How long does car finance approval take?

Here’s what happens after you get approved for car finance with Moneybarn:

1. After being approved, you can browse vehicles within your budget using our vehicle finder tool in partnership with Exchange & Mart. If you can’t find what you’re looking for, an expert from our Direct Sales team will be able to help.
2. Our friendly team will guide you through the process, helping you provide proof of identity and income documents. If you’ve been approved in principle, our experts will help guide you through any affordability checks.
3. Once you’ve found the vehicle you’d like to finance, as long as it is within our lending criteria, we’ll provide you with a full quote. If you are happy with this, we’ll prepare your contract. It’s at this point that we make a hard credit search to confirm your application.
4. When we receive a copy of your signed contract, we’ll transfer the funds to the dealership. Once this is done, we’ll let you know, so you can collect your new vehicle!
5. The car will be registered in your name, and you’ll receive the necessary documents. You must arrange comprehensive insurance with an excess of no more than £500. You will also be responsible for servicing the vehicle and arranging MOTs.
6. Your car finance agreement will specify the monthly payment amount and due date. Making these payments on time is crucial to maintaining a good credit history. Failure to make car finance payments can result in damage to your credit score and even repossession of the vehicle.

You might be refused car finance in the UK for several reasons, including:

1. Low or no credit score: if your credit score is too low, it can indicate a higher risk for the lender, making it difficult to secure car finance. Likewise, if you have no credit history, lenders might find it challenging to assess your creditworthiness, making it harder to get approved.
2. Affordability: your application might be denied if lenders believe that, after carrying out affordability checks, the loan amount is too high for your income. Similarly, lenders might worry about your ability to handle additional financial obligations if you already have a significant amount of debt compared to your income.
3. Inconsistent income: if you have a history of changing jobs frequently, are currently unemployed, or are self-employed, it could make it difficult to get approved.
4. Incomplete or inaccurate information: providing insufficient or incorrect information on your application can lead to rejection.

Generally, a higher credit score increases your chances of approval and may offer you better interest rates and terms.

Most lenders prefer applicants with good to excellent credit scores; however, some lenders also work with people with fair or average credit scores. Additionally, some specialised lenders work with people with poor credit as well.

You can check your credit score online by registering with any of the three major credit reference agencies (CRAs) in the UK. These are Experian, Equifax, and TransUnion.