If you are planning to buy a new car by taking a loan from an automobile financing company, you should learn about the rules and eligibility to get the loan. When you provide all the necessary documents for the loan, the lender will do what they can to verify them. And that includes the documents related to your employment.
Now, you may ask, “Do car finance companies contact employers?”
Car finance companies may contact your current or past employers to ensure that the paychecks you have submitted for the loan are authentic. However, some lenders will not call employers if they are satisfied with the documents.
In this article, I will briefly talk about matters like:
- Do car finance companies contact employers of the applicant
- What do car finance companies check
- What may prevent you from getting a car loan
Do Car Finance Companies Contact Employers?
When you are short on money but still want to buy your dream car, a car finance company will gladly support you but you must be eligible for the loan and show proof of stable financial status. Your papers may show a nice paycheck from your workplace, but sometimes the lenders may want to verify these documents.
Hence, lenders will sometimes actually contact your employers to make sure that you have a stable job to pay back the loan in time.
With that said, it’s not that often that lenders will contact employers of the loan applicants. Even if they do, they will keep it discreet in order to maintain your privacy.
There are a few reasons why an automobile financing company may contact your employer or even past employers. Some of the reasons are:
- To cross-check the details of the documents you have submitted.
- To clear any doubt about any suspicions about any documents.
- To reach you if they can’t contact you in any other way.
Some money lenders may also contact your employers for proof to confirm you are a regular employee and you are reliable. If your documents are backed with enough proofs and guarantees, there is a high chance that the lenders will not contact you for further confirmation from your employer.
So, when you select a company to take loans from, learn about their rules and be prepared to take action. Provide them with authentic information and documents so that if they do in fact contact your employer, they won’t find anything suspicious.
What Do Car Finance Companies Check?
When you are applying for a car loan, the finance lenders will ask you to submit a lot of documents related to your personal details, bank account, employment status, and so on. Applicants should be prepared with these papers to get the loan approved as soon as possible.
Here is some general information on what types of things you’ll have to provide a car insurance company with.
Applicant’s Personal Details
The first requirement for getting a new car financed is to give up some of your personal information. This information can include:
- Applicant’s full name. Applicants also have to give their previous name if they’ve ever changed it.
- Date of birth.
- Residential Status. It should be detailed and precise.
- Marital status. If married, then give the details of your spouse.
- Full address and living history over the last five years. If you’ve recently moved, you may have to give that information too.
- The full address of all the places you have worked and the necessary information of all your employers.
After your personal details, lenders will want to know about your financial status.
They will specifically ask the name and address of your current workplace. They may even ask for information on your last few employers too, while it is unlikely, don’t be completely surprised if this happens.
The lender will want to know the consistency of your employment, if they see you frequently change jobs, they could ask for the employment record for the last five years. Tough crowd hey!
On the other hand, if you’re self-employed, you’ll likely have to give up some details of your business.
At the end of the day, these lenders are businesses too, they want to ensure that there is a high level of probability they’ll be able to recoup their loan while making a profit on it.
Applicants have to submit the details of the bank account in which they are going to use to pay the loans in monthly installments. It’ll be better if the account is active for at least three years, but if it’s not you should still be fine.
Car insurance companies usually inspect the account number, sort code, transit numbers and other details of the bank before approving the loan.
I always recommend banking with well known banks to avoid any confusion or uncertainty.
No car financing company will ever give you money without a driver’s license or proof that you are getting it soon.
Is there really anything else to say on this point?
Proof of Address
The financial lenders will need proof of your permanent and current address. For this, you may have to provide something like an electricity bill, bank statements or tax papers where the address is clearly stated.
Income and Credit Score Details
Applicants have to show bank statements showing their current salary and income source. That’s just good common business sense on their end.
Additionally, car finance companies likely won’t approve a loan if you have a bad credit score. So, lenders will check credit scores and credit card history to see if there is any inaccuracy in the financial details you have shown them. If you have a good credit score, the car insurance company will be much more likely to approve your requested loan.
Why wouldn’t they? If they feel confident you will pay back the loan (with interest), well then you’re a profitable customer for them!
So, these are all the criteria most of these car finance companies emphasize while considering giving loans to any applicants. So make sure to be prepared!
What Would Stop Me from Getting A Car Financed?
When applicants fail to provide all the necessary documents, they are bound to get rejected. Again, even if they provide all the documents, it is possible it’ll still get rejected if you provide false or incorrect information.
Here are some reasons why car loans get rejected:
- Low Credit Score: Lenders can instantly reject your application if your credit score is too low.
- Incorrect Address: Another reason for not getting a loan is if you give an incorrect address. Lenders don’t like false information or dishonesty, you have to be upfront with them. Which brings me to my next point.
- Giving False Information: Giving any false information is a huge red flag when applying for loans. For example, if the lender calls your employer, and the information about your income does not match your statements, then you will be rejected. In other words, don’t be a liar.
- No Driving License: This one is pretty simple, no driving license, no car loans.
- Age and Experience: Many car finance companies consider the age of their applicants. The older you are, the higher chance you have of getting a loan. Although many companies give loans to young people from 18 to 21 years old, they’ll still want proof that they’re is a reasonably good chance the loan receiver will be able to pay back the loan.
So as you can see, these are a few reasons why financing requests for new cars can get rejected by car finance companies. If it happens to you, just ask the financing company why your application was rejected, that way you may be able to make some changes to get it approved.
For these reasons, it’s so important to always be honest and provide whatever documentation the financing company asks for, and then let the chips fall where they may.
So, do car finance companies contact employers? Yes, they can, but it is not always the case.
If they feel it’s necessary though, it’s not completely uncommon for it to happen.
If it happens, it happens, it shouldn’t be a big deal. As long as you were upfront and honest at the beginning, this should be nothing but a minor speed bump on your journey to getting your new car.