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Zuto is a credit broker, not a lender. Our rates start from 8.9% APR. The rate you are offered will depend on your individual circumstances. Representative Example: Borrowing £9,000 over 60 months with a representative APR of 20.9% the amount payable would be £234 a month, with a total cost of credit of £5,047 and a total amount payable of £14,047.

Zuto Limited. Registered in England under number 05722976. Registered office: Winterton House, Winterton Way, Macclesfield, Cheshire SK11 0LP. Zuto Limited is acting as a broker and not as a lender. Authorised and regulated by the Financial Conduct Authority, registration number 452589. Zuto can introduce you to a limited number of finance providers, based on your credit rating, Zuto won't charge you anything for this service, but do get a fee from the lender which varies based on the product or amount borrowed.

What happens if you lie on a car loan application?

If you’re buying a new or used car, it may be tempting to exaggerate or mislead on your loan application so that you can borrow more money and therefore buy a better car. What happens if you lie on a car loan application, though?

Being dishonest when applying for any kind of finance is not a good idea. This is a form of fraud and is illegal, meaning you could face prosecution if you are caught. You are also  likely to find it more difficult to get any kind of credit in the future, because there may be a marker placed against your file. You might also lose the car.

More generally, if you borrow more than you can afford because you have lied in your application, then you are far more likely to get into arrears, which will also damage your credit rating. 

The effect on your credit score

Lenders will check your credit file before they agree to a loan or other form of car finance. If the lender belongs to CIFAS, a fraud prevention organisation, they can check for any warnings against your name.

This can happen if there has been fraudulent activity, either by you or someone else who has used your details illegally. CIFAS members cannot simply refuse an application because a warning exists; they are obliged instead to make further checks. They may ask for further proof of identity.

If you knowingly lie on a loan application and this is discovered, it will thus make it much more difficult to obtain credit in the future.

Why lying is not a good idea

The reason for lenders requesting your financial information, such as income and outgoings, is so they can check affordability. Obviously, they want you to repay the loan, and want to do their utmost to ensure this happens.

It’s not only in their interests, however. Finance companies are very experienced in calculating how much to lend someone. If you lie on a loan or finance application, this calculation will not be accurate.

This means you might well find you cannot meet the repayments and fall into debt. If you fall into arrears, you are much more likely to be refused future credit. Any future borrowing is also likely to be at less favourable rates of interest.

Secured and unsecured loans

If you lied on the application for a secured car loan and then did not manage to make the repayments, the lender could repossess the car. In this scenario, you would have nothing to show for the payments you had made.

Unsecured loans are not protected by an asset, so the lender could not repossess the vehicle. If a borrower fell behind on payments, the lender may go to court to try and get their money back. If this happened, the fraud may well be uncovered during this process and this could lead to prosecution. It would at least make it much more difficult to borrow money in the future - especially at anything but a very high rate of interest.

A risky business

If you lie on a car loan application, you are taking a number of risks and committing a crime. The biggest risk is prosecution, and possibly even time in prison. It is therefore extremely important that you are honest when making your application. Being accurate in the information you provide is in your interests and that of the lender.

So, take care when completing your application and make sure that all the details you supply are correct. Even if you provide inaccurate information accidentally, you could still be deemed to have committed an offence.

Other related FAQs

Looking for more related content to this? We’ve picked a selection of related topics that you may find helpful

The number of years banks will finance a used car for depends on the particular agreement you enter into. Usually, agreements are available for terms of between 12 and 60 months.

Car finance agreements can be a great option for a wide range of people. Before committing to a deal though, it’s always important to read the terms carefully and consider the pros and cons.

Buying a used car with a finance agreement can be a good option. As with any financial agreement though, it’s always important to check the details carefully and to consider the pros and cons.

Under certain circumstances, you can claim the cost of a car as a capital allowance, meaning you can deduct some of the vehicle’s value from the profits of your business before paying tax. However, strict criteria apply.

In general, you cannot simply transfer a car finance agreement to someone else. However, there may be other options available to you that meet your needs.

In most cases, car finance providers pay for or provide your vehicle after you pay a deposit. Then, over the course of an agreed repayment period, you’ll pay off some or all of the price. The product you choose will decide what happens at the end of the agreement – but common options include taking ownership of the car, handing it back, or upgrading it.

Car finance companies don’t usually contact employers to assess eligibility. However, in some circumstances, they might.

A guarantor car loan is an agreement in which a third party (usually a family member or friend) agrees to guarantee the repayment of your loan if you fail to keep up with your payments.

Don’t worry if you can’t remember who your car finance is with. You can find out by checking your paperwork, looking at who you make your payment to through your bank, or calling the dealership you bought your car from.

When you’re applying for finance for a used car, it’s useful to have the relevant supporting documents such as information on your vehicle of choice, your financial details and proof of address and income. You may also need a deposit.