What checks are done for car finance?

When you apply for car finance the credit provider will conduct various checks, including a credit check, proof of income and address history. You’ll also need to provide your driving licence and proof of ID, so make sure you have these documents to hand to avoid delays.

5 min read
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What documents do I need for car finance? 

It’s best to have all of the required documentation to hand when you apply for car finance so that you can fill out your application quickly and accurately. You’ll need some or all of the following paperwork:

  • your driving license
  • proof of ID - like your passport or birth certificate and any name change certificates
  • proof of your income and employment history - such as payslips, P45s or P60s
  • information about your address history for the last three years

1. Driving license 

Anyone who wants to take out car finance will need to be able to prove they’re legally allowed to drive, so you’ll need to provide your driving licence when you apply. The lender may also contact the DVLA to confirm the authenticity of your licence.

If you don’t have your driving license, or it’s being held by the DVLA, you may need to provide other documents such as your passport or birth certificate and any name change certificates as proof of ID.

2. Proof of ID and address 

You’ll need to prove your identity in order to take out car finance. Some companies will accept a driving license for this, others will also need a passport or birth certificate and any name change certificates. The lender will tell you exactly what they accept as proof of ID.

They’ll also probably want you to fill out your address history to make sure they can contact you if you miss any payments. Normally they’ll ask for up to three years’ worth. If you’ve moved around a lot, lenders may be concerned that you’ll continue to move address frequently – and this could make it difficult for them to get in touch with you if you miss any car finance repayments.

3. Proof of income and employment history 

You may need to provide your employment details, such as your job title, company name and salary, and how long you’ve been employed at your current place of work. If you’re self-employed, the car finance provider may accept three years’ worth of SA302s, which are summary accounts.

They’ll also usually want proof of income as evidence that you can afford the repayments. This is often in the form of three months’ worth of payslips or bank statements if you’re self-employed. The bank account details you provide them with will need to be registered in your name - either as a sole or joint account.

Do car finance companies contact your employer? 

Some people worry that car finance companies will contact their employer and tell them that you’re applying for credit. Don’t worry, car finance companies only want to verify your income so that they know you can afford the repayments. It’s very unlikely that they’ll contact your employer - but if you’re worried about this you can ask them before applying.

Is car finance a soft search? 

Initially a car finance company may carry out a soft search on your credit report, which won’t leave a footprint or affect your credit score.

Car finance soft searches are usually conducted to see whether you’re a responsible borrower and to decide whether it’s a good idea to lend to you. They’ll be specifically interested in how you’ve managed repayments in the past and whether you have any outstanding debt that you’re currently repaying that could restrict your ability to afford repayments on a new car. They may offer you an agreement in principle based on their soft search.

Once you make a formal application, the car finance company will carry out a hard search. This leaves a footprint on your credit history (whether your application is accepted or not) and can cause a temporary dip to your credit score.

Applying for credit multiple times in a short period will damage your credit score and stop you from being accepted for the best credit deals in the future. Try and limit your applications in order to keep damage to your credit score to a minimum.

What credit score is needed for car finance in the UK? 

There is no specific number you need to hit in order to be accepted for car finance. Generally speaking, the higher your credit score is the more likely it is that you’ll be accepted.

You’ll should also unlock access to lower interest rates and more deal options with a high credit score.

If you have a low credit score there are companies who specialise in lending to people in your situation. Shop around to find a deal that suits you.

You could also get a credit builder card to increase your credit score before applying for car finance. Just make sure that you meet any repayments on time and in full each month - otherwise you could damage your credit score even further.

How do I know if I’ll be accepted for car finance? 

You can use an eligibility checker to see if you’ll be accepted for car finance before you apply. These tools allow you to check whether the finance company will lend to you and what deal they’re likely to offer - without impacting your credit score. So, you can use these types of tools as many times as you like.

How long does it take to be accepted for car finance? 

Most car finance companies take one or two business days to consider your car finance application. 

If you bring all of the right documentation with you and have a good credit score, they may be able to make a decision on the day you apply. But don’t count on this happening – in most cases they’ll take a couple of days (or more) to consider your application, before deciding whether to accept it.

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*Representative example: Borrowing £6,500 over 5 years with a representative APR of 19.9%, an annual interest rate of 19.9% (Fixed) and a deposit of £0.00, the amount payable would be £166.07 per month, with a total cost of credit of £3,464.37 and a total amount payable of £9,964.37. Rates may differ as they are dependent on individual circumstances. Subject to status. We're a credit broker, not a lender.