Car finance affordability checks

Yorkshiregirl1986

Has anyone had to do affordability check via open banking for car finance?? (PCP) I have had 2 cars with Arnold Clark for a period of 6 years in total not missed one payment.

Have recently been in to change my PCP vehicle carrying some equity over which they said was fine and we stuck to a budget to suit this as we desperately need a bigger car as circumstances have changed.

Awaiting a decision now from Toyota finance assume this is normal procedure now? I have bought a house in the last year so the dealership said check of address and earnings etc. never had this before or any trouble with car finance…

CliveOfIndia

Whenever you take out a loan for any purpose, all lenders should be performing an affordability check.  If they don't, they're opening themselves up to claims of irresponsible lending.  It's perfectly normal - and eminently sensible, both for them and for you - for checks to be performed.

Bigwheels1111

I could afford to buy a 50k or 100k car. In cash.
I would never pass the checks.
I only earn £76.75 a week.
Funny old world.

Nasqueron

Bigwheels1111 said:

I could afford to buy a 50k or 100k car. In cash.
I would never pass the checks.
I only earn £76.75 a week.
Funny old world.

The logic behind that would be that if you took out finance based on your savings as the backup, you could spend the savings the next day and they'd be on the hook for it - hence earnings only, savings are ignored (albeit technically you can earn interest on them which could be income)

Bigwheels1111

Nasqueron said:

Bigwheels1111 said:

I could afford to buy a 50k or 100k car. In cash.
I would never pass the checks.
I only earn £76.75 a week.
Funny old world.

The logic behind that would be that if you took out finance based on your savings as the backup, you could spend the savings the next day and they'd be on the hook for it - hence earnings only, savings are ignored (albeit technically you can earn interest on them which could be income)

Thats the joke, my income from savings this year means I need to file a self assessment return as over 10k.

CliveOfIndia

Bigwheels1111 said:

Thats the joke, my income from savings this year means I need to file a self assessment return as over 10k.

But from a lender's perspective, you could go out tomorrow and buy yourself a Rolls Royce, a couple of Ferraris and a luxury world cruise.  Or nip over to Las Vegas, join the high-rollers club and blow the lot in a matter of a few hours.

Of course, a sensible person such as yourself would probably choose to keep it somewhere safe and live off the interest.  But there's nothing to actually stop you from blowing the lot tomorrow if you wanted.  It's for this reason that savings are never taken into account by any lender.