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5 reasons why your car finance has been refused

So, your finance application has been turned down and you aren’t sure why? Here are five of the most common reasons why your car finance has been refused

Written by Verity Hogan
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Credit history

While your credit history isn’t the only thing that lenders look at, it’s still an important factor. If you’ve had late or missed payments in the past, your credit might have taken a knock. Having bad credit doesn’t mean you won’t be able to find finance, but it can limit the number of lenders who can help. Never had credit before? A limited or non-existent credit history can also make it more likely you’ll be refused car finance. This is because lenders can find it tough to know what kind of borrower you’ll be.


Affordability checks are an important part of being a responsible lender and they’re becoming a part of the finance process that almost all borrowers go through. When deciding whether you can afford the finance you’ve applied for, lenders will look at your monthly income and spending to work out how much money you have left after paying all your essential expenses like your rent and household bills. If the money left over is limited and a monthly car payment could wipe it all out, then your car finance application could be refused.

Employment Status

The good news is that, whether you’re employed full-time or part-time, work for yourself or as a temp, there are lenders that can help. But if you are self-employed or have an income that changes month to month, it can be harder to find car finance. It’s all about the uncertainty that comes with not having a regular paycheck, and that uncertainty can make some lenders a little more wary. So, instead of payslips, lenders might ask you to show them what your average income looks like by sharing three months of bank statements.


While you can pass your driving test at 17, you might have to wait a little longer to get your own set of wheels. You must be over 18 to take out a car finance agreement and some lenders can’t provide finance for people under 22. There are some limits at the other end of the scale too; some lenders can offer finance to anyone over 18 (subject to circumstances) but others can’t help if you’re over 65. If you are a young driver and you’ve been refused car finance, it could be because you don’t have much of a credit history. There are steps you can take today to help demonstrate you’ll be a responsible borrower. Find out more here


When you’re quickly filling out an application form online on your lunch break or at the end of a long week, it’s all too easy to make a small mistake. It could be as simple as missing a letter in the postcode of your previous address or accidentally mistyped your date of birth. Accidents like this can lead to your car finance being refused, even though the decision might be different if the correct details were considered. The best way to avoid this is to take your time when applying for any form of finance and double-check all the details before you submit.

Looking to find out more about being refused car finance? Learn more here

Verity Hogan

* The UK's largest online car finance broker by unique users to the website. Based on Similar Web data – 1,137,647 to CarFinance 247 vs. 753,819 for nearest competitor. January to June 2023.

CarFinance 247 is a trading name of CarFinance 247 Limited. Registered office: Universal Square, Devonshire Street North, Manchester, M12 6JH. Registered in England. (Registration Number 06035525).

CarFinance 247 is authorised and regulated by the Financial Conduct Authority for insurance distribution and credit broking (Firm Reference Number: 653019). CarFinance 247 is registered with the ICO (Registration Number Z1897658).

Finance is subject to status and is only available to UK residents aged 18 and over. Written quotations are available on request.

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