How to apply for car finance
Applying for car finance involves providing information about your identity, address, income and financial circumstances so the lender can assess your eligibility and affordability. Depending on the lender, you may be able to complete an initial eligibility check using a soft credit search before submitting a full application.
With AutoMoney Trust, you can apply for car finance online and you do not need to have chosen a specific vehicle before you start. This guide covers the full process from start to finish: what information you need to have ready, who can apply, how the credit check works, and what happens once you are approved.
To apply for car finance, you will usually need to provide personal, address, income, employment and banking information so the lender can assess your application.
Before you start an application, it helps to have the following to hand:
You do not need to have a specific car in mind to start an application with AutoMoney Trust. You can check your eligibility and get an approval in principle first, then find the car. Alternatively, if you already have a vehicle identified, you can include those details in your application.
To apply for car finance with AutoMoney Trust you need to be:
Beyond those basics, we consider a wide range of applicants including:
If you have been turned down by other lenders, that does not automatically mean you will be declined here. For more on how we assess poor credit applications, see our guide on car finance with a CCJ.
Use our car finance calculator to see what monthly payments look like at different loan amounts and terms before you start your application.
At AutoMoney trust, a car finance application can involve both soft and hard credit searches, depending on the lender and the stage of the application.
The initial eligibility check is a soft search, which does not appear on your credit file as an inquiry visible to other lenders and has no effect on your credit score. This lets you find out whether you are likely to be approved without any risk to your file.
If you proceed to a full application, a hard search is run at that point. This is visible to other lenders for 12 months. A single hard search has a small and temporary effect on your score. The concern is running multiple hard searches across different lenders in quick succession, which is why using soft search tools first makes sense.
For a full explanation of how soft and hard searches work and what lenders look at, see our guide on credit checks for car finance.
First-time applicants face a common challenge: lenders want to see a track record of managing credit, but you have not had the chance to build one yet. A thin or empty credit file does not mean an automatic decline with every lender, but it does narrow your options.
Specialist lenders who offer hire purchase to applicants with no credit history are your best route. Because the loan is secured against the vehicle, they can take on more risk than an unsecured lender. The interest rate offered will reflect the limited credit history, but a well-managed HP agreement is itself one of the most effective ways to start building a credit profile.
A few things that can help a first-time application:
With AutoMoney Trust, decisions are given in minutes. The initial soft search and eligibility assessment is automated, so you do not wait days to find out whether you are likely to be approved. Once you proceed to a full application with a specific vehicle, the formal decision follows quickly.
The time between application and driving away depends largely on how quickly the supporting steps are completed: finding the vehicle, signing the agreement, and the dealer completing their side of the process. In straightforward cases this can all happen within a few days.
Yes, the entire AutoMoney Trust application process takes place online. There are no branch visits and no need to apply in person. You can start, complete, and sign your agreement from wherever you are.
The online process is the same regardless of your credit history; poor credit applicants, first-time applicants all apply through the same straightforward online form.
Start your application on our apply for car finance page. The initial check will not affect your credit score.
Once your application is approved and you have signed the finance agreement, the process moves quickly. AutoMoney Trust releases the funds directly to the FCA-authorised dealer selling the vehicle. You then collect the car from the dealer.
Your first monthly payment is taken by direct debit on the agreed date, with subsequent payments on the same date each month throughout the term. The interest rate is fixed, so the payment amount stays the same from the first month to the last.
For more on how the loan term affects your monthly payment, see: How does the loan term affect my payments?.
If your application is not approved, you will be told and you will not be charged anything. A decline does not prevent you from applying elsewhere, though it is worth understanding why before doing so. Applying to multiple lenders in quick succession creates multiple hard searches, which can make subsequent approvals harder.
For guidance on next steps after a decline, see our guide on what to do if you have been refused car finance, which covers the most common reasons for refusal and what to do about each one.
The length of your car finance agreement can have a significant impact on both your monthly payments and the total cost of borrowing.
Choosing a longer finance term, such as 60 or 84 months, spreads the cost of the vehicle over a greater number of payments. This can make your monthly payments more affordable, but it may mean you pay more interest overall throughout the agreement.
A shorter car finance term, such as 36 months, usually results in higher monthly payments because the balance is repaid over a shorter period. However, paying the agreement off sooner can reduce the overall amount of interest paid, making it a potentially lower-cost option over the full term.
When choosing the right finance term, it is important to consider your budget, monthly affordability, and how long you plan to keep the vehicle. The best option is one that allows you to comfortably manage your payments without putting unnecessary pressure on your finances.
AutoMoney Trust offers car finance terms from 36 to 84 months, giving you flexibility to choose an agreement that suits your circumstances. Use our car finance calculator to compare different term lengths and understand how your monthly payments and overall costs could change before applying.
Car finance can affect your credit score positively or negatively depending on how you manage your agreement. Making regular, on-time payments can help build a positive credit history and demonstrate responsible borrowing, while late or missed payments can negatively affect your credit score and make it more difficult or expensive to access credit in the future.
If payments are not made on time, they may be reported to credit reference agencies, which can lower your credit score and make future borrowing more difficult or potentially more expensive.
When you apply for car finance, a lender may carry out a hard credit search, which appears on your credit file and can cause a small, temporary change to your credit score. This is a normal part of the application process and helps lenders assess whether finance is affordable and suitable for you.
For more information about how applications are assessed, read our guide on Credit Checks for Car Finance.
With an AutoMoney Trust hire purchase agreement, legal ownership of the car transfers to you only after you have made all of your monthly payments and paid the £10 option to purchase fee at the end of the agreement. Until then, the vehicle remains the property of AutoMoney Trust.
Although you won't legally own the car during the finance term, you are responsible for its day-to-day running costs, including vehicle tax, insurance, MOT, servicing, and maintenance. As the finance provider owns the vehicle until the agreement is complete, you cannot normally sell, transfer ownership of, or make significant modifications to the car without our permission.
It is also important to keep up with your car finance payments, as missed payments could lead to arrears and, in some circumstances, the vehicle may be at risk of repossession if the agreement is not brought back up to date.
Once you have made your final monthly payment and paid the option to purchase fee, legal ownership transfers to you, and the car becomes fully yours with no further finance obligations.
The main difference between fixed and variable car finance rates is whether the interest rate can change during your agreement. A fixed interest rate means your rate and monthly car finance payments stay the same throughout the finance term, giving you certainty over what you'll pay and making it easier to budget. In comparison, a variable interest rate can rise or fall over time, meaning your monthly payments may change.
AutoMoney Trust offers fixed-rate hire purchase car finance only, so you know exactly what your monthly repayments will be for the full term of your agreement. While fixed rates may sometimes be higher than an introductory variable rate, they provide protection against future interest rate rises and make it easier to plan your finances with confidence.
When comparing car finance options, it's important to consider not only the interest rate but also the APR, total amount payable, and the overall cost of borrowing. For more information read our guide on What Is Car Finance APR?.
