Are you thinking of buying a car, but you don’t know very well how to pay for it? Financing is the order of the day and is one of the most used methods in the purchase and sale of vehicles.
At we want to give you the keys so that you know what the requirements are for financing a car, a method that will allow you to borrow money and return it in easy installments. Discover below all the necessary documentation to be able to finance your vehicle.
What is needed to buy a car in installments
As with the purchase of other goods, financing is one of the most used methods when purchasing a car. It is a loan system that allows you to pay for the car in installments, adapting to the ideal installment for you.
When buying a car, the first thing borrowers will take into account, be it the finance company or the bank itself, is that you can repay the money they are going to lend you. Assuming the debt is the main requirement for the financial or banking entity. To make sure, they will analyze your monthly income and expenses, in case you have other assets or loans.
If it is feasible that you can assume the debt installments, the minimum requirements to finance your car are:
- Be of age.
- Not be on any delinquent list. In the event that you have not repaid a previous loan or have stopped paying a bill, you will appear on a list that will prevent you from getting new credits.
- Your income level will determine if it is feasible to take out a loan to finance the car.
In addition to these basic conditions, it is likely that they will make you link to the entity that is going to lend you the money, for example, directing your payroll or taking out insurance. Likewise, financing a car at the dealership will mean that you will have to pay a down payment on the car that will be around 10% of the total price of the vehicle, approximately.
Documentation needed to finance a car
In addition to the basic requirements, when financing a car, a series of documentation must be presented, in order to carry out the financing procedures. The documents that must be provided are:
- Photocopy of the DNI.
- Photocopy of the last three pays lips or income you receive.
- Last income statement.
- Bank document where the IBAN account number appears.
- Proof of assets, if you have any.
- Laboral life.
Tips before financing a car
Before financing your car, it is important that you take into account certain tips that can go well when it comes to returning the money comfortably and without surprises, since there are many formulas for it and some may be less beneficial or comfortable for you.
- Real possibilities of repaying the loan: do not forget that with financing what you are doing is borrowing money, so first of all you must take into account your own budget and your own possibilities when buying the car. Acquire a vehicle that fits your economy and that allows you to return the money comfortably. Think that debts are always a negative point when it comes to benefiting from other loans. Also, keep in mind that, in addition to the car fee, you must pay registration, road tax and vehicle insurance.
- Control the existing financing options: as we have mentioned, you must study all the financing formulas before requesting or processing the loan. What suits you best? You can do it from a bank or from a financial institution and the conditions may vary. The financiers tend to be more flexible when granting loans to finance the vehicle, since they are usually linked to dealers and share one objective: to sell the car. However, banks usually offer better financing options. Which one do you prefer? Rate it!
- Interest rates: in addition to the total price of your car, by financing it you also acquire the commitment to return something else. To do this, you must take into account the interest rate they offer you when financing the car. This can be fixed, variable or flexible.
- Simulate your loan: in this way, you will be able to check what the monthly installments that you will have to pay will be and it will be much easier to make the decision that best suits you.
- Pay a good entry: paying a good entry, that is, a good initial money, will be much more beneficial for you. On the one hand, the loan you will have to request will be less, as will your long-term debt, and you will be able to reduce interest. It is always better to avoid financing 100% of the car.
- Internet: Keep in mind that sometimes you don’t need to go officially anywhere to calculate your car financing. There are multiple options on the net to do it online. What can be much more comfortable, especially if you are one of those who do not have much time. If you are not convinced, take a look at this other article on How to buy a car online.
Now that you know what the requirements are to finance a car, all that remains is to assess the options that exist in the market and get your ideal vehicle. Financing is a useful and convenient tool that will allow you to pay for your vehicle in installments while you enjoy it.