How long does car finance approval take in the UK?
Amid the intense cost-of-living pressures of the last year or so, it is fair to say that car finance has shown great relevance as a consumer product for many people. With the statistics suggesting that the consumer car finance market recorded 9% growth last year – despite global economic uncertainty and a chip shortage making it trickier to get new cars on the forecourt – it is clear that a lot of people are still using a loan to fund a car purchase.
So, what does all that mean for you? Well, it means you might well be reading this as someone who would like to get approved for a car finance deal yourself, and you might not want to be waiting for too long to make it happen. After all, you may need to get on the road in a new vehicle immediately.
This, in turn, brings us onto the subject of the speed of the car finance approval process. There is no doubt that historically, the process of getting one’s signature on a car finance deal wasn’t exactly known for being quick. It seemed to be a situation where stacks of paperwork would inevitably be involved, as paranoid lenders pored over the applicant’s credentials before making a decision on a potential loan.
Fast-forward to the 2020s, and lenders – of course – aren’t exactly less paranoid than they used to be. But with the advancement of digital technology, it has unquestionably become a much faster and less cumbersome process to make an initial application for car finance. That is the case even if you are applying not directly to a lender, but instead to a broker, which might have an extensive network of lenders to call upon.
But it’s one thing to know you can apply for a car finance deal online in a matter of minutes, and it’s quite another thing to know how long the approval will take. So, what do you need to know about the timeframes involved when it comes to this popular consumer product?
There isn’t a single answer to how long car finance approval will take
The short answer to the question of how long it takes to get approved for car finance in the UK is… well, there isn’t a short answer.
In some cases, it might take just seconds to be given a decision, while in other cases, you might be waiting several days. It all hinges on such factors as the specific lender that you approach, the state of your finances, and what type of car you would like to use car finance to purchase.
It’s a similar situation when you apply for car finance through a broker such as Car Finance Genie. It will typically take just a few minutes to complete and submit our online car finance application form, in which you will need to provide us with key details such as the exact amount you would like to borrow, and whether you are looking to finance a car, van, motorbike, or caravan/motorhome.
Once you have submitted your car finance application with us, we will naturally work as fast as we can to give you a decision. You might have a decision from us within minutes, but if not, we will strive to give you a decision on the same day if possible.
One of the reasons why the process is slightly more complicated in our case, is that as car finance specialists, we are brokers rather than lenders. That means we are not lenders in our own right, but instead represent multiple lenders that are among the most respected in the industry.
When you apply through us, we will compare the deals those lenders can make available in light of the details you supplied in your car finance application. We will then be able to present those deals to you, so that you can select the one that works best for you. From there, you will be able to proceed to final approval, before getting on with choosing that car you’re so excited about.
The difference between pre-approval and final approval
One of the most important things to appreciate about the car finance approval process, is the distinction between pre-approval for a loan, and final approval.
Some lenders out there will be prepared to give you instant pre-approval following the submission of your application. By “instant”, in some cases we mean you could have a decision within seconds; some other lenders, however, might take a few days to pre-approve you. Again, a lot is likely to depend on your circumstances.
An advantage of getting pre-approved for a car loan is that it gives you a means of ‘locking in’ rates with a particular lender you might have your eye on, so that you can then ‘shop around’ and compare deals from elsewhere. After all, at this stage, you won’t have yet completed the final paperwork that would commit you to any particular car finance deal.
If, on the basis of what you have been offered, you are happy to proceed with the given car finance plan, you might then move on to full approval. Again, the timeframe for this process can vary – everything might be sorted within hours, or within days.
Soft credit searches vs hard credit checks
Whatever the process of applying for and getting approved for car finance ends up looking like for you, it is also important to be aware at all times whether a soft credit check or a hard credit check is required.
Of course, if you’re applying for a loan such as car finance, a credit check – also known as a ‘credit search’ – will need to happen at some point. But as the respective terms suggest, a ‘soft’ credit check is less intrusive than a hard one, simply taking the form of an initial look at some of the information on your credit report, without any other companies being told of this. A soft credit check therefore won’t impact on your credit score.
There is a stark difference between this and a hard credit check, which represents a complete look at your credit report, and will be recorded on your report for other companies to see.
While a hard credit check is a standard part of the process of applying for a loan, a succession of hard credit checks being performed on your report in a relatively short space of time is likely to cause your credit score to go down, at least temporarily. This, in turn, could impact on your ability to obtain credit in the future.
We’re very aware of this distinction here at Car Finance Genie. It’s why, when you apply for car finance using our site, we will only carry out a soft search, and will not perform a hard credit check without your permission.
Hopefully, this can be a reminder for you that speed of approval is far from the only factor you should be concerning yourself with when you are on the lookout for car finance.
How can I speed up the process of getting approved for car finance?
While there are no guarantees in life – and the same certainly applies to how quickly you can get the go-ahead for car finance – taking the following steps should help ensure you get approved for car finance in a shorter space of time.
- Make sure you have a good idea of your budget
There’s a good reason why the websites of the leading car finance specialists also often have a car finance calculator available for people to use; you can expect a quicker response to your car finance application if you are realistic with the size of the loan that you request in the first place.
So, we would certainly advise you to carefully consider what your budget is, and how far that budget will go, before you submit any formal car finance application.
- Improve your credit score as much as you can
As we have previously written about here at Car Finance Genie, a poor credit score can be a key factor preventing you from getting approved for car finance at all – and even if you are offered a loan, it might be a factor that means it takes longer for your application to be considered.
So, if you have the luxury of taking a bit longer to improve your credit score before you apply for car finance, this could be well worth doing as a means of speeding up your eventual application – and maximising the likelihood of a positive decision.
- Have all the necessary documents ready
Making sure you have all the documents to hand that can be crucial to a car finance application – such as your driving licence, bank statements, and proof of employment and income – before you proceed with the actual application, can also help make the process a fast one.
To minimise the chances of delays, you might go as far as scanning the documents into your computer ahead of the application, in addition to keeping physical copies on hand in case they are needed.
- Apply early in the morning
While some lenders offer ‘same-day approval’, this probably won’t be the case if you apply after the end of business hours on the given day, or at the weekend.
By contrast, applying as early in the day as possible on a weekday, can help ensure your application is attended to rapidly, so that you can have that all-important decision much sooner – hopefully, on the very same day.
There you have it! Hopefully, this article will have given you a helpful rundown of what to expect when it comes to car finance application and approval timescales, so that you can be thorough in your preparations, and realistic in your expectations.
Get your free, no-obligation application in to the Car Finance Genie team today, and we will work quickly to hopefully bring you the deal that represents the best possible match to your budget and practical requirements. Good luck!