Joint
car finance

CarFinance guides you through a simple application process for joint car finance. Partnering with another person to share the financial load increases your approval chances and expands your vehicle options. Discover how easy it is to apply and benefit from joint car finance.

What is joint car finance?

Joint car finance allows two people to share a car loan. Both are responsible for monthly repayments, making the application stronger and possibly securing better terms. Lenders see both applicants as equally responsible, enhancing eligibility for financing.

When you apply for joint car finance with us, we run an initial soft credit check on both applicants. This does not affect either of your credit scores. If accepted, we discuss your options to ensure the agreement is affordable for both parties.

We only perform a hard credit check when you decide to proceed with an agreement. We then draw up contracts for both parties to sign.

Joint car finance has both advantages and disadvantages. It’s crucial that both you and your co-applicant understand how it works.

How does a joint application work?

The joint car finance application process is straightforward. First, the applicant with the stronger credit score enters their details. Then, the co-applicant's information is added, creating a combined application.

When applying with us, your combined monthly income must total £1,300 after tax. If you are unsure, you can view the sources of income we accept.

Start by using our car finance calculator. This tool gives you a clear idea of your potential joint car loan, based on the repayment term and amount you wish to borrow.

Once satisfied, get a quote by speaking to our team. Please note that joint applications need to be made over the phone. Don’t worry, our team is here to guide you through the process.

Can I make a joint application for car finance?

Yes, you can make a joint application for car finance, certain eligibility requirements must be met. Both applicants must live at the same address and sign the Hire Purchase Agreement. Lenders also consider factors such as age, residency, income, and credit scores. Ensuring both applicants meet these prerequisites is essential for a successful joint car loan application.

Your chances of approval may be higher with joint car finance. If your income alone is insufficient, your partner's income can help meet the required amount.

Understand your legal obligations as a co-signer. Read the information on joint liability below. Note that if either of you has bad credit, a joint application will link your finances with credit reference agencies, potentially affecting both your and your co-signer's ability to obtain future credit.

Types of car finance available for joint applications

Joint financing is available for various car finance options, including Hire Purchase (HP), Personal Contract Purchase (PCP), and personal loans. These options provide flexibility, allowing you to choose a finance arrangement that suits your needs.

• Hire Purchase (HP): Spread the cost of the car over fixed monthly repayments. Once all payments are made, you own the car.
• Personal Contract Purchase (PCP): Lower monthly repayments with the option to return the car, trade it in, or pay a final lump sum to own it.
• Personal Loans: Borrow a fixed amount to purchase the car outright, then repay the loan in monthly installments.

These options can help you secure affordable monthly repayments and find a finance plan that fits your budget.

Car finance joint application with bad credit

Yes, you can get joint car finance with bad credit. A co-applicant with a good credit history can offset your poor credit, increasing the chances of approval. Even with a less-than-perfect credit score, joint financing remains possible.

Advantages and disadvantages of a joint application

Considering joint car finance? Understanding the advantages and disadvantages is crucial to making an informed decision that aligns with your financial goals.

Pros

• Improved loan eligibility: A joint application can enhance loan eligibility. Combining the financial strengths of two applicants makes you more appealing to lenders, increasing the likelihood of approval. A strong credit history from one applicant can compensate for the other's weaker profile.
• Afford a newer car: Joint financing allows you to afford a newer and higher-spec car. Sharing financial responsibility lets you consider cars that may have been out of reach individually.
• Split costs: Sharing the financial burden means both individuals contribute to the monthly repayments. This results in a more manageable and affordable repayment schedule, making it easier to meet financial obligations. Splitting costs is a significant advantage for budgeting a high-value purchase like a car.
• Both liable for debt: Both applicants are equally responsible for repaying the loan. If one person misses payments or faces financial challenges, it can negatively impact both credit scores. The financial actions of one party directly affect the other's creditworthiness.
• Impact on credit scores: Missed payments or defaults on the joint car finance affect both applicants' credit histories. This shared responsibility makes clear communication and financial transparency essential to avoid adverse effects on credit scores.
• Joint decision-making: Joint financing requires agreement on various aspects, including the choice of the car, the loan term, and other financial decisions. This collaborative decision-making necessitates effective communication and compromise to ensure a smooth car financing experience.

Cons

• Improved loan eligibility: A joint application can enhance loan eligibility. Combining the financial strengths of two applicants makes you more appealing to lenders, increasing the likelihood of approval. A strong credit history from one applicant can compensate for the other's weaker profile.
• Afford a newer car: Joint financing allows you to afford a newer and higher-spec car. Sharing financial responsibility lets you consider cars that may have been out of reach individually.
• Split costs: Sharing the financial burden means both individuals contribute to the monthly repayments. This results in a more manageable and affordable repayment schedule, making it easier to meet financial obligations. Splitting costs is a significant advantage for budgeting a high-value purchase like a car.
• Both liable for debt: Both applicants are equally responsible for repaying the loan. If one person misses payments or faces financial challenges, it can negatively impact both credit scores. The financial actions of one party directly affect the other's creditworthiness.
• Impact on credit scores: Missed payments or defaults on the joint car finance affect both applicants' credit histories. This shared responsibility makes clear communication and financial transparency essential to avoid adverse effects on credit scores.
• Joint decision-making: Joint financing requires agreement on various aspects, including the choice of the car, the loan term, and other financial decisions. This collaborative decision-making necessitates effective communication and compromise to ensure a smooth car financing experience.

How joint car finance can affect your credit score

Understanding the impact of joint car finance on your credit score is vital. The application process involves eligibility checks, leading to both soft and hard inquiries on your credit file. A new car loan might initially lower your credit score due to the hard inquiry and increased debt. However, timely repayments can improve your credit score over time, demonstrating financial responsibility. Conversely, if the co-applicant misses payments or defaults, it negatively affects both your credit scores. This shared responsibility underscores the importance of clear communication and financial reliability between both parties.

Who owns the car in a joint car loan?

The lender owns the car until the loan is fully repaid. The primary registered keeper has possession and can use the car, but the lender retains legal ownership through a conditional sale agreement.

Once all repayments are completed, ownership transfers to both applicants. This distinction ensures that, while you can drive and maintain the car, the lender holds the title until the final payment is made. Understanding this dynamic helps clarify the legal aspects of your jointly financed vehicle.

Is joint car finance right for me?

Deciding if joint car finance is right for you depends on various factors. If you struggle to qualify for a loan on your own, have a partner with a strong credit history, and want a way to afford a car, a joint application may be suitable.

1. Income: Ensure your combined income is sufficient to manage the loan.
2. Credit history: If one of you has bad credit, weigh the potential impact on your application and future creditworthiness.
3. Financial commitment: Assess your ability to manage the financial commitment jointly.

Joint application vs guarantor finance – which is better?

Understanding the differences between joint applications and guarantor finance is crucial. In a joint application, both applicants share equal responsibility for loan payments. This means that if one person misses a payment, it affects both credit scores. In contrast, guarantor finance involves a guarantor who steps in only if the primary borrower fails to meet their repayment obligations. The guarantor is not responsible for monthly repayments unless the primary borrower defaults.

Choosing between the two depends on your circumstances. If you and your partner have stable incomes and want shared responsibility, a joint application might be better. On the other hand, if you have a weaker credit profile and need someone to back you up without sharing monthly repayments, guarantor finance could be the right choice. Evaluating your financial situation and discussing with your co-applicant or guarantor will help you decide the best option.