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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 is a guarantor on a car loan?

Guarantor car loans are often a good option for those who may not be offered other types of car finance. They are most commonly used in the case of younger drivers, who can struggle to obtain finance due to having very little or no credit history.

What is a guarantor on a car loan? In a nutshell, the guarantor exists to guarantee the loan company that the payments will be made. In theory, the guarantor is likely to do nothing but sign the agreement as long as this happens. If the borrower stops being able to pay, however, the guarantor is liable to make the payments in their place.

How do you get a guarantor loan?

The applicant

To obtain a guarantor loan - or another kind of car finance - the applicant must be at least 18 years of age. They will need to demonstrate that they have a regular income, so the company can be confident that they make the repayments. The applicant must also have a UK bank account, and they are more likely to be accepted if they are listed on the electoral roll.

The guarantor

The guarantor will usually be a family member or close friend of the applicant, because they are placing their trust in them. If the applicant does not make payments, the guarantor becomes liable for this. Unpaid debt will also affect the credit scores of both the applicant and the guarantor.

To be accepted as a guarantor, the individual will also need a UK bank account, as well as a good credit history. Owning a home is a condition of some lenders. Even where this is not necessary, you are more likely to be able to borrow a larger sum, and/or obtain a good rate of interest if the guarantor is a homeowner.

The pros


Quite simply, a guarantor can make all the difference regarding whether a young person can buy a car or not. Because this lowers the risk of borrowing, lenders are often prepared to offer lower interest rates than they would if they the risk was greater. In turn, this can help the applicant to afford a car. This can particularly benefit those who need a reliable car, for example to get to and from work.

Credit rating

If an applicant takes out a guarantor loan and manages to make their payments in full and on time, this is very likely to make it easier for them to obtain car and other types of finance in the future. This is because paying off the loan helps them to build up a good credit rating.

The cons

Credit score

The credit score can also be a con of guarantor loans, because if the borrower defaults on payment, this can damage the credit scores of both the applicant and the guarantor. This means both parties could encounter difficulties with future borrowing.

The home

If neither party pays the guarantor loan, the lender can take them to court to get what they are owed. Many lenders insist that a guarantor is a homeowner, because ultimately they can claim in court against any assets - which include the home. With such high stakes, it’s wise for both parties to consider their options very carefully before taking out a guarantor loan.

Further information

Guarantor loans are certainly worth considering if you are struggling to get accepted for finance agreements by yourself. However, as with any type of financial agreement, it’s important that you understand exactly what they involve before you apply. If you would like further information on this topic, don’t hesitate to get in touch.

Other related FAQs

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

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.

The maximum age of used cars eligible for finance agreements tends to be 10 years, although there are exceptions to this.

Car finance is a loan – but it’s one that’s often secured against the vehicle you’ve decided you want. As such, it’s often viewed a little differently to a personal loan – which is not secured against anything.

Car loans for used cars vary in length. Terms are typically between 12 and 60 months.

The simplest way to find out how much is left on your car finance agreement is to contact your lender. Alternatively, you can calculate this figure yourself.

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.

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.

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 loans can be secured or unsecured, depending on the type of agreement you get.

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.