Can you take out car finance for someone else?
In short, no. If you mislead a dealership or lender and take out car finance in your name to buy a car on somebody else’s behalf, it’s fraud.
Even if you were upfront about what you wanted to do – a practice known as an ‘accommodation deal’ – lenders won’t usually do it because of the risk they won’t get their money back.
What are the options for helping a family member buy a car?
While you can’t take out car finance for somebody else, there are other ways to financially help family (or friends) get a new car.
Give a cash gift
If you can afford to, the easiest way to help is to hand over money as a gift. This could help them buy a car outright or put down a deposit to take out car finance themselves.
Make a joint finance application
If you’re willing to take on joint ownership of the car, you could make a joint application for car finance. This will mean you’re both jointly responsible for the repayments.
Lenders will check both of your credit histories and financial circumstances to determine whether you’re jointly eligible.
If one borrower is unable to make the repayments (due to a job loss, for example), the other person is jointly responsible.
Any missed payments could damage both your credit scores.
Act as a guarantor
A guarantor is someone that can repay a loan or – in this case – the car finance if the main borrower can’t make the payment. A guarantor can be a family member or close friend.
If you want to be a guarantor for someone else, you must:
Be 21 or over
Have a good credit history
Not be financially linked to the main borrower
Before you consider a guarantor loan, think about whether you’ll be able to afford the repayments if the person you're acting as a guarantor for can't pay. If you’re called on to help pay but can’t, you could face legal action and damage to your credit score.
Read more about what type of car finance is available.
FAQs
Can you transfer car finance to somebody else?
No, you can’t take out car finance to buy a vehicle and then transfer it to another person.
Lenders assess each applicant for finance on their own individual merits, including their credit history and ability to keep up with repayments.
Is it possible to finance two cars at once by yourself and give one to a family member?
It is possible to finance two cars at once, but only if you keep them both to use yourself.
If you were to give one of the cars to somebody else, this would be considered to be an accommodation deal which, as mentioned above, lenders don’t typically allow.
Can someone with bad credit get car finance?
Yes, it's sometimes possible to get car finance with bad credit, but it may come with higher interest rates and stricter terms. Some lenders are happy to look at your individual situation to determine if they can approve you for a loan.
Consider improving your credit score or exploring specialist lenders who cater to those with poor credit histories.
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