What documents do I need to get car finance?
Depending on the type of car finance you apply for, the documents you need can vary, but we’re going to detail the most common ones needed. The process entails you giving some personal details first, then once your application is initially accepted, this is when you’ll need to provide certain documents. These typically include:
- A driving licence or passport as proof of identity
You’ll need to include both sides of your driver's license, but depending on the lender they may accept your passport.
If you don’t have your drivers licence, your finance application is likely to be rejected as some finance companies may think you are trying to take out a loan for someone else.
If you don’t have your drivers licence to hand, the particular lender will advise you on which other similar ID document you can provide.
- Proof of income
You typically need to supply three months worth of payslips or bank statements to prove you have a regular income.
If you’re self-employed, you’ll need to provide bank statements dating back a certain amount of time. If the majority of your income is cash, then you’ll need to show another form of proof such as tax return information. Finance companies are extremely wary of becoming involved in money laundering and tax evasion schemes as these have historically been major issues for the automobile industry. As a result, lenders will always be wary of cash-based income declarations.
In instances where you’re unable to provide payslips, car finance providers may get into contact with your employer to confirm you work there. But don’t worry, no information about your finance application will be passed on.
If you’re on benefits, this is eligible to be counted as part of your income, on the condition that half of your income also comes from employment.
- Address history
When applying for car finance, you’ll need to provide address history from the past three years, so ensure they are within the right dates otherwise your application will be rejected.
For this, you can use gas or electricity utility bills or bank statements. If there are joint names on a bill, don’t worry, as long as your name is visible then this is eligible.
If the finance company requests additional paperwork from you, the dealership will notify you, and this is usually because there are problems with your documentation or things don’t match up. In some cases, the finance lender will reject your application entirely if this is the case, but this only usually happens if there is contradictory information.
Because a finance company's rejection is usually final, it's critical that you have all of the necessary documents on hand.
If you’re interested in other things to consider when taking out car finance, read our blog which details our tips on the things to do and research before signing off on a finance application.