Can students get cars on finance?

Can students get cars on finance? 

In a word, yes! It's possible to get a car on finance as a student. But there are a few important things to consider, which we'll cover in this guide. 

We know that for many students, having a car is a game-changer. Whether it's commuting to campus, getting to a part-time job or simply having a bit of freedom and flexibility, a set of wheels can make a big difference during your uni years. But buying a car outright? That's not something most students can afford. 

So, can you get a car on finance as a student? You can, but you need to arm yourself with all the right information first. Here, we'll break down how car finance works, what challenges you might face and how to give yourself the best shot at approval. Plus, we'll look at some helpful alternatives if you're not quite ready yet. But first, let's start with the basics.

What is car finance and how does it work?

Car finance is a way to spread the cost of buying a vehicle over a series of monthly payments, rather than paying the full amount upfront. There are a few different types of car finance, but the most common options include:

Hire Purchase (HP): you pay a deposit (sometimes optional), then fixed monthly payments. You own the car outright once all payments are made. 

Personal Contract Purchase (PCP): typically lower monthly payments than HP, with the option to buy the car at the end or hand it back. 

Personal loans: borrow the money from a lender such as a bank, then use it to buy the car yourself.

It's important to note that you will likely be charged interest no matter which option you choose. This means that you'll pay back more than you borrow by the end of the agreement.

All of our loans are on a Hire Purchase basis. Craig, Head of Underwriting at First Response Finance, offers his insight as to the benefits of HP: 

"Hire Purchase agreements can be a smart option for students or first-time buyers who want predictable payments and long-term ownership. Unlike leasing, you're working towards owning the car outright, which means no balloon payments or mileage restrictions. Plus, with fixed interest rates and structured terms, it's easier to budget each month without any surprises."

Can I get car finance as a student?

Yes, students can get car finance - but it's not guaranteed. Getting approved often depends on a few key factors, and being a student can influence them. 

What are the common obstacles for students looking to get car finance?

• Limited or no credit history: most students haven't had much time to build a credit score, which makes it harder for lenders to assess risk.
• Low or irregular income: part-time jobs, freelance work, or relying on student loans can make it tricky to prove financial stability. 
• Short-term addresses: students often move frequently, which can make you look less stable on paper.
  

What will lenders look for when I apply for finance? 

Every lender has different criteria, but most will want to see:

• Proof of income: even part-time earnings or benefits can help. 
• Stable address history: the longer you've lived at one place, the better. 
• Affordability: can you realistically manage the monthly payments? 
• Credit behaviour: even with a thin file, lenders may look at how you handle a bank account, mobile contracts, or small credit cards.

How can I improve my chances of getting car finance as a student?

There are a few steps you can take to strengthen your chances:

Start building your credit history 💳

• Register on the electoral roll (it's free and boosts your score)
• Use a student credit card responsibly - keep the balance low and pay it off in full each month 
• Set up direct debits to pay bills on time 

Be realistic about what you can afford 💰

A fancy car might be tempting but focus on something affordable to run and insure. Use online car finance calculators to estimate what you can borrow comfortably. Don't forget to budget for: 

• Insurance 
• Road tax 
• Fuel 
• Maintenance and repairs 

Choose the right car 🚗

Opt for something reliable, fuel-efficient and in a lower insurance group. A small hatchback or used car is often a great choice for students.

Have your documents ready 📄

To speed up the process, gather everything you'll need: 

• Proof of ID (passport or driving licence)
• Proof of income (payslips or bank statements) 
• Proof of address (utility bill or letter from the bank)
  

What can I do if finance isn't an option right now?

If you're not yet in a position to get car finance as a student, don't worry. There are still plenty of ways to get around and work towards your goal.

Save up for a budget-friendly car 💰

Look for low-cost used cars that you can buy outright. It might not be your dream drive, but it'll get you from A to B.

Share or borrow a family car 

If possible, use a parent's or sibling's car while you save or build your credit. Some insurance policies allow named drivers with a separate no-claims record. 

Use public transport or car-sharing services 🚏

Depending on your area, buses, trains, or services like Zipcar can be a good short-term solution. 

Keep building your financial profile 

Even if you can't get finance now, work on building your credit and savings. You might be ready in six months to a year.

FAQs about car finance for students 

Can I get car finance with no job?

As long as you have some type of income, such as benefits, it may still be possible to get car finance as a student.

Do student loans count as income? 

Typically, no but bursaries are usually considered. Part-time or freelance work can also help strengthen your case. 

Will applying for car finance affect my credit score? 

A full application usually involves a hard credit check, which may impact your score. But checking your eligibility with tools like a soft search won't leave a mark on your file. 

Can international students apply for car finance? 

Possibly, but it's usually harder without a UK credit history or long-term visa. You'll need to speak to the lender directly and may need a guarantor. 

Can you help me get a car on finance as a student? 

Yes! We have more than 20 years' experience in providing vehicle finance to students, those who have poor credit, and those who might have been declined elsewhere. We don't believe such factors should automatically rule out your chances of being approved. So, if you're a student seeking a car on finance, we might be able to help you. 

We offer Hire Purchase loans of £2,000 to £15,000 which can be repaid over 18 - 61 months. Use our car finance calculator tool to get an idea of how much your agreement might cost. It's quick, free, and simple - and has no impact on your credit score. 

And the same goes for getting a quote. It takes just a few moments and all we'll need is a few basic details. 

Want to know more about the world of car finance before you apply? Our 'Insights and tips' section is full of useful information, and you can read our reviews to see why we've been named the UK's No.1 motor finance lender on Review Centre.