Why can't I get car finance

There is usually one main reason why some people can't get car finance and that is linked to their credit report. This is information held about you that reveals your current and past financial relationships. This information is always sought by banks and other financial institutions to help them decide whether to lend a person money in some form or another. If you get in to financial trouble, begin missing payments on loans or utility bills and if you are given default notices, this will all be detailed in your credit report.

If you believe you can't get car finance because of your credit report there are financial institutions who offer loans to people who have a poor credit history. However, these should always be approached with an element of caution as they usually charge a much higher interest rate as insurance against the possibility of you defaulting on your agreement. Where as the average loan rate is somewhere around 13% APR, some bad credit loan companies have APRs of 35% and higher. The best way to improve your credit history is to first check it for any potential errors and then work on keeping your finances in order to help build a respectable credit history. Some companies will consider lending finance to a person whose credit report has improved.

Another possible reason a person cant get car finance is the potential cost of the vehicle. If you choose a car that is on sale at £5,000 it may be that the bank will lend you money but not enough to cover the entire cost of the vehicle in question. Other financial institutions may not agree with the term, for example you wish to borrow over seven years, the bank may prefer a three or five year term. While a finance company is not allowed to reveal the reasons you can't get car finance, you can contact a credit bureau such as Experian, and ask for details of your report, which should tell you why you were unsuccessful.

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