WHAT YOU NEED, TO BUY A CAR!
For first time buyers, purchasing a vehicle can bring upon over-whelming emotions, a sense of excitement, nervousness, and stress due to all the information you will require to make your purchase. For example, the special offers or the different insurance plans available. The most frequently asked question car buyers need to know is, what do I need to buy the car?
This is mostly associated with customers looking to acquire vehicle finance as the process itself is complex and a lot of information is required to confirm if you qualify for vehicle finance.
At Carter, we take customers into simple step-by-step processes in purchasing their own car. The first step is answering the question-What do I need to qualify?
There are certain minimum requirements which need to be met first before customers can start the application process. If a customer does not meet a requirement, we advise the client on the next steps they can take for them to be able to own a vehicle and we make sure to also stay in touch with those customers so that we may be able to help them make their dreams come true.
Most dealerships will simply request your documents and essentially complete the finance application with you immediately, however, by adding a step in between, we make the next steps that follow simpler and easier. This allows customers the opportunity to resolve any issues which may hinder their application before they can take the timeous endeavor in going through the entire process just to find out disappointing news at the end.
These minimum requirements are explained in detail below and will provide you with some insight as to why they are important.
To qualify for vehicle finance, it is required that the applicant must have a valid drivers license. In some cases, not all applicants are purchasing a vehicle for themselves but rather for someone else (for example their child) so they may not have a valid drivers license, but the person they are essentially purchasing the vehicle for, does. Therefore, it is possible to nominate a parent, your own child or a spouse as the driver and proceed with the application. By nominating a driver, the applicant may still be able to own a vehicle.
It is preferred that the applicant either be permanently employed or self-employed as there needs to be some form of confirmation that the individual applying for vehicle finance has a stable income. Self-employed individuals also have to offer extended bank statements to confirm this stable income. There are certain cases which may enable customers to apply if they are not permanent or self-employed such as if a customer has an ongoing contract or is a pensioner. Fixed contracts can be tricky and would depend on the validity of the contract.
Affordability is one of the main criteria’s considered in terms of finance application approvals and therefore a minimum earning requirement for vehicle finance has been set. This set income is R6500 pm before any deductions, which is an individual’s Gross Income. Unfortunately, if the minimum earning requirement is not met, it is very likely that your application will be declined. If you have an extra income, it may be considered in your application, however, it will depend on various factors such as where that extra income comes from, how long the applicant has been receiving it and for how much longer, etc. Your income and proof of that income is an assurance needed to determine your affordability.
Credit is defined as “the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in future.” An individual’s credit profile is a summary of their financial history, and their credit score is based on your credit accounts, payment history and other factors.
A good credit profile is essential to purchasing a vehicle through finance as your monthly instalment on a vehicle is based on your overall credit profile. One of the main reasons for declined finance applications is a poor credit history. We always recommend customers to request a credit report to find out more information regarding their credit. This is a good tool to have, not only when it comes to applying for vehicle finance but also, to always keep informed about what is going on with your credit. You can request your credit profile through TransUnion on their website at www.transunion.co.za.
Once you have met all the above requirements, we can move on to the next steps of the process which will be the finance application. It is only once you have been pre-approved for vehicle finance, we require your documents. Your documents are vital during the validation process to confirm all the information you provided is correct and valid.
As each vehicle finance application is structured individually, the documents needed may not all be the same for every application. For example, a person who is applying under their business will need to submit different documents compared to a person who is applying under their own name. Therefore, it is best practice for a Sales FNI to advise a customer on the documents they will require.
Vehicle Finance may seem a bit complicated, however, here at Carter, we simplify this process for you and make the journey worthwhile!
# CAR BUYING MADE EASY