Getting a car on finance is often a much more viable and cost-effective option than paying for the vehicle upfront in full. It enables you to spread out the total cost of your car into smaller, more manageable amounts.

When you choose to get your car on finance, you’re effectively getting a loan. Therefore, there are many background checks and documents to complete before you can drive your new car away from the dealership.

Below, we have covered some of the key steps that are completed when to get a car on finance.

Finance Checks

Because you’re loaning the car for the duration of your contract and don’t technically own it until you have paid it off fully, the car lender will need to check that you can afford to make the regular payments for your vehicle each month.

Your car lender will likely ask for your last three bank statements if you’re employed and your last three years of tax returns if you’re self-employed. You will need to prove your income when paid in cash as well.

Providing accurate finance information instils trust in your chosen lender, increasing the likelihood that they will lend you the car you have your eyes on.

Credit Checks

Alongside financial checks, your car lender will conduct background credit checks to confirm your reliability with making regular payments. Having a great credit score increases your chance of a successful car loan because it shows your lender that you’re reliable with repayments.

Improving your credit score involves making loan repayments on time, such as your monthly mortgage, and avoiding significant debt. You can get an accurate credit score from your bank, and this is something that your lender will also confirm.

Price Negotiation

Not every car lender will be happy to negotiate on pricing. However, it’s worth asking your chosen lender whether they are willing to be flexible with their car finance loans.

The landscape of car buying is always changing, and not every car lender will be happy to negotiate on pricing. However, it’s worth asking your chosen lender whether they are willing to be flexible with their loan prices and conditions. Don’t be afraid to haggle and see if you can obtain a better deal for the car you want. The worst that can happen is that your car lender refuses to decrease your monthly repayments.

Make sure you are clear about the fees associated with lending your chosen car so you don’t end up with any unanticipated expenses during your contract.

Completing the Paperwork

After you have agreed to a car financing contract with your chosen lender, you can start completing the paperwork. Make sure you read through the documentation provided, including all of the fine print, and raise any concerns you may have before signing anything.

Your paperwork will include a sales contract and a personal loan agreement. There may be additional documents to sign but this will depend on the lender and their protocols.