Your Questions on Vehicle Finance

Vehicle finance is always interesting because every day, people are buying cars. Google gets almost 600 searches a month on this specific topic. To help you better understand this subject, join vehicle hire specialists Northgate as they work to answer five key questions surrounding vehicle finance:


  1. What does vehicle finance mean?

It means you can buy a vehicle without having all the cash available to cover the cost. Financing enables you to pay for your purchase on a monthly basis over an agreed period of time.

  1. Who qualifies for vehicle finance?

There are many aspects of eligibility and a lot depends on your circumstances as well as the lending policies of the finance company.

There are a number of avenues you can explore with regard to the type of loan for which you apply. Choices mean that there should be one that will suit you best.

  • Hire purchase — You pay a deposit and pay the rest off monthly.
  • Personal contract hire — You never own the vehicle. You simply pay a monthly rental and at the end of the term, you hand it back to the leasing company.
  •  Personal contract purchase — This is a bit in between the other two. You pay a deposit, you make monthly payments over an agreed period, and at the end of the term you can either keep the vehicle, trade it, or just hand it back.
  1. How long does vehicle finance take?

Some finance companies can be super quick but it really depends on your credit rating. If you have AA rating then expect approval within hours. Some personal aspects the finance company will clarify are:

  1. That the type of loan you are getting is exactly what you want
  2. That you can pay it off without any financial hassles
  3. That there isn’t a significant risk of the loan putting you in any financial hardship at any point during your loan term.
  1. What do you need for vehicle finance?

The rate of financing that is offered to you will be affected by your credit score. Bring along the following to the dealership:

  1. Your driver’s licence.
  2. Your insurance card.
  3. Your two most recent pay slips.
  4. Proof of residency — for example, a utility bill which has your name printed on it.
  5. A list of references — provide their names, addresses and contact details. They should not be living with you.
  6. Trading a car? Bring all the documentation you have
  7. How do I transfer vehicle finance?

Sometimes you want to replace your old car with a new one but you still owe money on the existing loan. You have some options.

  • Pay it Out — This is the simplest solution. Then you can do whatever you like. Just supply proof of loan payment completion.
  • Ask the Dealer about a Finance Deal — Some dealerships are happy to pay out the existing loan and add the amount to the new loan.
  • The Halves & Thirds Rule — Some types of finance allows you to terminate your agreement so long as you have paid at least half of the total amount to date. This is known as protection through the Halves & Thirds Rule.