Answering five key questions surrounding vehicle finance

With the phrase ‘vehicle finance’ racking up an average of 590 searches monthly on Google’s search engine and raising over 40 questions around the topic on consumer rights portal, Answer The Public, it’s clear to see that there’s plenty of interest in vehicle finance.

Long Term Van Hire, vehicle hire specialists, helps us gain a better understanding on the subject as they take us through the answers of five key questions surrounding vehicle finance:


What does vehicle finance mean?


Very few motorists would be able to afford paying off a vehicle they want to purchase in one lump-sum payment, so vehicle finance comes into play as a means through which to pay off a purchased vehicle over an agreed upon term.


Who qualifies for vehicle finance?


Eligibility for vehicle finance depends on the convergence of factors including your individual circumstances as well as the firm or lender, so there isn’t any one clear answer to this question.


Many options are available though, which affords just about every driver the opportunity to find something suited to them.


• Hire Purchase (HP) – You put down a deposit and then proceed to pay off the remainder of the vehicle over a number of monthly instalments

• Personal Contract Hire (PCH) – You get to use a vehicle which you rent over an agreed period of time

• Personal Contract Purchase (PCP) – You put down a deposit for the vehicle required and then you make monthly repayments over an agreed period. Once the term has lapsed, you can either keep the vehicle, trade it in for a replacement car or return the vehicle and walk away.


How long does vehicle finance take?


You’d normally not have to wait more than 48 hours to get approved for vehicle finance, but keep in mind that credit assistance providers have to run checks on the following before approving:


1. That the loan product they offer meets your objectives and requirements

2. That there isn’t significant risk of the loan putting you in any immediate financial hardship.

3. That there isn’t significant risk of the loan putting you in any financial hardship at any point during your loan term.


What do you need for vehicle finance?


Your driver’s licence, insurance card, two most recent pay slips, proof of residency (e.g. a utility bill which has your name printed on it, a list of references not living in your household (each of these individuals should be referred to with their name, address and contact number) and any trade documents you have to hand in (with a title and registration featured).

Can my vehicle be repossessed?

When you buy a vehicle on finance, you have to pay the installments on time or run the risk of repossession. This means that the company would take the car’s ownership back from you. However, when you finance your vehicle using loan sharks or less-than-credible financiers, they might repossess your car illegally. To understand more about the rules of installments, consider reading up a bit more on repossession law or talking to a relevant attorney.

How do I transfer vehicle finance?


Swapping your finance over from one vehicle to another isn’t easy, but it is in an option that is available if you meet certain extenuating criteria.


• Settle the finance yourself if you have the money to pay off the agreement early

• Make an enquiry with the dealer to see if they perhaps can’t settle the finance and transfer the value across the new finance agreement.

• Call in your Halves and Thirds Rule protection (if you have it), which would give you the opportunity to voluntarily terminate your initial agreement if you’ve paid at least half of the total amount (including the deposit and payments).