If you’re planning to buy a car with the help of a car finance agreement, you will need to provide information on your current circumstances. With the many pieces of documentation requested by lenders, you may be wondering ‘do car finance companies contact employers?’ The answer is that in most situations, these companies only require proof of earnings - and they do not have to contact your employer in order to get this. They can check other documentation instead. However, in certain situations, a car finance company may contact your employer.
Read on for further information on why a finance company may contact your employer. You’ll also be able to discover the kinds of documentation and proof of earnings you may be required to present to a finance company in order to get your loan approved.
Credit history checks
Being accepted for any type of finance agreement is always more difficult if you have a poor credit history. This is because it means you’re considered to be higher risk. If you have a bad credit rating, a finance provider is more likely to wish to contact your place of employment in order to verify your earnings.
Car buyers who benefit from good to excellent credit scores are less likely to have their employers contacted to confirm their earnings.
You can improve your credit score before attempting to obtain credit in a number of ways, for example by ensuring your name is on the electoral register, making payments on any outstanding debts in full and on time, setting up direct debits, and using prepaid credit cards.
Finance deals for used cars that are lower in price are less likely to warrant a call to an employer than a new vehicle of a higher value.
Car buyers who can put down a deposit towards their purchase are less likely to be employment checked by car dealers and finance companies. Having a decent deposit can also secure you improved interest rates.
If possible, before applying for finance, try to save a sum of money for a deposit. Even a modest amount such as £500 could make a noticeable difference to what your application involves and who is contacted for information.
Documentation when applying for car finance
Prior to making any application for car finance, the first thing you need to do is gather together all the information you will need.
Typically, this will include a valid UK driving licence, proof of address (ideally a residence you’ve lived at for three or more years) and proof of your income.
Regardless of whether the finance company contacts your employer, they will want to see evidence of your earnings. This could be asked for in the form of copies of your payslips or bank statements that clearly show your income on a monthly basis.
If your income shows that you can afford the amount you will repay per month with ease, there might be less chance of them calling your employer.
Affordability calculators online
You can work out your affordability before even applying with innovative tools like our online calculator. In just a few minutes, you can estimate your eligibility for car finance by entering some simple information into the required fields. Add how much you would like to borrow, the length of term you wish to make your repayments over, and how much you can afford to pay in installments each month.
Important information close at hand
As experts in the auto industry, at Car.co.uk it’s our ambition to offer a premium resource for car buyers on all aspects of vehicle finance. If you’re concerned about your current eligibility for car finance, you can contact our specialist team for advice to put your mind at ease.