If you're considering applying for car finance, you've come to the right place. From understanding affordability to knowing the required documents and the approval process, we’ve got you covered. Read on to learn everything you need to know about applying for vehicle finance with Auction Finance.
How Should I Prepare for a Car Loan Application?
Preparing for a car loan application is essential for increasing your chances of a successful submission. A condition of approval may be a deposit. It is therefore imperative to get your finance application processed, to ensure you know if a deposit is required. You may want to reduce your capital debt by voluntarily paying a deposit. Check your credit report to understand your current score, determine how much you can afford, and explore the various options available to you. Various platforms offer a credit scoring calculation free of charge.
How Are Car Finance Decisions Made?
Lenders gather your information with your permission and perform a credit check to determine your eligibility for car finance. If you are under debt review or listed on ITC, this will automatically disqualify you for vehicle finance. The following information will be needed to submit a finance application:
- Proof of income: 3 months’ most recent payslips.
- Bank statements to verify the income.
- A completed application with details of income and expenditure, address details, employment details, next of kin details, and existing debt.
- A valid SA driver’s license.
- A valid SA identification document.
- Proof of address.
Comprehensive insurance is a mandatory requirement when purchasing a vehicle. Factor the cost of the monthly premium into your calculations when applying for finance. A credit check will be performed, and the approval decision will be based on affordability criteria, based on the most accurate information provided. Understanding the application process beforehand can help you prepare and increase your chances of approval.
Once the lender has all the necessary information, they can decide on your car finance eligibility. Consider going for a pre-approval process, which involves a soft credit search and is less damaging than multiple applications. Note that the decision on approval is at the discretion of the lender (Bank).
What Is the Validation Process for Getting Car Finance?
The information you provide will be validated for accuracy, which includes a credit check and an assessment of your financial situation. A good credit score will also be an indicator of the interest rate that can be offered and empowers you to negotiate on the interest rate offered.
What Is Car Finance Affordability?
Affordability involves checks to ensure you can comfortably afford the repayments. These checks usually include a credit report review, as well as details about your monthly income and expenditure.
What Do I Need to Apply for Car Finance?
Before applying for car finance, you’ll need documents to prove your identity, income details to show how much you earn, and proof of address. It’s also helpful to know your credit score so you can see if it needs any improvements.
What Documents Will I Need for Car Finance?
To get approved for car finance and purchase your new vehicle, you’ll need to provide certain documents:
- Identification: South African ID Book/Identity Card
- Proof of Address: Recent utility bill (not older than 3 months)
- Proof of Income: Last 3 months’ payslips or latest payslip and last 3 months’ bank-stamped statements
- Driver’s License: Valid South African Driver's License Card
Finance applications are done online and digital copies of your paperwork are allowed, but the original documents will have to be seen by the finance consultant for verification purposes.
How Long Does It Take to Get a Decision on Car Finance?
Our platforms allow for immediate returns on submissions. Auction Finance pride ourselves that we offer a quick turnaround time on application submissions; you can expect an answer instantaneously once the application is submitted, pending validations.
Why Has My Application for Car Finance Been Declined?
The most common reasons are being blacklisted on ITC, under debt review, unaffordability, or not meeting the lender’s qualifying requirements. Other reasons can include not having a valid driver’s license or failing to prove your address.
What to Do If You're Rejected for Car Finance
If your car finance application is rejected, find out why so you can address the reasons for the decline. For example, if it’s due to a low credit score, work on improving your credit rating. If it was a simple mistake on the application form, correct it and try again.
To Successfully Submit Your Application for Vehicle Finance, Provide the Following Documentation to info@auctionfinance.co.za
Private Individual
- Copy of South African Identity Book/Identity Card
- Copy of Valid South African Driver's License Card
- Most recent payslips for 3 months AND the last 3 Months’ Bank Stamped Statements
- Proof of Residential Address, not older than 3 months.
Finance on Company Name – Additional Requirements
- Company Registration Documents (CK1 & CK2)
- Latest 6 Months' Bank Stamped Company Bank Statements (No Internet Statements will be accepted)
- Latest Audited & Signed Financials
- Latest management accounts
- Identity Documents of all members/ directors of the Company
- Proof of Company's Physical Address & Proof of Residence for Directors
- BRNC: Business Registration Number Certificate + proxy ID
Please note: According to NCA Legislation, all these documents are required. Vehicles will not be delivered unless all documentation is provided. Original documents must be presented on the day the contract is signed and the vehicle is collected from the auctioneer or dealer.
Learn everything about applying for car finance in South Africa. Apply online at www.auctionfinance.co.za. Auction Finance is an authorised FSP (FSP34936).
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