Yes, you could get car finance on benefits. At Car Finance 247, we believe that being on benefits shouldn’t prevent you from finding and financing a car. We know how vital it is to have access to your own transport, whether it’s for running errands or travelling to and from work.
That’s why we work with a panel of trusted lenders who may consider car finance for people on benefits. Whether you’re temporarily unemployed, managing a disability, or taking on caregiving responsibilities, we’ll do our best to help you get behind the wheel.
We could accept the following benefits as sources of income when you apply for car finance:
Universal Credit
Housing benefits
Disability Living Allowance (DLA)
Personal Independent Payment (PIP)
Carers allowance
Ready to find out more? Get a quote today or give us a call.
How does car finance for people on benefits work?
Car finance on benefits generally works the same as any other car finance. The process is simple:
Apply online – You complete our online form with your personal details, address history and income.
Soft credit search – No impact on your credit score. We use a soft search to give you a quote. If you proceed, a hard search will be conducted which may impact your credit score.
Choose a car – Your details are shared with lenders who assess affordability, and if you’re approved in principle, you’ll be given a budget to choose a car.
Final approval – Once you’ve picked a vehicle, a hard credit check is completed and you sign the agreement if approved. You may be required to provide additional benefits documentation.
Collect your car – The lender pays the dealer directly, and you can pick up your car! From there, you’ll make fixed monthly repayments to the lender over your agreed term.
When assessing your application, lenders will check your financial situation to see if you can afford the repayments. They look at many things like your credit history, your outgoings and your income.
Benefits may still be accepted as a source of income, as lenders look at how regular and stable your income is, not just where it comes from.
With Universal Credit, payments can change month to month depending on monthly income. This means lenders may also look closely at your recent payment history to fully assess whether you can afford repayments each month.
As part of the application process, you’ll usually need to provide some documents to support your application. This may include:
● Proof of identity
● Recent bank statements
● Benefits award letters or Universal Credit statements
Some lenders may also ask you to complete an open banking check.
Being on benefits does not automatically mean you’ll be declined for car finance. Every lender has their own criteria. At Car Finance 247, we work with a panel of trusted lenders. Some of them consider applications from people in a range of financial circumstances, including if you're on benefits or have bad credit. Credit is subject to status and eligibility.
I’m on benefits and have bad credit. Can you help?
Yes, we could! We know that having a bad credit score can make finding finance more challenging, but we’re here to help. Your current financial circumstances or past credit issues shouldn't have to affect your ability to secure finance now.
We work with a panel of lenders who offer bad credit car finance even if you’re on benefits, meaning we can help people in a variety of situations. So, even if your credit history isn’t perfect, we’ll aim to find a deal that suits you. Credit is subject to status.
Can I get car finance on Universal Credit?
Yes, you could. If you’re receiving Universal Credit, you might think that securing car finance is out of reach, but that’s not always the case. We work with lenders who consider a variety of income sources, including Universal Credit, when assessing applications.
Whether you’re using it to supplement your income during tough times or it's your main source of money, we'll help you navigate car finance on Universal Credit.
Can Universal Credit give you a car?
Universal credit itself doesn’t provide a car. But, UC claimants may be able to apply for a Budgeting Advance from the Department of Work and Pensions (DWP). A Budgeting Advance is a type of loan designed to help with essential one-off costs. A car may qualify for this if it’s needed for work purposes.
You might be able to get a Budgeting Advance loan if you’ve had certain benefits for six months. These may include:
● Income Support
● Income-based Jobseeker’s Allowance
● Income-related Employment and Support Allowance
● Pension Credit
A Budgeting Advance is separate from car finance and is part of a government support scheme, not something we offer here at Car Finance 247. If a Budgeting Advance isn’t suitable for your situation, car finance may be another option worth exploring with lenders like ours who may accept applicants on Universal Credit.
Does car finance affect Universal Credit?
Taking out car finance does not directly affect your Universal Credit entitlement. This is because car finance is a liability, not an asset.
But, if car finance repayments reduce disposable income, this could affect affordability assessments for UC or other means-tested benefits in some circumstances.
That’s why it’s really important to check with the DWP or a benefits advisor if you’re unsure how car finance will affect your specific circumstances.
How to get car finance if you are receiving Universal Credit?
Prove affordability: Lenders will want to see that you can comfortably manage your monthly repayments. This could include showing a stable income stream from Universal Credit and any extra earnings.
Explore your options: We’ll search our trusted panel of lenders to try and find car finance deals for people on Universal Credit, even if you have bad credit. Credit is subject to status.
Do you offer car finance for unemployed people?
We understand that being unemployed can make it harder to secure car finance. But being out of work shouldn’t stop you from getting a vehicle, especially when you may need it for a day to day life.
We work with lenders who can offer car finance for unemployed people, provided you can show you can keep up with repayments. A good credit score could improve your chances of approval, as it may show lenders you're less of a risk to lend to.
Your dedicated account manager will guide you through the process, talk to lenders, and help with paperwork to make securing finance as straightforward as possible.
Car finance on disability benefits
If you live with a disability or care for a disabled person, having access to a vehicle can be essential. That's why we work with lenders who can help people claiming Universal Credit, DLA, carers allowance, or PIP find car finance.
Can I get car finance on disability benefits?
Yes, you could. We have lenders who can finance cars for those receiving disability benefits, including DLA and PIP. They will check your overall financial situation, factoring in these benefits and any extra income, to determine if you can afford the repayments.
Our lenders will check your overall financial situation to see if we can find a car finance deal that suits your circumstances.
If you’re ready to explore your options, our team is here to help you through the process and find a deal that works for you.
Can PIP help with car finance?
Yes, if you’re receiving Personal Independence Payment (PIP), you may be eligible for car finance.
When applying for car finance, lenders may consider your benefits as part of your overall income. This helps them get a clear picture of your ability to meet monthly repayments. If you have a limited or poor credit history, we may be able to help – we have lenders who specialise in helping people in similar situations. Credit subject to status.
If you receive the enhanced rate mobility component of PIP, you may also qualify for the Motability Scheme. The Motability Scheme is a UK programme. It lets eligible disabled people use their mobility allowance to lease a new car, a Wheelchair Accessible Vehicle (WAV), a scooter, or a powered wheelchair.
Motability is separate from traditional car finance and may be worth considering as an alternative option if you’re eligible.
What can help my application for car finance on benefits?
Securing car finance while on benefits is possible, but taking a few proactive steps may improve your chances of approval.
Here’s what could help:
Provide proof of income: Make sure to have documents to verify your benefits or other income. This includes award letters for Universal Credit, PIP, or Disability Living Allowance. Providing this information may help to support your application.
Check your credit report: Reviewing your credit report before applying can help you identify and address any inaccuracies or areas of concern. While bad credit doesn’t necessarily prevent you from getting finance, a stronger credit score can improve your options. Credit is subject to status.
Consider a guarantor: If you’re struggling to meet the lender's requirements, using a guarantor could increase your chances of approval. A guarantor with a strong credit history acts as a backup, providing lenders with added confidence.
Opt for a realistic loan amount: Applying for a smaller loan or a more affordable car could make lenders more willing to approve your application, as the repayments may be easier to manage.
A variety of options: We have a wide panel of lenders who could help find a great deal tailored to you.
Provide a deposit: If possible, offering a deposit can reduce the loan amount and show lenders you’re committed. A deposit can also make your application more attractive by lowering their perceived risk. Not an option? Don’t worry, we offer no deposit car finance options too.
Taking these steps can help show your ability to manage a car finance agreement and increase the likelihood of finding a deal that fits your needs.
Why choose us for car finance on benefits?
A helping hand: At Car Finance 247, we’re dedicated to helping people improve their everyday lives. Whether you’re searching for bad credit car finance on benefits or simply need guidance through the process, we could help!
Dedicated account manager: If approved, our expert team will assign you a dedicated account manager to support you every step of the way, ensuring a smooth and stress-free experience.
Finding you the best deal: Whether you need a reliable car for the school run, a practical vehicle for errands, or something more suited to your needs, we’ll search our panel of lenders to try and find the best deal – even if you have a history of bad credit. Credit is subject to status.