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Can anyone give me a reason as to why my dealer will not allow me to apply for finance if I am only a provisional Licence holder? Surely If my credit rating is good there should be no problem with this.
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I am responsible for policy decisions at a motor finance company. We don't accept provisional licence holders - only a full GB or EU licence will do.
Your 'credit rating' has nothing to do with it - the finance company like to have the peace of mind that the vehicle that they have an interest in is being used by someone who knows (and has proved it to the DSA) what they are doing!
I think a couple of finance companies at the lower end of the market take provisional licence holders - British Credit Trust for example. Ask your dealer to propose to them, or to a broker if they use one.
DB
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Or just get a bank loan, shop around and don't get hammered on the rate. How you spend the money is then your business, as long as you don't mislead the bank in making the application.
Try www.moneysupermarket.com/loans
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Would be an edit:
I wonder if also it might be based on the fact not so much of the driver's competence (a requirement for fully comprehensive insurance could mitigate that risk) so much as the fear that the car will either be used by or transferred to someone who does have a licence who is not as creditworthy as the applicant, or even that the car could be sold on fraudulently as the provisional licence holder may not have any use for it.
Obviously a full licence holder could do either of these things but the likelihood of provisional licence holders (as a group) doing so must be higher.
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i like dieselboys answer
the finance house have a hold on the goods
the outstanding is worth more than the car worth
they dont want chummy writing it off tommorrow and then they have a long battle to get recompense
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DavidHM makes a well educated guess...
What happens if you fail your test? You will i) stop paying = loss to finance company, ii) hand the vehicle back = loss to the finance company, iii) flog it to someone else without settling = fraud and a heap of bother for the finance company.
As David says, why not get a bank loan? They won't ask about the licence as it will be unsecured...
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Thankyou all for the replies, I will go for the unsecured loan as I can get a rate of 6.1% from monebackbank.co.uk.
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Dealer will be offering an Hire Purchase agreement (although they might not say this) and therefore the risk of the vehicle being damaged by an inexperienced driver means they will not offer you a loan. Remember until 50% of the HP amount repayed it is still their vehicle. They'd also ask for proof of insurance.
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"Remember until 50% of the HP amount repayed it is still their vehicle. They'd also ask for proof of insurance"
Not quite right. Until 100% of the total amount repayable is paid the vehicle still belongs to the finance company. Not all finance companies require proof of insurance....
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