Will new lender see car finance paid off?

Grecian123

I was in a car accident a few weeks back and my car was deemed a write off. The insurance company are paying off the remaining finance.

I am on the hunt for a replacement car and with this I am looking to take out a new finance deal (the savings I have are for my wedding). On credit files I know it will take a while to show the old finance has been paid off, however, will prospective lenders be able to see it has been paid if I were to apply for the finance a few days after it was cleared. I don’t want it to look like I am applying for finance on top of another car finance scheme, even though it has been paid off but not reflected on credit report yet.

CliveOfIndia

It depends on the lender's reporting cycle.  Some will send their reports in to the CRAs weekly, some fortnightly, some monthly, or potentially any other frequency (I think probably monthly tends to be the most common).  There will also be a slight lag whilst the CRAs process the data feeds they receive.

So the answer to your question is "it depends".  It's quite likely that the finance will still show on your report for "a few days" after it's been cleared, until the lender has sent in their data feed and the CRA has processed it.  But as soon as it has been processed, other lenders will see it as cleared - which may be a few days after it's actually been cleared, lenders can only go by what the CRA data shows them.

Do bear in mind also that the free report you see is not real-time, unlike the paid version that a lender uses.  So even when it is confirmed as cleared, it may still appear as outstanding to you for a week or two.

mab3000

As above, it depends on when the finance company reports to the CRA’s. 

It might not be an issue however if your current car finance is still showing as unsettled on your credit file. Each lender has their own criteria, they may request proof of settlement of your existing finance as a condition of acceptance. They may assess the affordability and approve the application based on having your current and new agreement running at the same time.