At CarFinance 247, we appreciate that it can sometimes be difficult for people to access car finance for many reasons – which is why we enable our customers to apply for guarantor car finance.
As well as sorting the car finance, we can help you to find the perfect car too. We work with reputable dealers up and down the country.
So, what are you waiting for? Start our simple application process today.
Many young drivers and people applying for car finance for the very first time might have this question on their mind.
You may have seen guarantor loans advertised for other financial products - and the principle is no different for car finance.
A guarantor car loan is just one of many ways people with a less than perfect, or non-existent credit background can finance a vehicle of their choice.
But what is guarantor car finance? And how does it work?
This is a car loan where a third party (friend or family member) agrees to guarantee the repayment of the finance in the case of you failing to meet the payments.
The initial loan is paid to the guarantor and they release it to you. You, the borrower, are responsible for making the loan repayments direct to the lender.
It’s important to be aware that as you’ll be taking out a guarantor loan, the person that’s acting as your guarantor will be responsible for making the payments if you can’t.
A guarantor loan works in the same way as most other forms of finance, but in this case there is a third party involved who takes on the final responsibility for your loan. Essentially, they are guaranteeing it will be repaid.
A guarantor loan is similar to a personal loan in that you can do as you wish with the funds you receive.
The main difference with a guarantor loan is that there is not just a two-way relationship between you and your lender, there is a third party involved; the guarantor.
Basically, the guarantor agrees to repay the finance to the lender in the event that you default on the loan (i.e. miss repayments).
Guarantor car finance can be suitable for people who have a less than perfect credit history and/or have difficulty in getting approved for finance.
If you keep up with the repayments, it can help to rebuild your credit score too.
It can sometimes be difficult for young drivers to put up the cash to finance a new car, but it can also sometimes be difficult for them to get accepted for finance.
That’s because many young drivers won’t have built up their credit score yet - which is perfectly understandable in the circumstances.
However, lenders don’t take just your credit score into account when assessing your eligibility. They will look into a variety of factors, including who you choose as your guarantor. Guarantor car finance might be an option available for you as a young driver.
A guarantor could be a family member, or even a close friend - however your husband or wife cannot legally act as a guarantor for car finance.
Your guarantor must also be aged over 21.
Yes - lenders will run a full check on the guarantor’s credit report to assess a number of different things. This is because they are responsible for payments if the main applicant can’t pay.
It might be a good idea for the guarantor, or even the borrower themselves to access their credit report through a credit reference agency to ensure all the information on there is up to date before making an application for guarantor car finance.
No - the guarantor needs to have a good credit score, with a strong track history of meeting various payments.
Again, the reason for this is that the lender needs assurances that the guarantor is reliable. If they’re liable for picking up payments when the borrower can’t, it’s important to the lender that they can count on this person to fulfil this responsibility.
Therefore, while the main applicant can apply with a less than perfect credit score - the guarantor themselves cannot.
In most cases, yes, the guarantor needs to be a homeowner. However, in certain circumstances we can consider tenants who have been at same address for many years and who have an excellent credit history.
No, but obviously that isn’t an excuse to not make your repayments on time. They will be liable for your debt.
If you and the guarantor both fail to pay the loan, both of you could get issued with CCJs (County Court Judgements).
This will affect both your abilities to obtain credit in the future - so it’s important to remain on top of payments.
Applying with us only takes a couple of minutes and won't affect your credit score
* The UK's number one online car finance broker by unique users to the website. Based on Hitwise data – 1,746,657 to CarFinance 247 vs. 666,020 for nearest competitor. January to December 2019.
96% of our customers recommend us: † Based on feedback left on independent review site Reviewcentre. May 2019.
CarFinance 247 is a trading name of CarFinance 247 Limited, a credit broker and insurance intermediary, and 247 Money Group Limited (247 Money), a lender. Both companies are part of the 247 group of companies.
CarFinance 247 is authorised and regulated by the Financial Conduct Authority under reference number: 653019. Registered office: Universal Square, Devonshire Street North, Manchester, M12 6JH. Registered in England. Company registration no. 06035525. Data Protection Registration Number Z1897658.
247 Money is authorised and regulated by the Financial Conduct Authority. Registered office: Universal Square, Devonshire Street North, Manchester, M12 6JH. Registered in England. Company registration no. 10989530. Data Protection Registration Number ZA456831.
All finance is subject to status and income. Written quotations on request. CarFinance 247 can introduce you to a limited number of finance providers, including 247Money, based upon your credit rating and will receive commission for such introductions.
† We do not charge a fee for arranging the finance, however some of our lenders may charge a fee. Your account manager can provide more information on this