Owning your first car is a major milestone, but for many young drivers, getting car finance can feel a bit daunting. Lenders usually check credit history, income, and affordability when assessing applications. This can be tough for young people who haven’t built a good credit score yet.
But at Car Finance 247, we understand that everyone has to start somewhere, and we’re here to help! We work with a panel of lenders who take all circumstances into account, so you could be approved even with a less than perfect credit score. Credit is subject to status.
In this guide, we’ll explain everything you need to know about young driver car finance and tips for improving your chances of approval.
Why young drivers might struggle to get car finance
Though a young driver could get car finance, some lenders may see them as more of a risk to lend to. Young drivers often face challenges because:
They’re not yet over eighteen. Although you can pass your test and start driving at seventeen, you can’t yet sign a credit agreement.
They may have little to no credit history, making it difficult for lenders to assess their ability to repay a loan.
Their income might be lower or inconsistent, especially for students or those in part-time work.
They might not have a stable address history, which some lenders use to verify financial reliability.
While these factors can make getting car finance harder, as long as you are at least eighteen, it doesn’t mean it’s impossible. At Car Finance 247, we work with lenders who understand that everyone starts somewhere and are willing to consider applications from young drivers.
Can young drivers get car finance?
Yes, young drivers – provided they are over eighteen – may be able to get car finance, but they might need to take additional steps to boost their chances. Here are some options that could help:
Guarantor loans – If you’re struggling to get approved, you might be able to apply for a guarantor car loan. This means asking a trusted friend or family member with a good credit history to co-sign your agreement, reducing the risk for lenders.
Providing proof of income – Lenders need to see that you can afford the repayments. If you have a steady job, providing payslips or bank statements can help strengthen your application.
Improving your credit score – If you don’t have an extensive credit history, consider building your score by registering on the electoral roll, keeping up with regular payments on any existing credit, and avoiding multiple finance applications at once where hard searches are conducted.
Read our guide on improving your credit score for more detailed tips.
Joint applications
If you're eighteen or over and have a limited credit history, applying for car finance alongside a parent or guardian could be an option.
With a joint application, you and the parent or guardian are named on the finance agreement and are equally responsible for making the monthly repayments. This could help boost your likelihood for approval, as lenders look at your combined income and credit score, and it also helps give them extra assurance that the loan will be repaid.
A joint applicant is different from a guarantor, who only agrees to step in if you can't keep up with the repayments.
Do you need a high credit score to get car finance as a young driver?
Not necessarily! At Car Finance 247, we don’t expect young drivers to have an amazing credit score. While a higher score can make approval easier, we work with lenders who consider all circumstances, and could offer bad credit car finance deals. Even if you have a low or limited credit score, you might still be able to secure car finance.
Just bear in mind that if your score is very low, you might be offered higher interest rates.
You can get a good idea of the deal you’re eligible for by using our quick car finance calculator. Credit is subject to status.
Interest and APR for young drivers
If you're a young driver with a limited credit history, you may be offered a higher APR than someone with a longer borrowing history who has had the chance to build up good credit. This could be because lenders have less proof that you’ve managed credit well in the past, and you may therefore seem riskier to lend to.
However, credit score is just one factor. Lenders also consider factors such as your income, employment status and overall affordability when deciding if you’re eligible.
Can students get car finance?
Yes, students could get car finance, but approval depends on factors like income and credit history.
While some students may earn money through part-time work, it does not always mean they’ll meet lender income criteria. Most lenders require a regular, provable income - funds such as student loans may not be accepted as a primary source of income when applying for finance.
Read our guide on car finance for students to find out more!
What are the best car finance options for young drivers?
There are several types of car finance available, and the best option depends on your circumstances and preferences. Here’s a breakdown of the most popular choices:
You pay a deposit (if required) and then make fixed monthly payments.
You own the car once the final payment is made.
There are no mileage restrictions.
Monthly payments may be higher compared to other finance options.
Ideal for young drivers who want to own their car outright at the end of the agreement.
Personal Contract Purchase (PCP)
Lower monthly payments compared to HP.
You don’t own the car unless you make a final ‘balloon payment’ at the end of the agreement.
Mileage limits apply, and exceeding them may result in additional fees.
Gives flexibility—return the car, trade it in, or buy it at the end of the contract.
Suitable for young drivers who want lower monthly payments and flexibility at the end of the term.
Personal Contract Hire (PCH)
Essentially a long-term lease—you never own the car.
Fixed monthly payments with mileage restrictions.
Maintenance packages may be available to cover servicing costs.
Best for young drivers who want a brand-new car with lower maintenance worries but don’t mind not owning it.
Each option has its pros and cons. Whilst Car Finance 247 don’t currently offer PCH options, we may be able to help with alternatives. So, it’s important to think about factors like cost, flexibility, and ownership before picking a finance deal.
How Car Finance 247 can help young drivers
At Car Finance 247, we believe everyone deserves a feel-good car buying journey. Once approved in principle, you’ll get:
A dedicated account manager who will help you through the process and try to find the best finance options for your circumstances.
Access to a panel of lenders who may consider young drivers, even if they have little or no credit history.
Flexible finance options, including no-deposit car finance.
We’ll do our best to help you find a finance deal that works for you so you can get on the road with confidence.
Start your journey today by getting a free, no-obligation quote!
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Can a 17-year-old get car finance?
You need to be eighteen to get a car loan. Though you can drive a car at seventeen, lenders won’t consider you for car finance. It is also important to be aware that an application for finance may also involve additional checks, such as identity verification, credit referencing and affordability assessments, which may vary depending on the lender.
A guarantor could be a good idea too, to give the lender extra security that you can repay your loan.
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What is the 50% rule for car finance affordability?
The 50% rule is a general rule of thumb that your monthly car finance repayments shouldn't exceed half of your disposable income. For example, if you’re wondering if £200 a month is too much for a car, using this rule of thumb, you’d need to have £400 disposable income each month. However, this isn’t a strict lender rule, it’s just something you may want to be mindful of when you’re budgeting before you commit to a loan.
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Is car finance for first-time drivers the same as young driver finance?
No, not always. A first-time driver is someone who has recently passed their test and is new to driving, but they aren’t necessarily young. You can pass your test at any age. Young driver finance is there to help young people who may not have built up a good credit history yet, and have other struggles getting car finance. At Car Finance 247, we work with lenders who could help both first-time drivers and young drivers. Credit is subject to status and eligibility.
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How much deposit do I need for young driver car finance?
This varies. Some lenders require a deposit, but there may also be no-deposit finance options available. If you have savings, a deposit could reduce your monthly payments and potentially lower the interest rate. A larger deposit could also make it easier to get approved, as it reduces the amount you need to borrow and might show financial responsibility to lenders.
If you don’t have a deposit, we do work with lenders who could offer no deposit finance deals, although these might come with higher monthly repayments.