Phone lines open today until 7pm
01254 956777
How It Works Apply Now

Being a guarantor for a car loan application: Is it a good idea?

By becoming a guarantor for a friend or family member, you’ll be helping them get behind the wheel with a car loan. But acting as a guarantor for someone comes with responsibilities and even an element of risk, which you need to understand fully before you agree to it.

If you’re thinking of becoming a guarantor, this information could be for you.

What is a guarantor and what does being a guarantor mean?

Being a guarantor is a way to help someone secure credit when they have financial circumstances that discourage lenders.

A guarantor car loan works in the same way most other car finance does. The application process involves both the borrower and the guarantor to ensure that they satisfy the lender’s criteria.

A deposit is still required, too – where applicable – as well as several fixed repayments over an agreed amount of time. The difference with a guarantor car loan is that a third party (the guarantor) is there to ensure all the payments are met. So, as a guarantor, you are ‘guaranteeing’ the loan by promising to cover the payments if the borrower ever cannot.

If the borrower fails to make a payment for whatever reason, it’s up to the guarantor to take responsibility for it and pay it on their behalf.

Read: What is a guarantor and can I use one to finance a car?

Who can be a guarantor?

Almost anyone can be a guarantor for a car loan, but different lenders may have different eligibility criteria. In general, you need to be over 21 (although there are lenders that will accept someone over 18). A guarantor also needs to have a good credit score and a good credit history of making regular repayments.

A couple

Often the lender will ask that the guarantor is a homeowner, but they may accept non-homeowners as long as they have a fixed address and have lived there for several years.

Most guarantors are either a family member or a close friend of the borrower. You should only ever be a guarantor for someone who you trust and who you would be willing to cover payments for if you ever needed to.

Lastly, you cannot be a guarantor to someone you’re financially linked with (so if you wanted to be a guarantor for a spouse or partner, for instance, you could only do so if you had separate finances).

car finance eligibility checker

Why would someone need me to be a guarantor for a car loan?

Someone may need you to be a guarantor for a car loan if they’re struggling to get approved from a lender or if they can’t access an affordable interest rate by applying on their own.

Family together on laptop

This could be for a variety of reasons, but the main reasons include:

Their age: Young drivers often haven’t had time to build up enough credit history to satisfy lenders’ criteria. A guarantor who has a more established credit record can help.

Their credit rating: If someone has a low credit score, they’ll usually struggle with getting accepted for a car loan. A guarantor with good credit minimises that risk for the lender.

Read: How to qualify for a car loan when you have bad credit

They’re self-employed or have an irregular income: Lenders, on the whole, like stability; and income can play a large part in whether someone is accepted for a loan or not. A guarantor acts as a safety net if the borrower’s income cannot stretch to make payments.

If you’re considering or have been asked to act as a guarantor, it’s important to have an open conversation as to why they need you to be their guarantor so your decision can factor in their reasons.

Couple at showroom collecting the car

If they’re asking you to be a guarantor because of bad credit, do you feel confident that they can manage their finances now? If it’s due to income, do they have savings or a backup plan should they fall short one month? Having a candid conversation before you agree to become a guarantor can prevent any misunderstandings later down the line.

How much does it cost to be a guarantor?

Being a guarantor on a car loan shouldn’t cost you anything unless the borrower misses or stops making repayments. If this happens, then you’ll be liable for making those payments along with any subsequent fees. So it’s a good idea to ask yourself before you agree to be a guarantor if you can afford to pay back the loan if they can’t or won’t.

Will I be a guarantor for the duration of the car loan?

Typically, car loans run for a relatively short period of time – two to five years. Once you’ve signed up to be a guarantor, you usually have a 14-day cooling-off period to back out if you want. Otherwise, you remain a guarantor for either the duration of the term or until all the repayments plus interest have been made.

Can I stop being a guarantor at any point of the loan?

As the loan has been approved based on your details – your credit history, employment status, homeownership – you can’t be easily removed from the agreement. The only way to stop being a guarantor would be to repay the loan off in full early plus any charges and interest.

What does a guarantor need to provide for a car loan?

A guarantor usually needs to provide the same information as the borrower. This will include proof of ID, such as a passport or driving licence, proof of address (usually utility bills and bank statements, as long as they’re dated within the three months before application are accepted) and bank details.

Lady smiling in car

Depending on the lender, you may be asked for proof of income or further supporting documents.

What checks will lenders do before a guarantor car loan?

When you apply for guarantor car finance, the lender will run a series of checks on both the borrower and the guarantor. These will mainly be examining your credit history, your credit score and your current finances to assess whether you’ll be able to repay the loan as well as the affordability of the loan.

Read: What credit checks are done for car finance?

If you want to find out more about becoming a car loan guarantor or are ready to apply, contact our team on 01254 956777 or Apply Now.

car loan eligibility checker

Representative Example of Credit

We expect more than 51% of our customers to achieve this rate.

Loan Amount Total Cost of Credit Representative APR 60 Monthly Payments Deposit Amount Loan Term Total Amount Payable
£7,500 £3831 19.1% APR £188.85 £0 60 Months £11,331

All offers are subject to change at any time, you must be 18 or over and finance is subject to status, vehicle availability and terms and conditions apply. We can introduce you to a limited number of finance companies, a commission may be received. Failure to maintain payments may result in termination of your agreement and the vehicle being returned, this could affect your credit rating and make it more difficult to obtain credit in the future. All prices correct at time of publication.

We purchase a wide variety of vehicles from all over the country to ensure the best quality and value for our customers, all of our cars go through a thorough inspection process and if they do not meet our standards we do not sell them. We endeavour to inform our customers (where possible) the provenance of the vehicle they are buying and as such we will always inform you if the vehicle has previously been either an ex fleet or hire car. Should your vehicle be an ex hire/fleet car please do not be concerned as we would never value this vehicle differently when you come to part exchange it and there is no difference to the CAP valuation either.

You should try and estimate the distance you will travel as accurately as possible to try and avoid excess mileage charges at the end of your contract.

All pictures and/or photos and car descriptions on this site are for illustration and reference purposes only and are not necessarily the vehicle on offer. All offers are subject to change at any time and are subject to finance approval and vehicle availability. All prices correct at time of publication. E & OE.

Hippo Vehicle Solutions t/a Hippo Motor Finance is authorised and regulated by the Financial Conduct Authority. FRN 658076. We are a Credit Broker not a Lender and can introduce you to a limited number of lenders. Subject to status and to UK residents only (excl. the Channel Islands). Individuals must be 18 or over. Guarantees and indemnities may be required. We typically receive a fixed commission calculated by reference to the vehicle model, product or amount you borrow, for introducing you to a lender but this does not affect the interest charged on the agreement, all of which are set by the lender. Images for illustrative purposes only. Hippo Vehicle Solutions t/a Hippo Motor Finance is an Appointed Representative of AutoProtect (MBI) Limited for insurance distribution purposes. AutoProtect (MBI) Limited is authorised and regulated by the Financial Conduct Authority. Its firm reference number is 312143. You can check this at

We endeavour to ensure that all information including the specifications and finance availability are accurate. Whilst we make every effort to display correct information we are aware that errors may occur occasionally. We are not able, therefore, to guarantee the accuracy of all information especially when given to us by third parties. If you do require clarification of some information you have seen on our website, please email us at . This does not affect your statutory rights.

We are a broker not a lender and our registered office is Unit 26 Trident Park, Trident Way, Blackburn, BB13NU.