1. A poor credit rating
In today's modern world it is almost impossible to buy large items such as large appliances without some form of credit, very few people have the luxury of being able to buy cash. The same goes for cars, it’s a purchase that requires financing of some sort and if your credit record isn’t on the spot, you may have issues getting your dream wheels.
Car financing houses receive thousands of applications a day from consumers wanting to buy vehicles; many of these applications are denied due to a bad credit rating.
Companies like Transunion keep comprehensive credit history on consumers and if their credit score is too low their application is denied immediately. Unpaid debts, slow payment of a debt, account default and an unhealthy bank balance all contribute to the credit score.
Related: What credit score is needed for car finance in SA?
2. No score is also a bad score
Another factor is no credit history at all, this is the catch-22 of credit history, you can’t make debt until you get into debt. If you have no credit history it’s almost as bad as having a poor history and in most cases, you will have to submit supporting documents that show you are not a risk.
At the end of the day, the financing company needs to assess its risk in lending you money to buy your car. If you are too great a risk, due to bad credit history, they will be less likely to lend to you.
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