What age can you get car finance?

At what age can young drivers get car finance?

Passing your driving test is an exciting milestone. There's so much to look forward to now that you can legally get behind the wheel. But have you considered how you'll pay for your first car? Finance may seem like the next step, but for young drivers there are age restrictions.

Knowing when you can access car finance can help you make important decisions and get on the road sooner. In this guide, we'll look at when you can access car finance and give you insights into how it works.

At what age can I buy a car?

If you hold a full driving licence, you can legally own and register a car in your name at 17 in the UK. You don't need to be 18 to buy a car outright using your own money. Many young drivers do this with help from savings, parents, or part-time jobs.

Is there an age limit for car finance?

You must be at least 18 years old to enter into a finance agreement. This age limit is in place because car finance is a legally binding credit agreement, and UK law doesn't allow anyone under 18 to sign a credit contract.

The age restriction exists because:

• It protects you: if you've just passed your test at 17, being unable to access car finance helps protect you from early financial problems. 
• It protects the lender: finance companies need to assess your ability to repay the loan. Younger drivers seeking car finance are considered a higher risk because they usually have no credit history, lower income and limited job stability. 

Is it ever possible for a 17-year-old to finance a car?

There are no circumstances where it's possible to get car finance if you're under 18. The legal driving age in the UK might be 17, but even if you have a job and a regular income, you won't be able to access finance until you're 18.

Are there alternatives to car finance for drivers aged under 17?

If you're 17 and eager to own your car, there are a couple of alternatives. One option is to buy a cheaper used car outright using your savings.

Alternatively, while parents can't finance a car for a 17-year-old, as the primary driver needs to be the registered owner of the vehicle, your parent or guardian could take out finance in their name - however, not all finance companies will accommodate this. This option comes with serious responsibilities and legal considerations, as your parents are taking on another loan so that you can drive. The agreement stays in your parent's name. They are the owner of the car and legally responsible for every payment. 

If you do go down this route and your parent or guardian agrees, they can allow you to drive the car once the finance agreement is finalised. You'll need to make sure you're properly insured to drive the car, though. 

Can young drivers under 21 get car finance?

If you're aged 18 to 21, you're eligible to apply for car finance, but it may be difficult to be accepted. This is because your age means you're more likely to have a lack of credit history, which is one indicator of the type of borrower you are to lenders. You're also more likely to have lower earnings. Both are important factors that can work against you. Lenders may view you as a higher risk, so if you are accepted, you could face higher interest rates.

You may also need a joint applicant, who is usually a parent or someone you live with - both the applicants' current circumstances and income are taken into consideration which can give the lender more confidence and increase your approval chances.

How can I improve my chances of being approved for car finance?

It's common for people aged under 21 who've passed their driving test to have no or little credit history. There are ways to build up your credit score, which is the numerical representation of how well you manage credit. This number is usually three digits and calculated by three main credit reference agencies: Experian, Equifax, and TransUnion. Some of the steps to take to build your score include: 

• Register to vote ✅
• Open and manage a bank account responsibly 💰
• Use a mobile phone contract or small credit card to build your credit history (but always pay on time) 💳

Even with a short credit history, showing evidence of stable income and reliable money management can put you on track for securing car finance.

Should I finance my first car?

You don't have to take out finance for your first car. This decision will depend on your circumstances.

If you can afford to buy a reliable used car outright, without draining your savings, that's often the safer and cheaper option. You won't pay interest, and you’ll have full ownership from day one.

However, if you want a newer or more reliable car and don't have the cash to buy it upfront, finance might make sense. Especially if you drive long distances or need a vehicle for work. Before you apply, ask yourself: 

• Can I afford the monthly repayments without struggling? 🤔
• Do I have a stable income to keep up with the agreement for the next few years? 📆
• Will I be using the car enough to justify the cost? 🚗

Avoid taking on finance for something that stretches your budget or means you can't afford other costs such as insurance, fuel, and car maintenance. 

What is the maximum age limit for car finance?

Most lenders don't set a specific maximum age limit for car finance in the UK, but they will consider your age as part of the application process. Instead of rejecting older applicants outright, many providers look at income, credit score, and financial stability. If you're retired but have a regular pension income and a clean credit history, your age alone shouldn't stop you from being approved.

Some lenders may limit the length of the contract based on how old you'll be when the agreement ends, but this varies. Also, older drivers should think carefully before entering a long-term car finance deal. Make sure it fits your lifestyle and consider whether you'll want or need the car for the full term.

Can I get car finance as a young driver?

Car finance can be a great tool to get on the road, but it only becomes available from age 18 in the UK. First Response Finance offer car finance for 18-year-olds. We look at each application in turn and will consider your circumstances.

If you're accepted, you could get a Hire Purchase loan from us of £2,000 to £15,000. You can use our simple calculator tool to get an idea of how much your agreement might cost. It's free, takes just a few moments, and has no impact on your credit score.

If you want to take your application further, you can get a quote. We just need a few basic details to get started.

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