Why Have I Been Refused Car Finance?

Getting turned down for car finance can be frustrating, especially when you're not sure why it happened or what to do next 🤔

There are a few common reasons why your application might not have been approved.  Understanding these is crucial if you’re looking to improve your chances of securing car finance in the future.

Here we’ll reveal some of the most common reasons your car finance application may be rejected 👇

Want to explore a specific reason? Why not jump to:

You have a poor credit score

A common reason for being refused car finance is a poor credit score. Lenders look at your credit history to decide how risky it is to lend you money.

If your score is low, it may be a sign to a lender that you’re more likely to miss payments. But don't lose hope! A low credit score doesn't always mean you can't get finance.

Some lenders, like Carmoola, understand that your past doesn't always define your future, especially if you've been taking steps to improve your credit score.

Also, remember that different lenders have different acceptance criteria. Just because one lender says no, it doesn't mean they all will.

You don’t meet the age requirements

Age matters in car finance, and most lenders have a minimum age requirement of 18 years old.

However, it’s not just being old enough that counts. If you're quite young and don’t have much credit history, lenders can also see this as a risk.

They prefer lending to people who've had time to build a solid credit history.

On the flip side, if you're older, lenders could have concerns too. They often look at things like job stability and retirement age.

Make sure you check the age requirements with each lender before you apply, along with other eligibility criteria.

More car finance guides

You have made multiple applications

Applying for car finance multiple times in a short period can be a red flag for lenders and multiple ‘hard’ credit checks can have a negative impact on your credit score.

Every time you apply for finance, it can leave a mark on your credit report. Too many of these ‘hard’ searches, especially in a short time, can lower your credit score.

One well-thought-out application is better than several rushed ones.

It’s better to do your research first by using free tools and calculators to better understand what different lenders are looking for and choose the best match for you. 

Running multiple ‘soft’ searches will not negatively impact your credit score.

You don’t have a driver’s license

Having a driver's license is one of the most important requirements when applying for car finance.

It seems obvious, but it's a common oversight.

Lenders want to make sure you can legally drive the car you're financing. Without a license, they won’t be confident about lending you money for a car.

A license also helps to prove your identity, which is another thing lenders check before providing car finance.

Get approved for car finance with Carmoola

We understand that your situation is unique. That’s why we look at each application on an individual basis when making a decision on lending.

Our goal is to provide fair, easy and accessible hire purchase car finance to suit everyone.

We're here to work with you. Whether it’s understanding your financial history or considering your current situation, we aim to provide a personalised experience.

You can work out your repayments before applying with our budget calculator, and everything is done through our amazing app.  No more hassle with endless paperwork and phone calls.

If you've faced hurdles with car finance in the past, talk to us. Let's see how we can help get you on the road in your dream car 😘🚗

FAQs About Getting Refused for Car Finance:

What happens if you get rejected for car finance?

If you're rejected for car finance, it's usually because the lender has concerns about your creditworthiness. You should check your credit report to understand any issues and work on improving your score.

Why is it so hard to get car finance?

Getting car finance can be challenging due to factors like a low credit score, unstable income, or lack of credit history. Lenders assess these as risk indicators when approving finance applications.

How good does my credit score need to be to get a car on finance?

While there's no universal credit score requirement for car finance, a higher score generally improves your chances. Each lender has different criteria, but a good credit score often means better finance terms.