If you only have a provisional driving licence, you might be wondering if it’s possible to get car finance. The process can be a little tricky, but it’s not impossible.
Whether you’re learning to drive or just waiting to take your test, you have options. This guide will help you understand what’s involved and what to expect.
Understanding car finance and its requirements
Car finance is a way to spread the cost of a vehicle over a period of time rather than paying for it upfront. Lenders typically have a set of conditions that borrowers need to meet before they approve a finance agreement. These often include a stable income, a good credit history, and proof of identity.
One of the key factors they consider is whether you have a full driving licence. A full licence is often seen as a sign that you are roadworthy and will actually be using the car you are financing.
However, this doesn’t mean you are automatically excluded from financing a car if you only have a provisional licence. There are still some routes you can explore, though they may require extra effort and flexibility.
Why a full licence matters to lenders
Lenders prefer applicants with full licences because it lowers their risk. If you only have a provisional, they might worry that you won’t pass your test and won’t be able to drive the car legally, your insurance will be higher, which might affect your ability to afford repayments, and you may not be able to use the car as expected, making it harder to justify the finance agreement.
That said, having a provisional licence doesn’t automatically mean you’ll be rejected. Some lenders are more flexible, and there are alternative approaches that could work for you.
Can you get car finance with a provisional licence?
Yes, but it depends on the lender. Some providers will only work with drivers who have a full licence, but others are open to approving finance for provisional licence holders under certain conditions. Here are some of the ways you might still be able to secure finance.
Choosing a specialist lender is an option, as some companies specialise in providing finance for learners. These lenders understand that you are working towards your full licence and may be willing to accept your application. Getting a guarantor can also help, as a guarantor is someone with a good credit history who agrees to take responsibility for the repayments if you are unable to make them. This could be a parent, guardian, or another trusted person.
Improving your credit score can make a big difference. If you have a good history of managing credit, lenders may be more willing to approve your application despite your provisional licence. Providing proof of stable income is another way to strengthen your case, as lenders want to see that you have a steady income and can afford the monthly repayments.
Making a larger deposit can also help, as a bigger upfront payment reduces the lender’s risk. If you can put down a sizeable deposit, it might make them more willing to approve your finance deal. Opting for hire purchase instead of PCP might be more accessible than personal contract purchase (PCP) because they are less dependent on predicted car value at the end of the agreement.
Challenges you may face with a provisional licence
While it’s possible to get car finance with a provisional licence, you may come across certain difficulties. There are fewer lender options, as many mainstream lenders require a full licence, which means you might need to go with a specialist provider. Higher interest rates can also be an issue, as since you are seen as a higher risk, you could face higher interest rates, making your repayments more expensive.
Stricter conditions may apply, with some lenders imposing extra requirements, such as a guarantor or a larger deposit, before approving your application. Insurance costs can also be a challenge, as car insurance is typically more expensive for provisional licence holders, which could make running a car more costly overall.
Is it worth financing a car before passing your test?
Before applying for finance, it’s important to think about whether it’s the right move. While having your own vehicle can be useful for extra practice and getting comfortable behind the wheel, there are some factors to consider. If you fail your test, you could be stuck paying for a car you can’t drive on your own. Insurance premiums for provisional drivers are often high, which might make monthly expenses difficult to manage.
Depreciation is another issue to think about, as if you’re buying a brand-new car, it will lose value over time. By the time you pass your test, it might be worth less than when you started your finance plan. That said, if you are confident that you will pass soon and can manage the costs, it can be a useful step towards car ownership.
Alternative options to consider
If you’re struggling to get finance with a provisional licence, there are other ways to get behind the wheel. Saving up and buying a used car outright can be a good alternative, as if finance is proving too difficult, saving up and purchasing a cheaper used car might be a better option.
Leasing a car through a family member could also be an option, as some finance agreements allow a family member to take out the contract on your behalf, as long as they are willing to take responsibility for the repayments. Waiting until you pass your test might be worth considering, as if you’re close to passing, it could give you access to better rates and more lender options.
