What documents do I need for a car finance application?
Car finance doesn’t have to be stressful! It’s a great way to spread the cost and get the car you really want, but what documents do you need to apply? Refused Car Finance have put together their top tips on what you need when applying and the documents you will need to provide. Also, remember that different documents are required by different lenders, but we’ve listed the most common ones.
The main thing you need to prove when applying for any sort of loan is who you are. This will be done on your initial application. You will be asked questions such as full name, date of birth, marital status, residential status and address history for the last 3 years.
You can apply for car finance no matter what type of licence you have. When you apply you will be asked what type of licence you currently hold. It is easier to get car finance with a full UK licence but some lenders do accept provisional and European driving licenses too. You will most likely be asked to send an image of your license after you have applied. Some lenders even ask for a selfie of you with your license to make sure you are the person shown on the licence and also verify which type of licence you have. Don’t worry though, not many lenders ask for this!
Employment and income details
This step is really important as lenders will want to know whether you can actually afford your repayments. Most lenders will require information on your employment details for at least the past 3 years, whether that is full time, part time, self-employed, unemployed, career or in receipt of benefits. If you work full time or part time, they will ask for bank statements or payslips to prove your income. If you can’t provide this information, there is also other ways to prove income such as tax return information. But this will be discussed at the application stage. If you receive benefits, you will more than likely be asked to provide a breakdown of the benefits you receive.
Proof of address
Like your employment details, you will also need to provide 3 years’ worth of address history. Lenders favour people who don’t move around much as they are seen as more ‘stable’ and it also helps when it comes to fraud and traceability. You can prove your address history by submitting a bank statement, credit card statement, council tax bill or utility bill. You can blank out any financial information, just make sure your address is shown clearly.
Proof of signature
You may need to provide a proof of your signature with some lenders. You can easily do this by sending a picture of the back of a bank card or something similar. But remember to blank out your 3-digit security card on the back of any credit or debit cards to avoid theft.
Your credit score plays a massive part in your car finance application. Although it’s not a formal document to provide, it’s good to be aware of. Where you place on the credit scale can affect your chances of being approved. When applying for car finance with bad credit, you should try improving your credit score before you apply! Getting yourself on the electoral roll is a great way to improve your score and help your car finance application as it verifies your address history!
Each lender is different and they will ask for certain documents that they require as standard. It may seem a lot of documents to provide but lenders need to see that you are who you say you are and that you can afford the repayments. Providing these documents also avoids fraud and identity theft. Still unsure? Find out more about what car finance documents you need when applying!