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Can Young Drivers Get Car Finance?

Are there car finance deals for young drivers? Yes! If you are already 18 years old, you can apply for car finance and buy the car you want. But before you get too excited, you should first learn as much as you can about the process of getting car finance so that you know what to expect. 

Can a 17-Year-Old Get Car Finance?

You may have already taken your driving test and passed. Surely, you’re thrilled and feel ready to buy your dream car. However, as a 17-year-old, you’re not yet legally allowed to enter into a car financing agreement. You need to reach the age of 18 first before you can apply. You can still buy a car but you have to pay in cash. The best route for you would be to wait a bit until you’re 18 and then you can go ahead and apply for car finance. 

Can an 18-Year-Old Get Car Finance?

If you’re already 18 years old, you’re now eligible to apply and get car financing. There are a few roadblocks though. Since you are young, it’s highly likely that you don’t have enough credit history yet, and therefore, your credit score would be low. Your employment would also matter. If you’re employed, even part-time, that would give you a higher chance of getting approved. Some lenders, such as Carmoola, only lend to people over the age of 21, so keep an eye out for that too, and work hard on building your credit profile in the meantime!

Challenges for Young Drivers 

If you’re asking whether young drivers can get car finance, the short answer here is yes. However, it’s not that simple. There’s a huge chance that your application might be turned down. But you also need to understand this situation from the perspective of car finance companies. Here are some of the reasons why you might not get car finance. 


Unfortunately, statistics show that there is a high occurrence of accidents involving younger drivers. Accidents are more likely to happen especially if there are young passengers in the car as well. 

The reason for this is that younger drivers often overestimate how well they drive. And when there are other people in the car, they can be easily distracted. Of course, this is not true for all young drivers but this could be the reason why some lenders are hesitant to grant car financing to 18-year-olds. 

Credit History

Since you are young, you don’t have much to show on your credit history. Maybe you’re still a full-time student so you also don’t have a steady income. Entering into a car finance agreement means you should have the capacity to pay a fixed amount every month for a set number of months. Your credit history will be the basis of the car finance company’s decision on whether you will be capable of making payments on time. 

Steady Income

Only a small number of people have a steady income at age 18. Lenders want to make sure that you will be able to pay them back if they grant you a loan. However, if you are employed or have a business that provides you with ample regular income, you can provide a bank statement that will prove to lenders that you can pay them back. 

Get a Guarantor for Your Car Finance

So, what if you don’t have a regular income, a low credit score, and no credit history? There’s still a way for you to get car financing. You can do this by getting a guarantor. The guarantor can be your parents or relatives who have excellent credit scores. 

With this type of car finance, you will still have to pay the lender yourself. However, since you have a guarantor, they will be responsible for making sure the loan gets paid in the event that you won’t be able to. 

Lenders are more likely to grant you car finance if you have a guarantor because it reduces the risk of failed or missed payments. If this is the route you want to take, start by making a list of possible guarantors and then talk to them if they are willing to vouch for you. 

Choose a Practical Car

When your car finance application has been approved, you could be tempted to buy the best car in the dealership. However, you should assess your finances realistically first. How much can you set aside every month for the payment? 

You may choose to get a brand new car but maybe you can consider getting a second-hand vehicle instead. It would be more affordable and most used cars still look great and run excellently. You may have to do the checks first to make sure it’s in top condition but that’s nothing compared to the money you get to save with a used car. 

Pay a Substantial Deposit

You may have been saving for a car for some time now. That’s good! Even if you don’t have the full amount to buy a car with cash, you can pay a substantial deposit upfront. If you do this, the amount you have to pay monthly will be reduced. Make sure you save some of your money for insurance, fuel, and possible repairs and maintenance expenses along the way. 


It can be challenging for young drivers to get car finance. If you can wait until you’ve built good credit history and earned a high credit score, that means you will have better car finance deals to choose from. 

There are lenders who specialise in providing credit for clients with low credit scores, however, the interests are usually high. You may choose to take those deals but if you really want to save money on this car purchase, waiting for the right time isn’t so bad. 

If you don’t want to wait for a long time, you can always get a guarantor to back you up. It will increase your chances of getting car finance. Check with your parents or relatives if they are willing to be your guarantor so that you can apply for financing. 

Having your own car is exciting. But as you may already know, it comes with its own set of responsibilities. Make sure that you understand your obligations as a young car owner. 🚙

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