Buying a car is a big investment and according to the latest data, more than 90% of Brits take advantage of finance and leasing options when purchasing a new vehicle. They can be a great way to maximise your budget and unlock access to newer and more desirable models without stretching yourself too thin.
While car financing is a popular alternative to purchasing a car outright, it’s doesn’t have the same ‘quicky and easy’ reputation as applying for a new credit card or taking advantage of ‘buy now, pay later’ services like Klarna, Laybuy and Clearpay.
So why does car financing take so long? Securing car financing can take time as there are some important steps that need to be completed before your application is approved. Below, we take a closer look at the car financing process and why it can sometimes take so long.
Why are applicants carefully vetted?
The average motorist spends around £226 per month on car finance payments, allowing them to get behind the wheel of their dream car without laying down an unrealistically high lump sum. However like any lender, car financing companies want to make sure the benefits outweigh the risks when approving applicants.
To do this they carry out credit checks designed to give them an idea of your borrowing habits. While multinational consumer credit reporting company Experian says there’s no ‘magic number’ that will secure you a loan, a ‘good’ score falls between 881 and 960 while an average score sits somewhere between 721 and 880.
Finance & Leasing Association (FLA)
The car financing industry is strictly regulated to protect both borrowers and lenders. The Finance & Leasing Association is the industry’s leading trade body and is made up of hundreds of members, including banks, independent financial firms and building societies.
Lenders approved by the FLA are subject to stringent protocols, which can slow down the loan application process but ultimately helps to improve the car loan experience for everyone involved.
Despite the challenges presented by issues such as COVID-19 travel restrictions and supply chain disruptions, FLA Director of Research and Chief Economist Geraldine Kilkelly predicts further industry growth over the next year.
“Despite the risks to the economic and market recovery from supply chain disruption, higher inflation and further waves of Covid-19, our latest research suggests that the industry has maintained its optimism about the opportunities for growth,” says Kilkelly. “FLA’s Q4 2021 industry outlook survey shows that 88% of motor finance providers expected new business growth over the next twelve months.”
Compiling your documents
From renewing your driver’s licence to applying for a new passport, most serious applications call for documents and paperwork. Car finance is no exception, with multiple forms, documents and contracts to sign before you get the green light. This includes things like proof of income, proof of address, copies of your driving license and personal bank details. All need to be passed on to your finance lender before you’re approved, which can stretch out the process.
If you’re wondering why does car financing take so long and want to speed up the process, it’s a good idea to prepare in advance and keep all your key documents in an easy to access folder.
Soft vs hard credit checks
One of the best ways to fast-track your car finance application is to kick off the process with a soft credit check. These are quick and easy to run, combing through your financial history without leaving a permanent mark by your name. A soft credit check will give you a good idea of what types of loans and amounts you’re eligible for. Knowing this will help your decision-making process when applying for car loans and boost your chances of approval.
Stay away from hard credit checks, if possible, as these leave a signature on your record. They’re carried out by dedicated credit agencies like Experian and Equifax and dive deep into your financial history. While you’ll probably need to undergo a hard credit check before you’re approved for a loan, this should be the last step and ideally shouldn’t occur more than once. Basically, you only want to go ahead with a hard credit check if you’re certain you’ll be approved.
Speed up the process with My Car Credit
Why does car financing take so long? The truth is it doesn’t have to. With the right people on your team, car financing doesn’t have to be a headache. As part of the largest motor finance broker in the UK, My Car Credit makes finance simple and accessible.
We regularly receive great feedback from our customers about the speed of our service, for example:
“The whole process was very simple. I was assisted by the friendly staff every step of the way. I got a reasonable rate, and it was all terrifically efficient.” Ben B
“Absolutely brilliant, made it very easy and clear and had it sorted and cleared with the car company in no time.” Steven Canning
“Very helpful and extremely quick. Perfect customer service.” Jack Murray
“This was the most efficient and quick process I have experienced. Very helpful, no need to chase, they are always updating you daily – would definitely use again and recommend!” Mrs H
Powered by Evolution Funding, we combine our award-winning technology with access to a broad panel of lenders. This allows us to match you with the best products and lenders for your unique circumstances, improving your chances of acceptance and securing the best possible rates.
It all starts with a car loan quote using our quick and easy finance calculator. When you’ve crunched the numbers and determined your budget, you can get the ball rolling and secure your car financing as fast as possible.
Representative APR 8.9%
Evolution Funding Ltd T/A My Car Credit
Require more help?
Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!