By: Sam Bisby
If you’re unemployed and looking to buy a new car on finance, just finding a company who’ll process your application can be an uphill struggle which makes gaining approval seem almost impossible. It’s entirely understandable that finance companies will consider you a higher risk if you’re out of work but it doesn’t mean you’ll be ruled out altogether.
It’s estimated as many as 2.5 million people are out of work in the UK. The latest figures from the Office for National Statistics paint a grim picture of the UK job market. The reality is many of these people are unable to find work at a location that’s easily accessible via public transport which could prevent them from being able to attend interviews and ultimately secure a job that meets their skill set and salary expectations.
If you’re unemployed and hold a full driving license but don’t have a car there may be a solution in the form of unemployed car finance, the fact that you don’t currently hold a job shouldn’t be a game stopper. There’s a common assumption that car finance is only available to those in full-time employment with a good credit history, this couldn’t be further from reality.
2012 saw American car dealerships report an 18% surge in sub prime car loans and the trend looks set to continue in the UK with reports already suggesting the UK’s sub prime sector is experiencing considerable growth. As more companies target the sector it creates a more competitive market place which ultimately leads to better deals for consumers along with less stringent approval criteria.
In order to gain approval for unemployed car finance you’ll need to have some form of provable income. If you’re unemployed this could come in the form of Job Seekers allowance. If your period of unemployment lasts for over 6 weeks you’ll most likely be eligible to apply for the Government’s job seekers allowance which, if your claim is approved and provided you stick to your job seekers agreement, will give you a guaranteed weekly income until you find employment. As part of your job seekers agreement you’ll be expected to commute up to 90 miles for work so access to a car becomes even more important.
With this in mind and as long as you can prove that you have the disposable income needed to repay your car finance, chances are you’ll qualify for sub prime car finance.
You should bare in mind that most lenders will still only lend you money if you have a guarantor who’s in full-time employment. Your guarantor could be a friend or family member who’s prepared to vouch for you and who will, if you default on payments be liable for any outstanding balance.
Before applying for unemployed car finance you’d be wise to register yourself on the electoral role as this will bolster your chances of approval. You should also avoid making multiple applications with different company’s within a short period of time as multiple refusals can negatively impact your credit rating. It’s also worth baring in mind that your previous financial history will be taken in to account during the decision making process. You can check your electoral status and view your credit profile for free on creditexpert.com.
It’s inevitable that when you opt for this type of car finance interest rates will differ from those that you’d be offered if you we’re in full-time employment. However, the opportunity to purchase a new car in order to help you find and secure a job that you’re happy with can in the long run prove to be invaluable.
You should now be armed with all the know how you need to boost your job search by getting a new set of wheels on finance. If you’re interested in taking advantage of unemployed car finance, Stoneacre.co.uk are able to carry out an initial eligibility check without the need to carry out a credit search which means there’s no risk of unnecessarily damaging your credit rating with refusals.
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