When applying for any form of finance, no one wants to be rejected. Being refused finance means you have to apply somewhere else, and can even affect your credit rating (unless you apply to a nice company like Creditplus that use a soft credit search – find out more). In the past, this led to a rise in companies offering “Guaranteed Car Finance”. A company able to guarantee your application will be accepted? It almost seems too good to be true. Well, that’s because it is.
It’s pretty self explanatory. Guaranteed car finance was a way for unscrupulous companies to try and encourage customers to apply for finance. Fear of rejection is a big problem for some customers, especially those with a bad or poor credit rating. Being enticed to apply with the promise that you’ll be accepted no matter what can be very appealing to those who need a car loan or finance package to purchase a new car. Once the application has been completed, the truth would be revealed. Either the car finance package was not guaranteed, or the rates advertised were dramatically different to the rates offered. Applying for guaranteed car finance may mean you are desperate to be accepted. This makes you an easy target to companies looking to pressure customers into accepting a finance package with unfavourable rates.
The truth is, no company can guarantee car finance. To be accepted for a car finance application, you’re credit history and personal circumstances will be examined in detail by finance providers. There is no way a company can provide a guarantee before you’ve even completed an application form.
Since the economic crisis and credit crunch, the Financial Conduct Authority or FCA (formerly known as the Financial Standards Authority) have been working hard to protect consumers from unfair or illegal practices previously carried out by lenders. They have been looking at all aspects of finance and lending to ensure that 1) consumers are being treated fairly, 2) they are being given the information they need to make the right decision based on their own circumstances, and 3) that companies are not pressuring or misleading consumers into accepting a finance agreement.
Guaranteed car finance was one of the terms prohibited by the FCA. No company regulated by the authority can advertise guaranteed car finance, nor can finance brokers. No lender should be able to guarantee a car finance deal without conducting in depth checks on a customer’s credit history and financial status. That’s why they cannot confirm whether you will be accepted for car finance until they have processed your application fully.
These companies are either unregulated by the FCA or risking a very hefty fine. You will notice that some companies who have promoted guaranteed car finance on their adverts will not have any mention of it once you reach their site. Using unregulated companies is very dangerous for consumers, opening yourself up to exploitation and fraud. Put it this way. Would you get inside an airplane that was not regulated by the Civil Aviation Authority? Sure, there’s a chance you’ll be fine, but if the worst does happen, you will have no protection against lost money or bad deals.
You can’t get guaranteed car finance from a reputable, regulated company. So how can you ensure you get a good finance deal? If you are concerned about being rejected, then you will want to apply to a car finance company that conducts a soft credit search. This system allows you to shop around without risking your credit file. Creditplus are currently the only car finance broker to conduct a soft credit search for everyone who applies with us. Not only that, we also compare over 100 lending options to present to you the best deal available based on your circumstances. That way, you will see all the options available to you before you commit to a deal, and can be assured that if you don’t get the car finance package you want with us, it won’t affect your credit rating.
Read more on Creditplus’s ethical lending policy to see how we put empowering our customers with the information they need to make the right decision at the forefront of our thinking. You can also find answers to all your car finance questions in our comprehensive help and advice centre. Creditplus also have a glossary page dedicated to guaranteed car finance which you may find useful.
Ready to apply? It takes just two minutes to complete our application form. Once completed, one of our customer advisors will soon be in touch to talk you through the car finance process. Apply online today and start on the road to your new car.
Do you have a bad credit rating? Then you may have been seeking guaranteed car finance to ensure you get accepted. Even though we cannot guarantee you will be accepted, we do have a panel of lenders specialising in those with a bad credit rating. Find out more details over at our bad credit car loans page.