How do I qualify for low rate car finance

This is a question we regularly get asked, Understanding your credit record here is very important, as knowing your credit score is vital to understanding what rates you may be given when applying for car finance. We will try and explain about risks when it comes to lending and why a lender may not offer you their best rates.

Example 1 - John - Managing Director -
Credit Record Score 999, Earns £60,000pa , never missed a payment for credit.
John has a perfect credit score, and as long as John is not overloaded with credit and can afford a new loan, John will probably qualify for the best rates with a finance company
As long as the loan is affordable) The risk to the lender for johns loan would be very low risk.

Example 2 - Mary - IT Technician
Credit Record Score - 600, Earns £30,000pa - missed a credit card payment 2 years ago.
Mary has a good credit score and would probably get a great rate for a car finance loan, but as she has missed a payment, she may not qualify for the best rates on the market and might have to settle for a higher rate on interest.

Example 3 - Paul - Shop Worker
Credit Score 350 - Earns £18,000pa - had some problems with previous loan and missed his mobile phone payments recently
Paul is clearly struggling when it comes to finance, he is earning an average wage, but appears in some months he doesn't handle his finances as well as possible. He may struggle to get finance as the risks are high and although he may be able to afford a car loan, he may attract a high rate of interest for a loan.

Example 4 - Charis Benefits
Credit Score 200 - Income £1900pm  single mum - she has not had the best of times when it comes to credit, she's missed a few payments and has received a CCJ in the past 18 months, she will probably be declined for car finance based on her history with credit in the past.  Lenders would determine that there is an extremely high risk of her not paying the monthly payments off a loan and would probably decline her for a loan.

ALl these examples are imaginery scenarios and each application for finance is unique in itself,  the examples are for guidance only, but are there to show you what rates you may be given dependant on your situation.