Frequently asked questions about the car finance we provide to Armed Forces personnel
I’ve just joined and I’m on NERP (New Entrant Rate of Pay)
For about 6-9 months after you join, you will normally be in NERP status. You can still apply, but we will need to know as some lenders will not process your application until you are on pay grade 1. It’s easy to tell as you will normally get just under £1000 take home per month on NERP, and usually around £1200+ as soon as you move up to pay grade 1. You can also see it on your payslip if you need to check. Lenders do check this at pay out stage so it’s important to get this right at the beginning.
What documents will I need to finance a car?
Our lenders vary in what they require from you but as a rule of thumb we usually require proof of ID (driving licence, passport, MOD 90 etc), proof of income (wage slips or bank statements) and potentially a proof of address (utility bill). We will always make it very clear what we require and confirm this, along with some helpful guidance, in an email.
Do I need to have a Full UK Driving Licence?
The vast majority of our lenders will require you, or a joint applicant on your application, to hold a full UK Driving Licence however we do have lenders that will consider Provisional, EU and International Driving Licences as well on a case-by-case basis. We can use MOD issued Pass Reports in lieu of your licence if you have recently passed with the Military.
Who owns the vehicle on finance?
This depends on the nature of your agreement; for purchase agreements like Hire Purchase (HP) and Personal Contract Purchase (PCP) the lender owns the vehicle until your agreement is settled in full and if applicable, the option to purchase fee, is paid. For Personal Loan agreements the title to the vehicle is always retained by you and you own the vehicle immediately after paying for it.
Can I settle the finance deal early?
Yes, and you are covered by CCD Regulations (Consumer Credit Directive). This means that you will have a reduction in interest as monies paid back early no longer accrue interest so you will save money from the original figures on the document you signed. If you settle the full amount early, the lender will deduct the interest for the remaining term and produce a Settlement Figure. This is what you will need to pay to settle the agreement fully and is accurate usually until your next payment date, and this figure will be considerably less than the total of the payments you still owe. The lender can charge up to one months interest as an early settlement fee, but this is usually much less than the discount you get for settling early, so well worth your while doing. If you pay a part, or full payment in excess of £8,000 in any calendar year, the lender has the right to charge an additional 1% fee, or 0.5% fee if you are in the last 12 months of the agreement. All of the above mentioned fees are very small in comparison to the savings you make settling early, so if you are able to, you should take advantage of the option to do so.
Do I need to pay a deposit?
Not always, but deposits are usually very small if one is required for your application, and in most cases £99 is sufficient to reserve a vehicle. Sometimes lenders will require a larger deposit as a condition of the loan but this is on a case by case basis and it is not often required. The most common reason is that there is a better deal available with a deposit and we would always offer you this option if we can get a lower interest rate with a deposit, although there is usually another lender that would assist without the deposit, but it can be a little bit higher interest rate wise. One of the team will always offer you all the available options and you can decide which suits you best.
How long will the application process take start to finish?
Some customers apply in the morning, and collect their car the same day. Usually people will collect within a day or two of the initial application, equally some customers are not able to collect for a period of time. It is tailored to your circumstances and we will always provide adequate explanation if there is a delay our side.
I have seen a car at a specific dealer, can I still get finance through you?
In most cases yes. The dealer needs to have the correct licence to process finance sales, most dealers do have this, and they will need to be happy to receive funds from us, again, most dealers are more than happy to do this. We cannot fund private sales, or from dealers who are not licenced properly unless you qualify for a personal loan with us.
I have seen a car at another dealer, can I still get finance through you?
In most cases yes. The dealer needs to have the correct licence to process finance sales, most dealers do have this, and they will need to be happy to receive funds from us, again, most dealers are more than happy to do this. We cannot fund private sales, or from dealers who are not licenced properly.
What length finance terms can you provide?
This is not an exact answer as each lender has their own terms but in the vast majority of cases, 2 years is the minimum term, and 5 years is the maximum.
I’m currently posted overseas, can I apply?
Yes, we take many applications from people who are everywhere from Canada to Cyprus. We only finance cars that are UK registered or tax free, but once purchased it is often OK to use it to drive to Germany etc should you require. We need to know what your intentions are when you apply as each lender has different rules and we need to set your agreement up to suit you.
I only have a barracks address, is this a problem?
This should not be a problem and it is exactly the type of issue we are here to help with, so don’t worry if you only have a barracks or BFPO address, we can still usually help.
What range of interest rates do you offer?
We are a broker, so it is the lender we place your application with that sets the rate, not us. You pay less if your credit history is good, and more if your credit history is not so good. We will always offer you the lowest rate available to you, this is a legal requirement. You can get a gauge of what to expect by searching any car, and then scrolling to the bottom of the page where there is a calculator and descriptions of circumstances that are likely to match the rate you pay. If you read the description and select the one that sound most similar to your own circumstances, this will give you a rough guide of what to expect as a monthly payment based on your credit history and the amount you want to borrow.
Will you take my current car in part exchange?
Yes, we can talk to you about this in more detail when you apply, but many people do part exchange as part, or full deposit.