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Published 24 June 2021

Can I get car finance with a CCJ?

If you have a CCJ, car finance will be harder to find. However, lenders will look at your overall affordability, not just your credit score, and there are specialist options that could help you get finance to buy a car.

If you have a CCJ, or county court judgment, it will be harder to find car finance but it isn’t impossible.

Lenders are likely to charge you more than someone without a CCJ, or you may have to approach a specialist lender instead of a mainstream one.

Before you begin looking at car finance options, it’s important to understand how much a new car finance contract will cost you, and how your CCJ will affect it.

Here we look at everything you need to know about getting car finance with a CCJ including how a CCJ works, what it means for your credit score, how long it’ll stay with you, and how to improve your chances of getting car finance.

What is a CCJ?

A county court judgment (CCJ) is a court order which can be issued if you owe money to an organisation, such as a credit card company. The CCJ is a court order and tells you to pay the money owed.

It is just one of a number of actions that can be carried out if you’re late making debt repayments, or you’ve stopped paying them altogether.

If you receive a county court claim form, you need to respond to it within the timeframe given, which is usually around two weeks. If you fail to respond, the court could demand that you pay the money back, at an expensive rate of interest or further enforcement action could be taken.

When the claim arrives, you can pay the full amount owed, ask to pay it back in instalments, dispute the amount owed if you think it’s incorrect, or you could claim against the creditor, if you think it owes you money.

How long does a CCJ stay on your credit history?

A CCJ stays on your credit report for six years, even if you’ve paid it off during this time. After six years it will be removed, even if you haven’t cleared the debt by this point.

Can I get car finance with a CCJ?

It’s not impossible to get car finance with a CCJ but your options will be very limited because a CCJ will negatively affect your credit score. When you apply for car finance, or any kind of credit, the lender you’re applying to will look at your credit history to help them understand how you have managed credit and repayments in the past.

Having a CCJ means creditors won’t give you the best deals on the market, because you are seen as a higher risk of not paying the money back.

However, it’s not the only thing lenders look at. They will also look at your income to see if you can afford the repayments alongside the other financial commitments you need to make, such as mortgage or rent payments and living expenses such as childcare costs.

» MORE: What checks are made when you apply for car finance?

What are my finance options if I have a CCJ?

The cost of car finance with a CCJ is likely to be higher than a standard car finance deal. Examples can be significantly higher than the price you’d be offered on a mainstream car finance agreement. Therefore it’s important to make sure you’re getting the best deal you can, and that you can afford it.

It is very important that you are confident that you will be accepted for credit before you apply. All declined applications will have a further negative effect on your credit score. A majority of lenders do not lend to those with CCJs so you must do your homework before making any applications.

If you’ve been rejected for car finance, or the price you’re offered is too expensive, there are other options to look at including the following:

Guarantor car finance

Guarantor car finance can help people with bad credit scores access finance, but they aren’t something to be entered into lightly as it could put a strain on your relationship amongst other things. The person who guarantees the loan is effectively agreeing to make the repayments if you’re not able to, which reduces some of the risk for the lender and may make them more willing to lend to you.

Pay-as-you-go, or black box, car finance

This type of car finance is specifically designed for those with bad credit scores. A black box is installed in your car, which will remind you when your monthly finance payments are due. If you fail to make the payment, even after reminders, the lender can immobilise the car, stopping you from driving it until you pay, as well as harming your credit score even further.

How can you boost your chances of securing car finance?

If you can improve your credit score you’ll be more likely to get a car finance agreement at a decent rate. There are many ways to boost your credit score, and although this can take time, it can be a huge benefit as it makes a difference every time you apply for credit.

This includes things like, always making sure you make payments on time, joining the electoral roll, and regularly checking your credit score to make sure it’s all up to date and there are no inaccuracies.

If you have a CCJ and a poor credit score, it is worth being realistic about your prospects. You are unlikely to get approved for finance for a brand-new, expensive car, but you would stand a better chance of approval if you wanted to borrow a smaller amount of money for a used car.

Similarly, by putting down a larger initial deposit, you would need to borrow a smaller amount of money. This would present a smaller risk to the lender and so it could help your application.

And finally, ask yourself if it is wise to seek more credit whilst under a CCJ. Work out if there are other options that can be considered first that protect your finances in the future.

About the Author

Rebecca Goodman

Rebecca Goodman is a freelance journalist who has spent the past 10 years working across personal finance publications. Regularly writing for The Guardian, The Sun, The Telegraph, and The Independent.

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