Self-employed
car finance

What is self-employed car finance?

Self-employed car finance works much like standard car finance, so you can spread the cost of a vehicle through monthly payments. The key difference is how lenders assess eligibility, as self-employed applicants often need to provide additional proof of income.

With a car loan, the lender pays the dealership directly for the car. You then repay the loan in fixed monthly payments. Depending on the finance type, you might need to make a final payment to become the legal owner of the vehicle.

Can I get car finance when I'm self-employed?

You can get self-employed car finance, but approval depends on your proof of income and credit history. Some lenders see self-employed applicants as higher risk because income can vary from month to month. This makes it harder to get approved through mainstream lenders, who often have strict loan requirements.

You don’t have to rely on high-street banks. Some credit brokers work with specialist lenders who understand self-employed income and offer flexible car finance for self-employed applicants. These lenders assess your full financial situation rather than just your credit score.

At Carboom, we partner with a trusted panel of lenders who offer finance options for both personal and business use. Our team will help you find a car finance deal that fits your budget and monthly payments even if you have a bad credit — so you can get behind the wheel with confidence.

Can I get car finance if I'm self-employed with bad credit?

Having bad credit doesn’t mean you can’t get self-employed car finance. While some lenders have strict rules, specialist lenders offer options specifically designed for applicants with poor or bad credit histories.

You can still get approved, even if you’ve had an IVA (Individual Voluntary Arrangement), CCJ (County Court Judgment), DRO (Debt Relief Order), or DMP (Debt Management Plan). These lenders don’t just look at your credit score—they also consider your income, expenses, and ability to manage monthly payments.

Checking your eligibility won’t damage your credit score. Lenders start with a soft search, which shows potential offers without affecting your credit report. A hard search only happens if you choose to proceed and give your consent.

At Carboom, we work with specialist lenders who understand the challenges of self-employed income and bad credit. You can start with a soft search today and find out what car finance options for self-employed with a bad credit score are available—without impacting your credit score.

Is it harder to get car finance if you're self-employed?

You might find it harder to get self-employed car finance because many lenders prefer applicants with a fixed salary. Self-employed income can be less predictable, which makes some lenders cautious. However, your credit score and ability to meet loan requirements play a big role in approval.

Even with an irregular income, you can still find car finance for self-employed individuals. Some specialist lenders focus on affordability rather than employment type and will assess your overall financial situation. Key factors they consider include:

• Credit score – A higher score improves eligibility and influences the interest rate offered.
• Proof of income – Recent trading accounts, tax returns, and bank statements show you can afford monthly payments.
• Financial stability – Consistent income and manageable debts build lender confidence.
• Loan requirements – Each credit broker and lender sets different eligibility rules for self-employed car finance.

Keeping your financial records organised and providing clear proof of income can improve your chances of approval. At Carboom, we work with a trusted panel of lenders who offer flexible car finance for self-employed UK applicants even with a bad credit score, helping you find a deal that suits your needs.

Types of car finance if you're self-employed

You have several options when looking for self-employed car finance, each with different payment structures and ownership terms. Choosing the right one depends on your budget and whether you want to own the car at the end of the agreement.

• Hire Purchase (HP) – You pay a deposit, then make fixed monthly payments. Once you’ve made the final payment, the car is yours. This is a good option if you want to own the vehicle outright without a large lump sum at the end.
• Personal Contract Purchase (PCP) – Your monthly payments are usually lower because a balloon payment is due at the end. When the agreement ends, you can return the car, part-exchange it for a new one, or pay the final amount to keep it.
• Personal Loan – You borrow money from a lender, buy the car outright, and repay the loan in fixed instalments. You become the legal owner immediately, but approval depends on your credit score and financial history.

Some lenders have different loan requirements, so it’s worth checking what suits your budget and future plans. If you’re unsure, comparing car finance deals can help you find the best option. At Carboom, we work with a trusted panel of lenders to help you secure the right self-employed car finance for your needs.

How to apply for car finance when self-employed

Getting car finance when you're self-employed is simple, and you can check your options without affecting your credit score. The process is designed to be quick and stress-free. Here’s how it works:

1. Get an online quote – Fill out a short form in minutes. A soft check is carried out, so your credit score won’t be impacted. This helps you see what finance options are available.
2. Find a car – Choose a car from any trusted dealership, knowing you have a finance deal in place.
3. Complete your finance – Our team will guide you through the final approval and paperwork, ensuring everything is sorted before you drive away.

With an easy online quote, a soft check, and expert support at every stage, applying for car finance as a self-employed has never been more straightforward.

Will applying for finance affect my credit score?

You might worry that applying for self-employed car finance will hurt your credit score, but that’s not necessarily true. Lenders start with a soft search, which checks your eligibility without leaving a mark on your credit report. This allows you to explore your options without any risk to your credit rating.

A hard search only happens if you decide to go ahead with the application and give your consent. Unlike a soft search, a hard search leaves a visible record on your credit report and may temporarily impact your credit score.

At Carboom, we start with a soft check to help you see what car finance options for self-employed are available before committing, even if you have a poor or bad credit rating. Get an online quote today and find out what you could be approved for—without affecting your credit score.

Advices for self-employed

You can improve your chances of getting self-employed car finance by preparing your finances before applying. Lenders assess your credit history, income stability, and financial records, so taking the right steps can make approval easier.

1. Check and improve your credit history – Reviewing your credit history helps you spot errors or outstanding debts that could affect your approval. Paying bills on time and reducing debt can boost your credit score, making lenders more likely to approve your application.
2. Register on the electoral roll – Being on the electoral roll confirms your identity and address, which helps lenders verify your details. Many lenders see this as a sign of financial stability.
3. Organise your trading accounts – Keeping accurate trading accounts and tax records shows lenders that your income is stable. Self-employed applicants who provide clear financial proof have a higher chance of approval.
4. Consider a larger deposit – A higher deposit reduces the total amount you need to borrow, improving your chances of getting approved. It can also lower your monthly payments and reduce the overall cost of credit.
5. Use a guarantor if needed – If your credit history is poor, a guarantor with a strong financial background can help secure better finance options. This gives lenders extra reassurance when reviewing your application.