What is a subprime car loan?

There’s no single, official credit score cut-off that defines someone as subprime, because not all UK lenders and credit agencies use the same scoring system. Each credit reference agency uses its own scale, and lenders then apply their own internal criteria on top of that.

We use Experian, one of the UK's top credit reference agencies, to run our credit checks. This helps us to understand your credit history, which is one of several factors we take into consideration when making a decision on your approval for vehicle finance.

Subprime lenders are finance providers that specialise in helping people who may struggle to get approved by high-street banks or mainstream lenders due to their credit history. Rather than focusing purely on credit scores, they assess applications based on the bigger picture.

These lenders are set up to work with customers who may have experienced issues such as missed payments, defaults, CCJs, or a limited credit history. Because this type of lending carries more risk, subprime lenders typically charge higher interest rates than prime lenders. However, they also offer greater flexibility, manual underwriting, and tailored terms, which can make car finance more accessible. 

Jonathan. Head of Sales and Marketing, explains:

“The main difference between prime and subprime car loans comes down to how lenders assess risk. Prime car loans are typically aimed at customers with a strong credit history, stable finances, and a track record of meeting previous commitments, which means they’re often offered lower interest rates and more flexible terms.

“Subprime car loans, on the other hand, are designed for people whose credit history may not be perfect. Instead of relying on a credit score alone, subprime lenders look more closely at affordability, income, and current circumstances to make a fair lending decision. While interest rates are usually higher to reflect the increased risk, subprime finance plays an important role in helping customers get back on the road. They can also help people to get back on track financially through manageable, well-structured repayments.”

We’re authorised and regulated by the Financial Conduct Authority (FCA).

We're committed to treating customers fairly and giving clear, honest information so you can trust us to put your best interests first every step of the way!

Taking out a subprime car loan doesn’t automatically harm your credit score. In fact, it can help improve it if the finance is managed responsibly.

Most subprime car finance applications start with a soft credit check, which allows lenders to assess your eligibility without leaving a visible footprint on your credit file. This means you can explore your options without affecting your score. A hard credit check is usually only carried out if you choose to proceed with a full application, which can (but not always) cause a small, temporary dip - something that’s standard across all types of credit, not just subprime finance.

Once the loan is in place, your repayment behaviour becomes the most important factor. Making your monthly payments on time and in full can have a positive impact on your credit profile over time, regardless of whether the loan is classed as prime or subprime. However, missed or late payments can negatively affect your score, so it’s essential to ensure the repayments are affordable and sustainable before committing.

We're SAF Approved by the Finance & Leasing Association (FLA), which means that all of our customer-facing employees have passed the Specialist Automotive Finance (SAF) Expert test. This ensures our team members have all the relevant knowledge to advise you on available finance products and help find the right one for you!

Improving your credit score takes time, but small, consistent actions can make a real difference. The key is to show lenders that you can manage credit responsibly and reliably.

• Check your credit report regularly to make sure all the information is accurate and up to date. Errors such as incorrect addresses, accounts that aren’t yours, or wrongly recorded missed payments can all affect your score.
• Pay all bills and credit commitments on time, as payment history is one of the biggest factors in your credit profile. Even one late payment can have an impact.
• Keep credit balances low where possible. Using a large percentage of your available credit can signal financial strain, even if you’re making payments.
• Avoid making multiple credit applications in a short space of time, as this can make you appear higher risk to lenders.
• Stay registered on the electoral roll at your current address, which helps lenders verify your identity and stability.
• Build positive credit gradually, for example by managing a mobile phone contract or a small, affordable credit agreement responsibly.

If you’re using car finance or another form of credit, making every repayment on time can be particularly effective in strengthening your credit profile over the longer term.

Yes, it is possible to get subprime car finance, that’s where we come in.

A good place to start is by using our car finance calculator, which can give you a clear indication of what your finance could look like. It allows you to explore estimated monthly payments based on different vehicle prices and terms, helping you understand what may be affordable before you apply. You can then check your eligibility by getting a quote, so you can explore your options without impacting your credit score.