Arranging Your Car Finance

You need a new car and may be wondering where to arrange the car finance for your purchase.

Available sources

You obviously have a number of options ranging from;

- your own bank;
- the dealership where your intend to buy your car either in the form of a loan or HP;
- or a specialist car loan company.

Each may have its merits but if you are looking for something to happen quickly then you may want to think about using an online car finance specialist.

Applying online

Following a short online application you may typically get a decision one way or the other within a matter or hours.

Generally you'll be asked to supply the finance company with your personal details, name age address etc - as well as possibly some information about your employment.

They may also ask for a copy of your driving licence and perhaps a salary or wage slip. In come circumstances they may additionally need to see a utility bill or a couple of recent bank statements.

What happens next

If your application is approved then you may typically be given what amounts to a credit limit.

This figure represents the maximum amount of loan that the credit specialists feel you can comfortably afford to repay each month. It may be important to remember that this figure is not necessarily the sum that will be advanced to you. It is the maximum value not a guaranteed amount.

You can then go out and find your car!

Car value

Once you have found your car, you may need to pass details of it to the finance company.

Typically they'll need to know the registration, age and the mileage, details about the seller and, of course, the amount of finance that you need.

They use this information to work out the market value of the car and it's this figure and not your credit limit that typically forms the basis of the car finance loan.

While this figure may be the same as the asking price, it may not be. If the amount that you can borrow for this car is less than the asking price then you may have to:

- put down a deposit yourself;
- part exchange your old car;
- find another vehicle.

Agreeing the deal

Once you have chosen your car and the finance has been agreed, what happens next may depend on the actual lender.

In some circumstances, you may be able to download your paperwork from the internet site. Otherwise is could be sent out either to you or possibly directly to the seller of the car.

Typically the payment from the car finance company may be made directly to the car dealer and once you have paid any deposit required, that's it! You have your new car. Of course, do note that different car finance providers work in different ways, so this should be used as a guide only.

About this Author

Maxwell C Kirby is a freelance personal finance journalist who loves cars! Outside of his work life, he is well known commentator on all things related to cars, whether it is reviewing them or discussing car finance and car insurance

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