Advice and Tips

Can I Get Car Finance If I’m Unemployed

Advice and Tips // 12 April 2016

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When you’re unemployed applying for jobs can seem a real challenge, especially when you feel limited to jobs you will be able to commute to without the use of a car.

As of March 2015, there were 1.83 million registered unemployed people in the UK. The reality for many of these people is that they do not live in an area where work is easily accessible without the use of a car.

Can I get car finance without a job?

Typically, those who are unemployed will refused car finance or find that finance lenders are often quite averse to giving out car finance to them. This is fairly understandable, as if you’re between jobs or on certain kinds of benefit, you will typically find it harder to repay your finance and you will therefore be seen as a bigger risk.

However, everyone’s situation is different. You might find that in your circumstances , you may still be approved for car finance, even without a job.

Unemployed with good credit

Being unemployed doesn’t necessarily mean that you will have poor credit. You might be unemployed because you’re in between jobs, a stay at home parent, or because you’re  going through a career change.

In this instance, you may still need a car – the school run can become quite tricky without one. But if you still have a good credit history, it is likely that many lenders will happily accept you. Usually on the condition that you are able to prove you can repay the car loan. Increasing the deposit you are willing to pay  can often help reassure lenders that you will be able to repay any finance.

Can I get a car loan if I’m on benefits, such as Job Seeker’s Allowance?

This depends entirely on what sort of benefits you are receiving. Some benefits can be included as part of your income, giving you a higher chance of being accepted by a car finance lender. For example, financial lenders can quite often accept carer or disability payments as a proof of income.

Job Seeker’s Allowance can also contribute towards your provable income. Anyone can apply for JSA if his or her period of unemployment lasts for over 6 weeks. If your claim is approved and you begin to receive JSA, this will give you a weekly income until you find employment. However, part of the JSA agreement requires that you be expected to travel up to 90 miles for work, so a requirement for car finance can become even more important.

Bad credit car finance lenders

There are many lenders who specialise in providing car finance to people who have a poor credit history, Moneybarn is a prime example of this. It is important to bear in mind that most finance companies will only lend money if you have been in employment for at least or have a guarantor who is willing to guarantee a car loan for you.

Obtaining car finance without a job will inevitably mean that you will pay higher rates of interest than if you were in full-time employment, but the opportunity to obtain a car to help you secure a job is often the first step along a path towards a better financial future.

If you’re without a job and need car finance, contact Moneybarn today to see how we might be able help.