How Long Does Getting Car Finance Take?
Discover how long the entire car finance process takes, from initial application to vehicle acquisition and final repayment.
Car finance involves various stages, from initial application to loan repayment. Understanding these timeframes helps individuals navigate the process effectively and prepare for financial commitments. The journey includes gathering information, lender review and approval, fund disbursement for vehicle acquisition, and loan repayment.
Information Needed for Your Application
Gathering specific documents is necessary before submitting a car finance application. Lenders require personal identification, such as a driver’s license or passport. Proof of income and employment, typically pay stubs, W-2s, or tax returns, is also required. For self-employed individuals, two years of income tax returns or bank statements showing consistent deposits may be requested.
Lenders also need proof of residence, including utility bills, mortgage statements, or bank statements. Vehicle information, if a specific car has been chosen, such as its make, model, year, and Vehicle Identification Number (VIN), is a common requirement. Details about your credit and financial history, including your Social Security number, are used to evaluate creditworthiness. Gathering these documents can take a few hours to several days, depending on your organization and access to information.
The Application and Approval Timeline
After compiling all necessary information, submitting the car finance application begins the lender’s review. Approval or denial can vary significantly, from minutes to several business days. Online applications may result in instant pre-approval, especially for applicants with strong credit profiles and stable incomes. Many lenders, including banks and credit unions, can provide same-day approval if the application is complete and the applicant’s credit is robust.
Factors influencing this timeline include the application’s completeness and accuracy; errors or missing information cause delays. An applicant’s credit score and history play a significant role, with higher scores often leading to quicker approvals and more favorable terms. The lender’s internal processes and whether additional verification is needed also affect approval speed. If credit issues or more documentation are required, approval could extend to several days or a week.
Funding and Vehicle Acquisition
After car finance approval, the next stages involve finalizing the loan agreement and acquiring the vehicle. This process typically includes signing loan documents and any final verification checks by the lender. Funds may be disbursed directly to the dealership or, in some cases, to the borrower. Fund disbursement usually ranges from one to three business days after full approval.
Variations depend on the lender type. Dealerships may finalize loans faster than traditional financial institutions, though banks and credit unions also offer quick processing. Vehicle availability and state-specific title transfer regulations also influence the time until the car is in the buyer’s possession. Generally, the entire process from approval to driving the car off the lot takes a few days, but can occur on the same day.
Understanding the Loan Repayment Term
Beyond the initial financing process, understanding the loan repayment term is important. The loan term refers to the duration over which the borrowed amount, plus interest, will be repaid. Common car finance terms range from 24 to 84 months, with some lenders offering terms up to 96 months. According to Experian, the average auto loan term for new cars was approximately 68.6 months in the first quarter of 2025, and for used cars, it was around 67.2 months.
The loan term choice directly impacts monthly payments and total interest paid. A shorter loan term generally results in higher monthly payments but less total interest. A longer term lowers monthly payments but increases the overall interest cost. For example, a $35,000 loan at 9% APR over 60 months might have a monthly payment of $727 and total interest of $8,593. The same loan over 84 months could be $563 monthly with $12,302 in total interest. While longer terms make monthly payments more affordable, they can also lead to owing more than the car is worth due to depreciation.