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What can I do if I can’t afford to buy or run a car?   

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Having a car is a necessity for many, but with the cost of living rising, people are finding themselves without enough money to cover the basics. So, what do you do if you simply can’t afford one right now? Below are answers to the most common questions about getting and affording a car on a tighter budget. 

What if I cannot afford a car right now?

If getting a car is something you cannot afford for the time being, there may be other more affordable options you can explore. For example, you may want to explore: 

  • borrowing or renting a car for a short period until you can afford one could be another option. 

If you absolutely need a car to get to your destination, then consider arranging a lift via your family or friends, or perhaps using taxis if you don’t need to drive (or be driven) every day. 

Whatever decision you make, try to adjust your budget where possible, so you can set aside some money towards buying a car in the future.

Future car costs to consider 

Other things you may want to think about if you get a car, include the cost of road tax, insurance, MOT and car servicing, etc. Make sure you can afford these additional costs when deciding on whether to buy a car or not.

What is the cheapest way to get a car?

The cheapest way to buy a car is to pay for it (partially or fully) in cash.

If you can fully pay for a vehicle upfront, you’ll own it outright and will avoid having to make interest payments on longer-term finance plans. 

I need a car, but I can’t afford to pay for it outright. What are my options?

If you need a car but don’t have the funds to buy one upfront, there are other options such as car finance. 

Car finance, such as a personal contract purchase (PCP) or personal contract hire (PCH) allows you to get a car quickly, but the interest payments can make it more expensive in the long term. Balloon payments via a PCP plan are a lump sum which is paid at the end of a loan’s term. The balloon payment will be larger than the payments made throughout the original finance contract.

Your credit rating can affect the cost of your car finance agreement.

If you don't have the money to buy a car upfront, then you could consider other options such as peer-to-peer loans (where people lend directly to other individuals) However, it’s worth noting that it could be very difficult to obtain a peer-to-peer loan if you have a poor credit score. Find out more about peer-to-peer loans.

Can I get car finance with little or no credit or a poor credit rating?

Yes, it is possible to be approved for a car with a poor credit rating. But it’s worth noting that being approved for car finance depends on your credit history and eligibility. If your credit score is low, you may have to pay higher interest rates on your monthly payments, making it a lot more expensive in the long run. 

Remember that just because you are approved for a loan it does not mean it will be entirely affordable for you. You'll need to work out a budget and make sure you have money for unexpected expenses such as car repairs and be able to keep up with the payments if your income changes.  

What if I am unemployed?

If you’re unemployed, you may still be able to get a car on finance depending on the finance provider, your credit history, credit rating, and eligibility. Its likely to be a lot harder, with very expensive deals though. It’s also worth noting that if you’re rejected by a finance provider, it will negatively affect your credit score. 

It is always best to carefully weigh up your options, in particular how much you can personally afford to pay and your individual financial circumstances against the loan or finance you are considering.

Other ways to get a cheap car

Helpful sites for new and used cars such as Which?Opens in a new window and Car ExpertOpens in a new window are good information sources for those looking for cheaper cars.

It can be cheaper to avoid second-hand car dealers all together (although they may offer warranties), because they take a cut from the sale from the original seller. 

Make sure you know what you’re doing before you start the buying process so you don’t get ripped off. Check out this guide to buying a used carOpens in a new window

There are also monthly car subscription schemesOpens in a new window in which you pay a monthly fee for the car, and this usually includes costs like maintenance, liability and roadside assistance.

When considering all of these options, it is always best to consider your personal financial circumstances and affordability.

What is the cheapest way to get car insurance?

Make sure you shop around for a good deal which is suitable for you on your car insurance. Websites such as MoneySavingExpertOpens in a new window are a good place to start! Remember that it’s worth doing your own research and do check out sites like Direct Line too. 

Paying annually, considering your cover type, increasing your voluntary excess, limiting mileage, and building up your no claims bonus discount are ways in which your car insurance costs can be reduced. Check out our top 5 tips on lowering your insurance car premium.

Having your car insurance on auto-renewal with your existing provider can also be expensive, as you could be missing out on savings with another provider. Your insurer can also potentially push your premiums up this way as well.

What happens if I can’t afford my car insurance?

If you are having serious problems paying your car insurance, then it is best to speak with your insurance provider immediately to figure out a suitable solution going forward. Missing or making a late payment could have serious consequences. You could be charged late or failed payment fees by your insurance provider, as well as missed payment fees from your bank if your direct debit fails. It is always recommended to contact your provider directly and as soon as possible.

What do I do if I can’t afford car repairs? 

If you find yourself in a situation where you are not be able to pay for car repairs, then it may be worth looking at your options One of the first things you could do is check your warranty to see if you could get your repairs covered that way. Buying used parts and talking to your mechanic about the best way forward could be another way of resolving any issues.

As a driver, you are obliged to ensure and check that your vehicle is safeOpens in a new window to drive at all times.

What happens if I can’t afford to pay my mechanic?

Speak to your mechanic and see if you could be offered an instalment plan to pay off any outstanding repair costs. Companies such as bumperOpens in a new window offer monthly repayment plans for car repairs. Companies that offer instalment services usually offer 0% interest-free options ranging from four to six months. But it is worth noting that this type of instalment plan will usually involve a credit check, and it is always best to shop around to find a deal that works best for your finances if this is something you are considering.

It is always recommended to visit more than one mechanic to check prices, thus making sure that you can get the best price for repairs. It is also a good idea to take someone who is experienced with cars along with you to the mechanics where possible, to minimise the likelihood of being ripped off.

If you find that you are having to spend a significant amount on repairs then you may need to consider getting rid of your car, rather than continuously paying for repairs which can see you spending more money in the long term. It could be worth putting any extra money that has been going on repairs towards a temporary solution like using public transportation or saving up for a newer vehicle.

What happens if I get parking tickets that I can’t afford to pay?

If you have a speeding fine or parking ticket that you cannot afford to pay, then you should contact your local authority and ask what options you have in resolving this issue.

Some councils can arrange for you to pay for your parking tickets in instalments. 

It’s important to seek advice as soon as possible, especially if you’ve got other debts. 

Can a parking ticket affect your credit score?

A parking ticket will only affect your credit score if a county court judgment (CCJ) is given against you if you’ve been taken to court over non-payment of the ticket. 

If you have a parking fine you’re struggling to pay, it could signify a larger debt problem. You can seek help further from us, StepChangeOpens in a new window National DebtlineOpens in a new window or Citizen’s AdviceOpens in a new window

What happens if I can’t afford my car finance? 

If you are struggling or have fallen behind with your car finance payments, it’s incredibly important to talk to your car finance provider to see what solutions are available ASAP. 

Options such as extending the deal term to lower monthly repayments or a payment holiday could be possible depending on the provider, the type of agreement you have and the circumstances.

It is also worth noting that the car belongs to the lender until the owed balance is paid off.

StepChange also has some guidance on car finance debtOpens in a new window as well. 

I can’t afford my car anymore - What should I do? 

If you can no longer afford to keep your car, then you may need to consider selling your car (if you bought it outright), returning or refinancing your vehicle if you purchased it via car finance.

Please take into consideration your financial circumstances while making a decision. There are always other alternatives such as using public transport, car hiring or car sharing or borrowing, or taxis depending on the frequency of your journey needs.

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