Vehicle finance is a topic of interest for many. On Google, the term is searched approximately 590 times every month, whereas consumer insight portal Answer The Public reveals that web users make more than 40 inquiries about it.
What is vehicle finance?
Not everyone can afford to buy a thousand dollars vehicle. If you cannot afford one, do no fret! Vehicle finance would let you purchase the car of your choice by paying the sum in small instalments instead of making a huge one-off payment.
Who can get vehicle finance?
Basically, there are no set rules for this. Your eligibility for the car loan depends on the money lending party and your financial circumstances.
There are a number of options for motorists and just about everyone can find something suitable. Let’s have a look at some available choices:
- Hire purchase aka HP — With this option, you will have to make a small down payment and the rest can be paid in monthly instalments.
- Personal contract hire aka PCH — PCH is a van lease option that lets you hire a vehicle for a certain time period. After the end of the agreed duration, you have to hand over the vehicle. This type of vehicle finance is also called personal leasing.
- Personal contract purchase — This one lies somewhere between the two mentioned above. You can pay for the vehicle in monthly instalments after you deposit a certain amount in the beginning. After the end of the agreement, you can either give the vehicle back or keep it. You can also replace it with another vehicle if you like.
How long do I have to wait for approval?
It may take around 48 business hours to get car loan approval. However, make sure your loan provider is clear on the following things:
- The loan serves all your needs and purposes
- Your financial situation is not directly disturbed by taking up the loan
- The loan doesn’t put you in a financial crisis during the term of the loan
What are the requirements for vehicle finance?
The answer to this question depends on your credit score. Don’t forget to take the following things with you to your loan provider:
- Your driver’s license
- Your insurance card
- Two latest pay slips
- Evidence for your residency — a phone bill with your name printed on it would do.
- References — give the name, address and contact number of different individuals. This must not include the members of your household.
- Trade documents if any — it should feature a title and a registration.
Can I transfer my vehicle finance?
Do you feel like getting a new car, but have some pending debt? Don’t worry! You can switch your loan to another pair of wheels. Let’s see what options you have:
- Pay off your loan early — Paying off your loan early enables you to get a new vehicle yourself. Don’t forget to ask your finance provider for a proof of the completion of your loan.
- Ask your credit provider if they can manage your loan — Sometimes, you can settle your finance with the dealership. Just provide your dealer with the right license to transfer your vehicle finance to a new vehicle under a fresh agreement.
- Use Halves & Thirds Rule to get protection — If you have repaid at least half of your debt, you can terminate your vehicle finance. Check if your loan provider has this option.