Check your credit report
If you’re under 21 and not had a job before then you might find that your search for student car finance is restricted by your credit history. In fact, if you haven’t taken out finance before, you might not have a credit history at all! The only way you’ll know for sure is to check. You can check your credit score for free from ClearScore, Experian, and Credit Karma.
And when you do look, you might be pleasantly surprised – even having a mobile phone contract listed on your report could demonstrate that you’re a reliable borrower as long as you’ve kept up with your repayments and paid on time. However, if you don’t have a credit history, there are steps you can take to improve your chances of qualifying for credit in the future including registering on the electoral roll at your student accommodation.
Know your budget
Let’s face it, for most students, finances are stretched. Textbooks, the weekly food shop, your student digs, and all those nights out add up. If you’re thinking of adding a car payment to the mix, you’ll need to have a good grasp of your budget. Before applying for finance, look at your savings as well as any money you have coming in from any part-time jobs to help you work out how much you can afford to spend on your car loan. And don’t forget the other costs that come along with car ownership; road tax, insurance, fuel, service, MOT, and parking fees.
Keep your options open
When you’re trying to decide which student car loan would be best for you, it could be a good idea to keep your options open. That applies to finance and the car you choose. As a student looking for a car loan with no credit history, you might find that a guarantor loan is an option. Guarantor loans can be popular with students as they allow you to find someone (usually a close friend or family member) who agrees to act as a guarantor and cover your loan repayments if you can’t.
No matter the type of car finance that you take out, you should also keep an open mind when it comes to choosing a car. Think about your budget and look for a car that suits your circumstances. That could mean buying a smaller car than you originally intended because it’s ideal for commuting around your university town; a fuel-efficient hybrid to keep your costs down on those long road-trips back home; or a quality used car that’ll help your student budget go further.
Consider a part-time job
As a student, your studies always need to come first. Yes, student life is also about what happens outside of the library but, ultimately, you’re there to get the best degree you can. But if you’re looking for a car loan as a student, having a part-time job could help – especially as you can’t use your student loan to cover your car payments. If you’re able to find a steady role that offers the same number of hours every month then you’ll have a good idea of how much cash you can afford to spend on your student car finance deal.