Car finance with bad credit
Problems with the credit supply in the UK and also other parts of the world such as the United Stats began in the last three years with the advent of the so called credit crunch and the sub prime mortgage collapse.Essentially caused by over lending to customers that either couldn’t afford the repayments or whose credit profiles should have ruled out them getting approved it resulted in many financial institutions collapsing or pulling out of the market to lick their wounds. What we saw in the UK in the car finance markets was a huge reduction in the number of lenders that we could approach to finance our customers car needs. Fortunately we have a number of specialist companies that we work with and can offer car finance with bad credit products to our clients and this allows us to offer both car leasing and standard hire purchase repayment finance on any UK car.
The way that the Non Prime market works is very similar to the Prime arena in that a customer will fill in an application that takes basic information such as name,age and address history and this is used to match the applicant against a credit search to check their history out. This is the point some people begin to panic and say ”whats the point in a credit search as all that will happen is i will be declined?- right?” But what you need to remember is that every company has its own criteria in which it lends and so while a high street bank may look at your profile and only approve customers with the top 95% ratings well our lender take a different approach. With car finance for bad credit the underwriters take a more balanced approach and use the sum of the parts to view an overall picture. The main areas that are looked at are traceability, affordability and then finally previous and existing debts. Lets look at them in order and you will see what we mean!
Traceability
This takes into account data held on both the voters roll to see if the applicant has lived at the addresses they say they have – or if any others pop up that havent been mentioned. Homeowners will usually also show on the land registry for the property which is another proof of address.Those with several properties will often show at different addresses and so any credit problems at different areas will usually be tied together. Whenever someone has a finance agreement – be it car,television or bank loan etc the address that it is applied from will also be listed. The main reasons for traceability being taken into account is it shows if you are the type of person who is easily located should the need arise perhaps if you stop paying your car payments!
Affordability
In offering bad credit car finance the lenders will also need to know that you can afford to make repayments compared to your income. Dependent upon the type of application it can range from 25% of your monthly income being allowed for your car finance payment down to 30% of your disposable income after outgoings are deducted. The type of application will be decided instantly when you are credit searched as those with much higher levels of debt or major factors like bankruptcy will usually find the application goes into more depth.
Previous and existing debts
This is an area that will consider your current state of play in that if you have lots of bad credit items that are 4 or 5 years old then your case will be strengthened. Whereas if the lender can see that you are still defaulting or missing payments upto the time of your new car finance proposal then it doesn’t look great. What we are looking for are strong current circumstances as opposed to what has occurred in the past. If the applicant has had several car agreements that have failed in the last few months – again this doesn’t look great. Every case is different though and we can look at everything including existing bankruptcy cases so please remember that our lenders will always look at the bigger picture.
In summary
MSG Cars are one of the UK’s top providers of car finance with bad credit products and have a great team of helpful and friendly staff – just check out our customer testomonials! If you are in the market for a new car and have already been declined just give us a call on 0161 367 7590 and we will be able to tell in an instant if we can help you. Some of the products we offer include business lease purchase,contract hire,personal car leasing and typical car finance.
