How to apply for car finance online

Confused about the process of applying for car finance online? Keep reading to understand how it all works

Matt Rigby
Jul 11, 2021

Although paying for finance on a car is a significant financial outlay for most people, the actual process of sorting that finance out needn’t be a daunting one. In fact, it’s a process you can generally undertake in just a few minutes, and from the comfort of your own sofa.

You will generally need to prove who you are and that you are able to afford the payments for the finance you are applying for, but once you’ve done that, and have successfully passed a credit check, you can simply sit back and wait for your new car to arrive.

It’s worth noting, though, that a formal application for a loan, Personal Contract Purchase (PCP) finance or any other type of finance will involve what’s called a ‘hard search’ on your credit record. Too many of these will negatively impact your credit score - as it makes it look like you're desperate for money.

With that in mind, make sure you use ‘soft search’ finance tools or comparison sites when you’re doing your research for your new car. This means you can get a good idea of the best deals out there, without negatively affecting your credit score. When you have a good idea of the best option for you that you're likely to be approved for, then you can make a formal application for that finance deal.

Choose a car and get a ballpark cost

Finding a car you like is perhaps the most fun bit of searching for a new car, but you can also start to look at your approximate costs at this stage, too. On a site like BuyaCar, you can use a finance calculator tool that will let you estimate the rough finance costs for specific cars. This should give you a good idea of what you can afford, before you apply for finance.

If you’ve found a car online - or at a physical dealer or elsewhere - that doesn’t directly offer an online finance tool, you can still get an estimated cost online by going to a third-party vehicle finance provider. Many of these brokers and lenders offer soft-search finance quotes as well as more basic online finance calculator tools. Some of these will even let you enter the registration number of the car you’re looking at purchasing so you can tailor your finance quote to a specific vehicle.

Apply for finance

When you’ve decided on a vehicle, you can formally make the finance application. This will involve filling out a form with some personal details, focused on your financial circumstances, so that you get a quote that’s specific to you. You’ll need to tell the lender or broker how much you earn, what your main outgoings are - whether or not you have a mortgage or monthly house rent - and often details like the number of dependents in your household that you support (such as children or elderly relatives).

If you’re self-employed, it can be a little more tricky to get finance, but it’s still possible, although you will have to provide more details to prove your income, using documents such as annual business accounts, HMRC documents that prove your taxable income, or sometimes bank statements for your business.

The final hurdle is proof of identity and address - generally a scan or digital photo of a driving licence and a utility bill that shows your name and full address is what you’ll need top provide for this proof.

When you apply online with a site like BuyaCar, you may find there is a small fee to reserve a particular car, but this is generally wrapped up in the cost of the overall finance or in the deposit for the car - if you’re providing one.

Arrange for delivery

Once your finance is approved, then the final step is to arrange for delivery of the car. In many cases the website or finance broker can deal directly with the dealer on your behalf and offer you a series of delivery options.

In other cases, you may need to contact the dealer directly to arrange delivery - or go and pick up the car from the dealer if you prefer.

It’s also worth remembering that, under distance selling regulations, any product bought online can be returned within 14 days, so if the car somehow isn’t right for you, or isn’t quite what you expected, then you shouldn't be stuck with it.

 

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