Car finance for agency workers and zero-hours contracts

You may still qualify for car finance if you're an agency worker or on a zero-hours contract. Find out how to maximise your chances.



Working for an agency or having a zero-hours contract can mean you don't work the same hours every week. That can make things a little tricky when applying for car finance from certain lenders.

However, getting car finance isn't impossible. 

Many people whose work patterns don't fit the traditional nine-to-five manage to get approved for car finance. However, they often need to provide more evidence than people working "regular" jobs.

That's because lenders need to feel confident you'll be able to afford the finance plan. The important thing is being able to show:

• You consistently earn enough every month to afford your payments.
• You have a good credit history.
  
  

In this guide, we show you how UK lenders assess irregular income, the paperwork you need and helpful tips on getting approved for car finance.

Who will find this guide useful?

You might find this guide useful if you're considering applying for car finance and you

• work for an agency, or
• get paid hourly and don't always have the same hours every week.
  
  

That covers lots of types of jobs, including many delivery drivers, care workers, hospitality staff, event contractors and retail staff.

You may also find it handy if you have a regular job and a second zero-hours job or agency role.

How lenders assess irregular income

In the UK, car finance lenders are governed by the Financial Conduct Authority (FCA), which requires them to do affordability checks on all applicants.

These lenders tend to require more evidence from agency and zero-hours workers.

Example one: a PAYE salaried worker

Leela is a PAYE salaried worker who works in finance.

If she applied for car finance, she'd usually have to provide three months of payslips and a P60.

Her monthly income would be taken at face value. If she earned £5,000 a month, it would be assumed this is the case every month.

Example two: an agency/zero-hours worker

Caleb works in festivals and events through an agency.

For a car finance application, he'd typically have to supply:

• Three to six months of payslips, bank statements or Open Banking access
• Potentially his P60 and tax figures from the year before
  
  

He's worked through the same agency for over a year. That puts him in a much better position in the eyes of lenders.

In fact, most mainstream UK car finance lenders want proof you've worked on the same contract or for the same company for at least one year.

The lender would then take his average monthly income and subtract his regular outgoings, such as mortgage or rent, credit card bills, insurance and childcare.

The number left is his disposable income. To approve Caleb for car finance, the lender must feel confident he can afford his monthly payments using this disposable income.



What paperwork to prepare

Your car finance lender will ask for documents to help prove what you can afford and that your income is stable enough for approval.

The exact documents you'll need may vary. However, it's a good idea to get these ready:

• A consecutive run of three to six months of payslips. For instance, if it's July and you haven't been paid yet, you should try to provide payslips from January to June.
  
  
• The bank statements to match. These show your lender the exact net pay from your payslips is being paid into your account.
  
  
• Open Banking access may be asked for instead of bank statements. If so, you'll need the relevant online banking login details ready to log in and authorise the connection. You won't need to show your login details to your lender at any point.

• Your most recent P60, if you have one, to show you've been with your employer or agency for more than 12 months.
  
  
• Proof of identity, such as a passport or valid UK photocard driving licence. 
  
  
• Proof of address, which can also be your driving licence or bank statement.
  
  

It's also useful (but not essential) to ask for a letter from your agency or zero-hours contract provider.  This should show your hourly rate, how long you've been on their books and that they're keeping you on for ongoing work.

Six tips for a successful application

Car finance approval is never guaranteed – and it's always a little more difficult if you're an agency or zero-hours worker.

However, you can maximise your chances of success by following these six tips.

1. Have a deposit ready

The bigger your deposit, the better. From the lender's perspective, it makes you a less risky borrower.

2. Consider adding a guarantor

A guarantor is a named person who takes responsibility for payments if you can't pay (usually a family member). That's a big decision for you and your guarantor, and not one you should make lightly.

However, it can increase your chances of approval if your credit history isn't so great.

3. Keep your bank statements squeaky clean

Avoid risky bank statement activity for at least three months before applying. That includes things like returned direct debits, gambling deposits or going into an unarranged overdraft.

4. Show them you have a safety buffer

Try to leave some money in your account at the end of the month  to show you're not burning through your paycheck.

5. Give your credit report a once-over

Check that everything on your credit report is correct before applying for car finance. Mistakes or outdated information, such as an incorrect address, could delay your application or make it harder for lenders to verify your details. In some cases, they could even affect your chances of approval.

6. Use soft credit checkers, not hard searches

Protect your credit score  by using soft-search credit checkers before your formal application. Unlike hard searches, these won't affect your credit score.

How Zoomo can help

At Zoomo, we want to make car finance fair and accessible for as many people as possible. That's why we work with specialist lenders who take a slightly different approach to your typical high-street lender.

The lenders we work with take a holistic view of your finances. They consider what you can really afford – not just your credit score or the fact you don't work a traditional nine-to-five.

So, if you're looking for car finance in Newcastle and you're on a zero-hours or agency contract, why not apply online today? It only takes a few minutes, and it won't affect your credit score at this stage.