Whether you’ve decided to make a permanent move to the UK, are planning to spend a few years living and working here, or are returning home after time spent abroad, you might be hoping to get the keys to your own car as soon as possible.
Unfortunately, it’s not always easy to qualify for car finance as a new UK resident. While different lenders can have different eligibility requirements, most will ask that applicants have at least three years' address history in the UK to qualify for a loan.
That doesn’t mean it’s the end of the road if you’ve only recently arrived. Specialist lenders do exist and there are alternative options to explore that could help you get behind the wheel even if you’re relatively new to living in the UK.
Carmoola will accept applications from customers who have been in the UK less than 3 years. However, we will need to see proof of income and also a strong credit history, which is often the difficult part as it can take a while to build up your credit profile when you arrive in the UK.
To be eligible for a loan with Carmoola you need to be a UK resident now, and plan to live here throughout the duration of your agreement with us. The best way to find out if you'll get approved is to apply in the app.
If you've only ever lived at 1 address in the UK, please keep the box ticked for "I have lived here more than 12 months" to continue your application.
Step one is to complete our quick and easy application form and share a few details about yourself.
These details include:
We’ll also run a soft credit check to assess your eligibility. This won’t impact your credit score, even if we can’t find you a loan that suits you right now.
While different lenders might ask for different documents, if you’re applying for a Hire Purchase (HP) or Personal Contract Purchase (PCP) deal, you’ll likely need to supply:
During the car finance application process, it’s the lender’s job to make sure the finance they offer is right for you and that you’ll be able to make payments in full and on time.
It’s all about risk; the details you supply in your application form along with a soft credit check will paint a picture of how you might act as a borrower. Having three years’ address history forms part of this risk assessment and helps reassure lenders that you’ve been a UK resident for a while and aren’t likely to leave midway through your new agreement.
Affordability checks are also important. The lender will look at your monthly income and how much you need to pay out to cover your essentials to work out how much disposable income you have left over. If your budget will be too stretched by adding a car finance payment into the mix, they probably won’t be able to offer you a loan.
If you’ve just immigrated to the UK or moved back after spending time living and working abroad, you’ll likely need to wait a while before getting car finance.
While there’s nothing stopping you from applying at any time as soon as you have a UK address, most lenders won’t offer finance to people who have lived in the country for less than three years.
If you’ve not got three years’ address history in the UK yet, or you’ve been refused finance for any other reason, don’t panic; there are alternative options available:
Buying a car outright in cash is the cheapest way to get a new set of wheels and doesn’t require a credit check or comprehensive address history. You’ll still need to have a UK address to register the car, but if you have enough money to pay for your car in cash or can save up over time, you could be back on the road in next to no time!
A lease could help you get behind the wheel without the extra checks that can be required with car ownership. Keep in mind that you might need to apply with a company who specialise in offering leases to people without an extensive address history in the UK, but you might be able to have access to a car for months or even years in return for a monthly repayment. Mileage restrictions will likely also apply.
Sometimes it’s better not to go it alone, especially if you’re new to the UK. If you have a family member or partner who has been resident in the UK for several years and has a good credit score, teaming up with them on a car finance deal could be an option.
With joint finance, you’ll both co-sign the loan and be responsible for making the monthly repayments.
With guarantor finance, you'll appoint someone with a good credit score as a guarantor. This person must agree to step in and cover your repayments if you can't make them. Some lenders will also ask that your guarantor is over 21 and a homeowner.