What Do I Need For Car Financing?

Do you need a vehicle upgrade? Or is this your first time buying a new car? If you plan to finance your vehicle, ensure you have everything you need to make the process smooth. Being prepared can also increase your chances of approval. Our team of finance experts at Woody Anderson Ford is here to support you and help you secure financing for your auto. From important documents you need to tips on applying, take a look at our car financing overview to increase your chances of getting the car you want.

What Documents Do I Need for Car Financing?

Before applying for an auto loan, you should have important documents such as pay statements, identification, and credit score to prove your borrowing worth. Here are the necessary documents you’ll need to start the car financing process.

Proof of Identity

Federal laws require lenders to confirm a borrower’s identification, so you’ll need a document that has your full name and photograph. Valid forms of identification include a driver’s license, a passport, or a government-issued ID. Depending on the situation, a lender could verify your identity without valid documentation. However, they may need to contact a third-party source, such as a consumer reporting agency, to verify who you are. Your lender may also require your Social Security number to gather more of your information.

Proof of Income

Lenders use proof of income to determine how much you can borrow and the amount you can pay back each month. They may also use your income to calculate the interest on your car loan. Get copies of your paystubs from the previous month and make sure they reflect how much you’ve earned in the year to date. Lenders also accept bank statements or W-2s as proof of income, but they might call your employer to double-check the accuracy.

Credit Report

Obtain a free copy of your credit report online before applying for an auto loan. A credit report contains information that determines your credit score. It’s a good idea to look it over to ensure the information is correct. If you notice an error on an item in collections or a note of a missed payment, you could file a credit report dispute claim to fix it.

Lenders review your credit history to assess its overall health. The better your score, the more you come across as financially responsible having managed your credit well. You can use your credit score to calculate how much interest your lender might add to your car loan. Your credit score can also determine your borrowing amount. These numbers help you understand what you can afford to pay and help you budget better.

Proof of Residence

Federal law requires auto lenders to acquire your residential information. They accept proof of residency from the address listed on your driver’s license and will double-check the address on your credit report to ensure the match. If necessary, your lender may require additional proof such as a utility bill, mortgage or lease statement, or credit card statement. Make sure these documents contain your physical address before submitting them to your lender.

Down Payment Method

The more money you pay upfront for your auto loan, the lower your monthly payments will be. A down payment decreases your interest rate and increases your chances of getting approved. Acceptable forms of down payment include:

• A personal or cashier’s check.
• Cash.
• Credit or debit card.
• A preapproved or personal loan.

Vehicle Information

Another major factor in determining your loan amount is the information on the vehicle you want to purchase. Noteworthy information includes the auto’s purchase price, the mileage, the vehicle identification number, and the make, year, and model. If you buy directly from our Woody Anderson Ford dealership, our sales team will provide the vehicle information for you.

Proof of Insurance

You must provide proof of insurance before driving your new car off the dealer’s lot. Make sure you carry adequate coverage that complies with your state’s requirements. Likewise, lenders have their own requirements for insurance. Ask what the requirements are to make sure you’re covered. Provide your car lender with a copy of your auto insurance policy when you sign the bill of sale.

How To Secure Financing for a New Auto

Once you have all your necessary documents in order, you can follow through with the remaining steps of auto financing.

Shop for Car Loans From Multiple Lenders

Shopping for an auto loan doesn’t mean you’re limited to one type of lender. Consider the following lender options to choose one that best suits your lifestyle and financial situation:

• National or regional banks.
• Local or community financial institutions, such as credit unions.
• Online car lenders with no brick-and-mortar locations.
• Online car retailers.
• Local car dealerships.

Determine Your Budget

When you gather loan offers from different lenders, you can better calculate your budget with anticipated monthly payments. The loan amount may vary depending on the car you purchase, your down payment amount, and your credit score. You can also try and vary the loan term to determine how much you’ll spend. For example, a short-term loan is less expensive since you’ll pay less interest over time. Remember, you don’t have to stick with the loan offer a lender gives you. You can choose to borrow less if it makes more financial sense.

Find a Car That Fits Your Budget

With a decent idea of how much you can afford to borrow based on your budget, it’s time to look for the perfect car. It’s important to note that some lenders have specific requirements with financing, such as excluding discontinued auto brands or time restrictions for approval of up to 30 days.

It’s best to purchase your vehicle from a trusted dealership that will guide you through financing. When you choose Woody Anderson Ford as your auto lender, we’ll help you select the best vehicle, find the right loan to fit your budget, and offer the quality assistance you need.

Get Preapproved for a New Ford at Your Local Dealership

Whether your credit score needs improvement or you need to figure out how much car you can afford, our finance department is here to help. Proudly serving the Decatur and Meridianville communities in Alabama, Woody Anderson Ford has everything you need, from new and used Ford vehicles to reliable auto financing. Fill out our online loan application to get the financing process started, or call us at 256-513-4315 if you have any questions. Our friendly staff will help you right away.

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