Car finance eligibility checker
Car finance can seem daunting, but fear not: nail these eligibility criteria and you should be in a good position to get approved
When you apply for car finance, the lender or broker will want to know a number of details about you, in order to be confident that you are a safe bet to lend money to. Some of these details the lender will find out themselves from your credit report. Other bits of information, however, you will need to provide.
Below is a list of everything you’re likely to need to tell a lender or broker when applying to take out car finance. Look at each section for more information on the specific details of what you’ll need to provide.
What affects car finance eligibility?
- Employment status
- Proof of income/affordability
- Personal details
- Bank details
- Proof of ID
- Proof of address
Knowing that you have a regular income with which to pay for your new car finance contract is naturally pretty important to lenders. And if you’re in full-time work, that’s viewed very favourably by lenders, as it implies that you have a steady income and some sort of job security.
You can still get finance if you don't have a full-time job, but it can be a little harder. Those on zero-hours contracts, for example, will need to show proof of a regular and consistent income (you can read more about that below), as will those who are self-employed.
And if you don’t have a regular income, you may need to go for a guarantor loan, where somebody else vouches for your ability to pay and 'guarantees' the finance for you, though this means that they will also be responsible for the debt if you fail to keep up payments.
- Can I get car finance if I'm unemployed?
- Can I get car finance if I'm retired?
- Can I get car finance if I'm on benefits?
- Can I get car finance if I'm a student?
- Can I get car finance if I work part-time?
This is related to your employment status in many ways, but goes a bit deeper. Not only do lenders want to be sure that you have regular employment (or a guarantor to assure them that if you fail to meet payments they will step in), they also want to be certain that you’ll be able to afford the payments.
For this, a lender will want to have an understanding of both your job role and current salary - which they may check with your employer, or may ask to see payslips or bank statements to confirm.
Again, if you’re self-employed this is a little more tricky, and you may need to provide details of company accounts, tax returns or possibly bank statements to prove your income. However, as long as you have sufficient levels of regular income, this shouldn’t be an issue; at the end of the day, if the lender can see evidence that you have a consistent income that is high enough to cover the additional cost of car finance once your other expenses are taken into account, they are likely to approve you.
If you want to pay for your next car with monthly payments, you are going to have to make regular payments for the finance, so you will have to provide bank account details to the lender or broker when making an application for car finance.
Normally, the account needs to be in your name - or jointly in your name - and you may well have to have had the account open for three years or longer (or provide details of previous accounts if not).
If all those boxes are ticked, you will just need to provide the account number, the bank sort code and (often, but not always) the branch address.
Generally, most finance companies will require a driving licence as proof of ID, and since you are taking out finance for a car, it’s fairly reasonable to assume that you’ll have one.
If for some reason you can’t get hold of your licence (if it’s with the DVLA to have details changed or to have penalty points added, for instance), then other forms of ID such as a passport can be suitable. In these cases, the finance company will also need to check with the DVLA to be sure that you actually do have a valid driving licence as well.
Generally, you will need to provide one or two proofs of address. Normally, a utility bill or council tax demand - where you are named on the bill and it shows your address - will be fine for this. Bank statements are often also usable for this, though not all types of bank statement will be acceptable.
It’s worth mentioning, too, that mobile phone bills are often not considered an acceptable proof of address.