Best bad credit car loans

Do your homework and you can find good value bad credit finance deals. Low cash prices and low-rate APR are key to low HP monthly payments

John Evans
Dec 10, 2020

Having a poor credit rating can seem like the end of your car buying dreams. However, thanks to BuyaCar’s vast range of affordable cars from around £4,000 upwards and access to low-interest finance to suit most credit ratings - including those with lower scores - this needn’t be the case. That's especially true if you opt for Hire Purchase finance - where you automatically own the car once you've made the last monthly payment.

To prove it, we've found a range of cars available for less than £150 per month for someone with a poor credit rating, putting down no deposit on a 48-month Hire Purchase contract. These eight cars vary from tiny city cars to practical family hatchbacks, worth around £5,000 upwards. You could be surprised by what you could get for your money. And if none of these take your fancy, there are plenty of similarly priced alternatives available that might.

When drivers have a lower credit score, Hire Purchase is often the only finance option available. That's because you pay off the balance quicker, reducing the risk for the finance company and meaning that they're more likely to approve you. Another benefit is that you also end up paying less interest overall for the same reason.

Yes, you pay more per month than you would using PCP finance but on the other hand, you pay less interest over the contract term and there’s no large optional final payment needed because the monthly payments cover the whole value of the car. So, at the end of the contract you own the car already and it’s your choice then whether you keep the car or part-exchange it for a newer model.

Even better, by meeting your monthly payments with a bad credit car loan you’ll help to improve your credit score, meaning that next time around you may be able to take advantage of fair credit car finance. Keep proving your ability to pay off loans and you’ll be eligible for better deals with lower interest charges as time goes on. Other steps you can take to improve your credit rating include:

Reviewing and tidying up your finances including closing any dormant accounts.
Checking your credit record for errors with the major credit agencies (Experian, Equifax and TransUnion).

Check out our eight poor credit car finance heroes

All offers featured below are typical Hire Purchase deals calculated for those with a poor credit score, taking out a 48-month contract with no deposit. 

1. Vauxhall Corsa

Our pick 2013 Vauxhall Corsa 1.2 Exclusiv 5dr AC, 40,000 miles
Cash price £4,450
Monthly payments £128
APR 18.9%

Thousands of driving schools can’t be wrong: the Corsa is an attractive, tough, safe and easy-to-drive small car. Its main rival, the Ford Fiesta, attracts more attention from car buyers - it has long been the UK's best-selling car - but the Corsa is often better value for money as a second-hand purchase.

Exclusiv is a popular trim throughout the Vauxhall range. It has all the essentials including a height adjustable driver’s seat and fully adjustable steering wheel so you can get the driving position just right, plus three rear diagonal seatbelts so it's safe even if you squeeze three passengers into the rear seats.

Slivers of chrome and body coloured bumpers and door handles bring a degree of luxury while electric windows and mirrors boost convenience.


2. Hyundai i10

Our pick 2014 Hyundai i10 1.0 SE 5dr, 50,000 miles
Cash price £4,690
Monthly payments £135
APR 18.9%

City car it may be but the i10 is also a great little all-rounder with a eager enough engine that makes it feel reasonably nippy, light controls and good composure over poor road surfaces. Together these make it an able companion for longer journeys - a rare thing for a car so small and easy to drive.

Interior quality is good and when new - like all Hyundais - the i10 was sold with a long, five-year warranty that speaks volumes about the model’s long-term reliability. Find yourself a four-year old model, therefore, and you'll benefit from a year's warranty - enough time to spot any rare issues and get them rectified - great for used car peace of mind.

There may be a newer version out now but this generation of i10 still looks pretty. And better still, it's much more affordable than the model that replaced it.


3. Fiat 500

Our pick 2015 Fiat 500 0.9 TwinAir S, 57,000 miles
Cash price £4,796
Monthly payments £138
APR 18.9%

No small car is as cute and trendy as the Fiat 500. Especially appealing is the way the exterior colour is continued inside on the dashboard. You can get two-tone cars, too, and if you like having the wind in your hair, there’s also a convertible with a fabric middle roof section that folds all the way back - enough to give you the cabriolet feeling which still keeping you feeling safe.

Most Fiat 500s come with a run-of-the-mill 1.2 petrol engine but our example is fitted with the bassy-sounding turbocharged 0.9-litre two-cylinder engine. Yes, the engine may be small, but it’s a raspy little thing that harks back to the original Fiat 500 with it's deep, throbbing soundtrack, which enhances the 500’s cheeky character.


4. Volkswagen Up

Our pick 2013 VW Up 1.0 Move Up 5dr, 46,000 miles
Cash price £4,999
Monthly payments £144
APR 18.9%

VW may be known for making larger and more upmarket cars, but while the VW Up is a chic and trendy city car, it still channels the same upmarket feeling, inside and out. It offers all the maturity and deeply ingrained quality you expect of a VW, only scaled down to suit the car’s size and price.

It’s compact but you’ll be surprised by how roomy it is in the back and how much you can squeeze into the boot. There are three-door versions but our example is the more practical five-door. When a car is this small, every additional convenience takes on a new importance.


5. Vauxhall Astra

Vauxhall Astra front three quarters view

Our pick 2014 Vauxhall Astra 1.6 16v Design 5dr, 65,000 miles
Cash price £5,000
Monthly payments £144
APR 18.9%

No, it’s not a mistake; you really can get a smart family hatchback in the shape of this Astra for around £150 per month with bad credit. Being built in Britain it’s perfectly set up for UK roads thanks to its combination of a supple ride, sharp steering and safe handling. A Ford Focus is a little more sporty feeling but the Astra is a solid, comfortable and predictable performer.

It’s also very practical and in our featured Design trim, well equipped with features including air-conditioning and electric windows included. The 1.6-litre engine isn’t the most punchy but it is tough and refined, so not a bad choice in a sensible and affordable family car.


6. Peugeot 108

Our pick 2015 Peugeot 108 1.0 Active 3dr, 23,000 miles
Cash price £5,090
Monthly payments £146
APR 18.9%

The Hyundai i10 and VW Up may be more accomplished all-rounders but the chic 108 still tempts with its strong and lively engine, easy driving manners and, on some models, folding roof.

It’s also spectacular value for money as this ultra-low-mileage, 2015-reg example illustrates. This means that the car should look and feel pretty new, making you feel like you're getting a bargain.

The three-cylinder engine thrives on being worked hard and produces a sporty thrum and although it’s essentially a city car, out on the open road it is reasonably nippy and able to put a smile on your face. The interior is functional but hard-wearing. If your budget will stretch to it, look out for higher-spec trims with a big touchscreen media system.


7. Suzuki Swift

Our pick 2015 Suzuki Swift 1.2 SZ3 5dr, 64,000 miles
Cash price £5,190
Monthly payments £149
APR 18.9%

The Swift often gets overlooked in the supermini shopping stakes but now’s your chance to correct that wrong with our example. Its high roof boosts interior space and occupant access but the well-judged suspension means this tall car remains sharp and fun-to-drive around corners.

Add direct steering, an eager but efficient engine matched with an excellent gearbox and you have a car that’s surprisingly fun to drive. The downside is that some of the interior plastics look a little on the cheap side and the car has a tendency to be a little noisy on the motorway.

SZ3 trim brings 60:40-split-folding rear seats and refinements including air-conditioning, a fully adjustable driver’s seat and steering wheel, and electric rear, as well as front, windows.


8. Dacia Sandero

Our pick 2014 Dacia Sandero 0.9 TCe Laureate 5dr, 26,000 miles
Cash price £5,195
Monthly payments £149
APR 18.9%

The humble Sandero is a car you buy with your head rather than your heart, which is why it makes such a great used buy. It was great value new but used, it’s even more so, especially one like our example: a top-spec Laureate model with just 26,000 miles on the clock.

Interior space aplenty, air-conditioned comfort, split-folding rear seat practicality and electric windows all-round – these and many more useful features come as standard. Granted, in terms of interior plastics and the ride and handling, you can see and feel where money has been saved - as this is a safe rather than a particularly cushy or fun-to-drive car - but as reliable, practical and comfortable day-to-day transport, the Sandero spermini is hard to beat.

The 0.9-litre petrol engine may be small, but thanks to a turbocharger it makes the Sandero surprisingly nippy. 


*Representative PCP finance - Ford Fiesta:

48 monthly payments of £192
Deposit: £0
Mileage limit: 8,000 per year
Optional final payment to buy car: £2,923
Total amount payable to buy car: £11,926
Total cost of credit: £2,426
Amount borrowed: £9,500
APR: 9.9%

Buyacar is a credit broker, not a lender. Our rates start from 6.9% APR. The rate you are offered will depend on your individual circumstances.


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