Whether you’re fresh from sixth form or a mature student looking to retrain, university can bring with it a lot of upheaval and different priorities so getting a car on finance might be pretty low down on that list.
But for those who are living off campus and commuting into university, or who may need to travel to and from a part time job or work placement, it’s something they may need to give consideration to.
Can you get car finance if you’re a student?
With ages and backgrounds of students varying across campuses in the UK, this is a tricky one to answer. Assuming that you fall into the younger age bracket of 18-21, you’re unlikely to have the level of credit history which is required for car finance.
Traditionally, the best way for young people to build a credit profile has been to take out a mobile phone contract or credit card and not miss any payments. This demonstrates responsibility and trust.
However, as reported by This Is Money, Experian recently announced that it would start factoring in subscriptions to Amazon Prime, Netflix and Spotify to enhance credit scores and improve the chances of being accepted for credit.
On top of these traditional avenues, being entered onto the electoral register is a non-monetary way to improve your credit profile as it confirms the address used on finance applications.
If you do any/all of these things then chances are you may be accepted for car finance as a student. One way to find out is to use our eligibility checker: this is the fastest way to check whether you’ll be pre-approved for car finance and won’t impact your credit score.
Can you use your student loan to get car finance?
Your student loan only goes so far – after all it’s usually means-tested to cover the costs of accommodation, basic living, and course materials – meaning you’re unlikely to have enough left to also cover the deposit and monthly payments on a car.
The best way to check your affordability is to assess your student loan, along with any other incomings and outgoings, to find out how much you can stretch a monthly payment to. Please bear in mind that you will also have to factor in other outgoings on top of car finance such as road tax, fuel, and insurance so even then it might not be enough.
Do you need a job to get car finance?
In light of the above, having a part time job and some form of disposable income is only going to work in your favour when it comes to being a student getting car finance.
When applying for finance, most lenders will ask for the past three months payslips to prove you have a steady income stream. Then they will take into account your net income rather than gross.
As long as you receive a steady income, most lenders will consider your application for car finance.
Do you need a deposit?
With little in the way of savings or disposable income, accruing enough for an initial payment is often a major block in the way of students getting a car on finance.
Hippo Leasing understand how prohibitive this can be which is why we offer a large variety of car lease deals requiring no deposit. Our account managers work with a range of manufacturers to find you the right vehicle suitable to your payment terms, and the benefits of no deposit car leasing include:
- No upfront payment
- Pay absolutely nothing for 30 days
- Includes same great service – including a flat-fee for delivery
- No deposit option available on all our deals
Are there options for students with bad credit?
At Hippo Leasing, we know the stress that a low credit score can cause and don’t want that to impact your livelihood and prevent you from doing the things you love.
If you have bad credit, our specialist account managers will work hard to find you a vehicle and finance plan to suit your circumstances.
We operate with a wide panel of lenders, meaning we can offer you the very best chance of approval even if you have a bad credit score. You’ll even be considered for approval if you have missed payments, CCJs or defaults.
Can I use a guarantor?
With all of the above points in mind, you’d be forgiven for thinking the odds of being a student who can get a car on finance are slim and none.
Perhaps the safety and most sensible option then would be to use a guarantor to get accepted for car finance.
A guarantor, usually a parent, is nominated to cover the loan and continue payments if you are personally unable to make them. Their presence will give the lender confidence that payments will be made and reduce the risk of defaulting.