8 September 2022 Concept Car
Are you an expat in the UK looking for a car loan?
Then you’ve come to the right place. At Concept Car Credit, we specialise in offering car finance for new UK residents and bad credit car finance – regardless of address history.
In this feature, we’ll get into the reasons why applying for a car loan is so hard in the UK right now and explain what you can do to improve your chances.
If you just want to apply for a car finance deal and don’t want to wade through all the information, just give us a call to discuss your application. Or head right over to our online form, where you can already send us most of the information we’ll need to assess your case.
One of our friendly experts will then get in touch with you swiftly.
As an expat, you might often feel quite alone. You’re in a foreign country, possibly far away from home, trying to orientate and organise yourself – and then you can’t even get a car loan or a mortgage, even if you’re earning a decent wage!
That said, you’re not the only one facing these issues.
For one, UK citizens returning from an extended stay abroad are pretty much in the same boat as you. Effectively, they, too, can get snubbed by banks and credit unions.
For very much the same reasons, students and first-time car buyers will also come to us looking for a suitable car finance agreement because they’ve been rejected elsewhere.
No need to despair, though. We’ll help you get car finance without an extortionate annual interest rate.
As we’re sure you know, finance is a business based on the correct assessment of risk: the lender gives you money and receives it back plus interest. The system only works if the large majority of borrowers actually follow this simple plan and do not default on their credit.
The lower the risk, the better and the cheaper the loan becomes. The higher the risk, the higher the interest rate, to cover the lender in case something goes amiss. In case of a very high default risk, some lenders may refuse to extend credit because they feel things are getting too dangerous. If that’s the case, you’ll have to come up with an alternative plan.
We’ve written about this a lot over the years on our blog, explaining why we believe we can still offer you a great deal in cases where most banks are no longer willing to do so.
In this scenario, the bank has nothing whatsoever to base its decision on. They can neither set interest rates very high nor very low. They cannot set them at all.
This problem applies equally to expats from abroad, returning expats from the UK, and students or first-time car buyers.
Further Reading:
The guide to student car loans
Especially if you’ve just come to the UK, you may not even have a registered UK address yet, which is quite possibly an even bigger red light for lenders. Thankfully, you can remedy this very easily by asking your local council to put you on the electoral roll.
Which is the fact that you cannot use your credit history from abroad nor your credit score for your current application.
The reason for this is that credit scores mean very different things in different countries and are by no means comparable. Depending on where you’re from, they may also not be as tightly regulated. All of this means that lenders do not trust any ratings from outside the UK.
Although the credit score has lost in importance over the past few years, banks can also start to feel pretty fragile if they’re forced to forego it altogether.
Potential lenders can, through a costly and complex process, ask for your foreign credit score to be verified here in the UK. Once completed, lenders can then safely juxtapose it with those of UK borrowers and calculate a fair and representative rate.
That said, this service is not open to everyone. In fact, it is reserved for the privileged few – so don’t count on your employer being able to facilitate this procedure (although it can’t hurt to ask).
As if all of that wasn’t enough, expats can face even more obstacles:
Even if you can find a dealer willing to lend to you, interest rates can be astronomical.
Let’s take a look at some of the solutions at your disposal to improve your chances of success when looking for car finance as an expat in the UK.
This is quite clearly where it all starts. A UK bank account instantly instils a bit of trust in the lender, regardless of everything else.
It means the money is actually easily accessible – and it should be easier to convert it to pounds, too.
It also suggests you are here to stay for a little bit longer and not planning on leaving again as soon as possible. Stability is a top priority for car finance providers.
As mentioned, the lack of a comparable credit history is the main reason why you are finding it hard to get credit in Britain (or anywhere else, for that matter – the problems expats are facing are pretty much universal!).
So, the best and most helpful thing you can do is to gradually build a good credit score yourself. This is how it works:
If you’re currently getting paid in a currency other than sterling pounds, it’s worth asking if you can be paid in pounds instead.
There are disadvantages to this step, as it means that your wage can end up being worth a lot less if the pound drops in value against the currency of your home country when you return.
That said, this can make a huge difference in terms of getting a loan.
If you’ve only just arrived in the UK from another country, your chances of actually getting approved for a car loan are very slim, regardless of your particular financial or employment situation.
Even if you have a helpful employer, earn a decent wage, and have taken all the necessary steps towards getting car finance, things may take some time.
In these cases, it is definitely worth it to consider a few alternatives to buying a car:
Unlike most lenders, Concept Car Credit specialises in non-credit-score car finance. As long as you have a European or UK driving licence, we try to help anyone put at a disadvantage by the current system. This can be because their credit rating is low, their income is below average, or they haven’t built a credit history yet.
Our approach is based on the idea that ratings are usually no sensible indication of your current spending power. Instead, we look at your wage, your spending, and how much you can safely commit to each month, with only a soft credit check taking place.
Most of our loans work with lower monthly payments and longer terms. This reduces the risk of a default and allows you to stabilise your situation while you’re building a new home for yourself.
Interested in expat car finance from us? Then get in touch now!
Our phone number for all questions or a first quote: 0800 093 3385.
Our contact form for applying directly for a loan.
8 September 2022 Concept Car
