Is Proof of Income Required for Car Finance?
Almost all mainstream lenders in the UK require some form of income verification when assessing a car finance application. This typically includes recent payslips, bank statements, linking to open banking or tax returns, especially if you're self-employed.
However, not all lenders operate the same way. Specialist finance companies may offer solutions that don’t require strict income documentation, provided other aspects of your financial profile are strong.
Why Lenders Ask for Income Documentation
Lenders need to assess your ability to repay the loan reliably. Verified income documentation helps them calculate your affordability and avoid lending irresponsibly. It’s also part of their regulatory obligation under the Financial Conduct Authority (FCA) to prevent customers from falling into unaffordable debt.
Some might ask, well why can’t I just show proof of income ‘my way’, why must I show it in the way the lender asks? 91% of lettings fraud is from fake or modified bank statements. 50% of all motor finance fraud in the UK stems from fake or modified bank statements. Not using FCA regulated forms of accepting proof of income would be like throwing those incredibly worrying statistics in the bin.
Without regulated proof of income, lenders have limited visibility into your financial stability, which naturally increases their risk, often leading to either higher interest rates, stricter terms, or a rejection.
Can You Get Approved Without Payslips or Bank Statements?
If you’re employed but don’t have payslips, say you’re paid in cash or recently changed jobs, or you for whatever reason don’t have the ability to easily provide bank statements there are still ways to secure finance:
- Some lenders accept proof of employment (e.g. a contract or letter from your employer) but they would likely also ask your employer to act as a guarantor. To read more about how this is possible, you can read our blog on how guarantor agreements work for car finance in the UK.
Ayan unfortunately does not allow guarantor agreements currently. - A strong credit score and deposit can offset missing income proof. Maybe not entirely, but it also depends on the deposit amount as a proportion of the finance amount (50%+ is ridiculously strong), and just how great your credit history is (a Transunion score of 700+ definitely wouldn’t hurt).
- Connect to open banking. Lenders, like Ayan, might have an open banking option (in fact to reduce chances of fraud, with Ayan, it is mandatory at some point to link to open banking). This makes it close to impossible for someone to tamper with their income information. All open banking platforms must be regulated by the FCA, meaning rest-assured no funny business is going on. Lenders like Ayan gain read-only access for an agreed period, meaning, of course, all they can do is view your banking information - they cannot do anything else.
However, these options are more limited, and you may need to work with a specialist broker or a provider that offers bad credit or alternative finance products.
Alternative Documents That Can Support Your Application
Even if you don't have payslips or a traditional employment record, some lenders may allow you to submit some of the following to support your application:
- P60 or SA302 tax returns (for self-employed applicants)
- Universal Credit or benefit award letters
- Rental income contracts or statements
- Proof of savings or investment income
- Guarantor details, if another party is willing to co-sign the agreement
The key is showing some form of regular and sustainable income, even if it’s non-traditional. But again, it is very rare they accept these, and even if they do, you are likely to get a very high rate, provide a large deposit, and maybe even provide a guarantor.
Ayan does not accept any of these alternative documents currently.
No-Income and Low-Income Car Finance: Is It Possible?
While rare, some lenders may offer no-income car finance in specific circumstances, usually with:
- A large upfront deposit
- A guarantor
- A very low loan amount
This may be applicable if you’ve recently lost your job but have other financial assets, or if you’re temporarily out of work and expect income to resume soon.
That said, no-income finance is risky for both borrower and lender, and you should only consider it if you’re confident in your ability to resume payments quickly.
Does It Affect the Type of Car Finance You Can Get?
Yes. Your income documentation can affect whether you’re eligible for:
- Hire Purchase (HP): Often more accessible with minimal documentation, especially for used cars.
- Personal Contract Purchase (PCP): May require higher credit scores and income proof due to the residual value risk.
- Guarantor Finance: Available for people with little to no income proof, provided someone else can guarantee the loan.
Conclusion
So, can you get car finance without proof of income in the UK? Yes, but it will be quite tricky. While most lenders do require some form of documentation, there are exceptions, especially with specialist or alternative finance providers who work with self-employed, gig economy, or low-income drivers.
If you're in this position, the best route is to work with a finance provider who understands your situation and offers flexible, Shariah-compliant, and PCO-friendly options, like we do at Ayan Capital, with an open banking option. That way, all you need to do is click a couple buttons for us to securely verify your income for you.
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