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Guarantor Car Loans

Finding it tough to get car finance on your own? You might be eligible for a guarantor loan!

Guarantor car loans are a lot like personal loans but the big difference is that you’re not going it alone. Instead, you’ll need to appoint a guarantor – someone who can step in and make repayments if you can’t.

If you’ve got a bad credit rating - or don’t have a credit history at all - guarantor car finance could work for you.

Can I get car finance with a guarantor?

The short answer is yes – there are guarantor car finance loans.

If you’re a young driver or someone applying for car finance for the very first time, you might find that car finance with a guarantor is an option available to you.  

And if you do keep up with your repayments, you could demonstrate that you’re able to pay your bills on time and maybe even end up improving your credit score.  

What is guarantor car finance?

Guarantor car finance is a type of car finance loan where someone else (usually a close friend or family member) guarantees that the loan repayments will be made if you don’t keep up with your repayments.

The loan is usually paid to your guarantor and then they’ll release it to you. It’ll be your responsibility to make the loan repayments direct to the lender.

How does guarantor car finance work?

A guarantor loan works in a similar way to a personal loan but instead of the loan being your sole responsibility, you’ll need to nominate someone who can back up the loan and step in to make repayments if you can’t.

This gives lenders an extra level of security, especially if you don’t have a credit history that can help show what kind of borrower you’d be.

How is a guarantor loan different to other loans?

The main difference with a guarantor loan is that there is not just a two-way relationship between you and your lender, there is a third party involved; the guarantor.

Basically, the guarantor agrees to repay the finance to the lender in the event that you default on the loan (i.e. miss repayments).

Guarantor car finance can be suitable for people who have a less than perfect credit history and/or have difficulty in getting approved for finance.

If you keep up with the repayments, it can help to rebuild your credit score too.

Guarantor car finance for young drivers

As a young driver, you may not have built up much of a credit rating yet – or even have one at all! That’s completely understandable but can also mean that it’s more difficult for you to find car finance.

If you have someone who is willing to act as a guarantor, then it’ll be their credit history – not just yours – that is taken into account when the lender makes their decision.

Who can be a guarantor for car finance?

Choosing a guarantor can be tough. It should be someone you’re comfortable having those awkward conversations about money with, as well as someone who can afford to step in if you miss a payment. That’s why guarantors are usually close friends or family members.

Being a guarantor is a big commitment, so trust is important. And on a more practical note, guarantors usually need to be aged between 18 and 75 and have a good credit history. Some lenders ask that guarantors are over 21 and homeowners.

Guarantors also need to be aware that they can face financial consequences if the loan is not repaid. Their credit score could be affected and, if they’re a homeowner, their property may be at risk of repossession.

Do guarantors get credit checked for car finance?

Yes – lenders will run a credit check on your guarantor. This is because they’ll be responsible for covering repayments if you can’t, so the lender will be looking to find out what kind of borrower they are.

Your guarantor may want to check their credit score before you apply for guarantor car finance to ensure all their information is correct and up to date.

Can I be a guarantor with bad credit?

No – it’s unlikely that you could be a guarantor with bad credit. Usually guarantors need to have a good credit score to reassure lenders that they can be relied on to make payments if the borrower can’t.

Does the guarantor need to be a homeowner?

It depends on the lender. Some lenders will require a guarantor to be a homeowner while others may consider renters who have been at the same address for many years and have an excellent credit history.

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* The UK's number one online car finance broker by unique users to the website. Based on Hitwise data – 1,746,657 to CarFinance 247 vs. 666,020 for nearest competitor. January to December 2019.

96% of our customers recommend us: † Based on feedback left on independent review site Reviewcentre. May 2019.

CarFinance 247 is a trading name of CarFinance 247 Limited, a credit broker and insurance intermediary, and 247 Money Group Limited (247 Money), a lender. Both companies are part of the 247 group of companies.

CarFinance 247 is authorised and regulated by the Financial Conduct Authority under reference number: 653019. Registered office: Universal Square, Devonshire Street North, Manchester, M12 6JH. Registered in England. Company registration no. 06035525. Data Protection Registration Number Z1897658.

247 Money is authorised and regulated by the Financial Conduct Authority. Registered office: Universal Square, Devonshire Street North, Manchester, M12 6JH. Registered in England. Company registration no. 10989530. Data Protection Registration Number ZA456831.

All finance is subject to status and income. Written quotations on request. CarFinance 247 can introduce you to a limited number of finance providers, including 247Money, based upon your credit rating and will receive commission for such introductions.

† We do not charge a fee for arranging the finance, however some of our lenders may charge a fee. Your account manager can provide more information on this

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