be better off taking some time to build your credit before applying for car finance. No time to wait? It’s not impossible to get car finance with little or no credit history but it can be more difficult. There are lenders who specialise in bad credit car finance.

Can I get car finance without a credit check?

Both soft and hard credit checks are an important step in the car finance process. Not only do they help lenders understand your financial situation and payment history, but they also protect you from being given a loan that isn’t right for you and could stretch your budget too thin.

Most car finance providers will run a soft credit check when you apply. This lets them assess your initial eligibility and whether they can offer you a loan. If you choose to proceed, a hard credit check will take place. This will be marked on your credit report for up to two years. Keep in mind that, while soft credit checks shouldn’t impact your credit score, having too many hard searches in a short time could negatively affect your score.

Can I buy a car without a permanent residency in the UK?

While you don’t necessarily need to live full-time in the UK or be a UK citizen to buy a car, you do have to have a UK address. You’ll also need to make sure you register, insure, and tax your vehicle in the UK to be able to legally drive on public roads.

How can I register a car without a permanent address in the UK?

Becoming a car’s registered keeper, even if you’re not its legal owner, means you’re responsible for its upkeep, MOT and service, and any penalties for things like speeding or parking in the wrong place. However, if you don’t have a permanent address in the UK, you won’t be able to register a car.

How long do I have to live in the UK to get car finance?

Each individual lender has different eligibility requirements but generally speaking, you’ll need to have lived in the UK for at least three years to qualify for a car finance agreement.