The 5 (Maybe 6) Essentials of Auto Financing

Gather these key documents, and you’ll be ready to roll when it comes time to sign.

Essentials of Auto FinancingCapital One

Originally published on January 30, 2018

When you pack for a trip, you may spend a few hours deciding what to bring: favorite cocktail dress and strappy shoes, yes! Plaid cardigan and cargo shorts: um, no. But socks and a toothbrush: you don’t leave home without ’em.

The same applies to your car-financing journey. Take your time finding the right vehicle, at the right price, with the best interest rate. When you’re ready to buy, just make sure you have these essential documents needed for a car loan.

Driver’s license

This one’s a no-brainer; you can’t drive that sweet new ride off the lot without a valid driver's license, and your photo and signature on the license will also help prove you are who you say you are.

Proof of income

Direct deposit is a beautiful thing, but if you haven’t held a pay stub in your hands in the last decade, now’s the time. Print out a paycheck from within the past 45 days (some lenders prefer the last month), and make sure it includes year-to-date pay. If you’re self-employed, dig up your past three months of personal bank statements.

Proof of residence

A recent mortgage statement or utility bill will do the trick. Some lenders will accept other forms of personalized mail, but probably not your latest copy of People Magazine.

Proof of insurance

Contact your insurance company and let them know you’re buying a new vehicle. Some policies extend temporary coverage (7 to 30 days) for new cars, and you’ll simply show your current insurance card to the dealer. But it’s best to talk to your agent before you’re at the dealership, and find out if (and how much) your premiums will change for the new vehicle. That way you can shop around for coverage if necessary.

Title and registration (if you're trading in a vehicle)

The dealership can’t take possession of your old vehicle without your current registration and title, aka “pink slip.” Car titles got that nickname in the 1950s because California car titles were pink. The term was popularized in the movie “Grease,” when Danny and one of his rivals raced for “pinks,” or ownership papers. Nowadays, car titles come in all colors – pink, blue, green, yellow, even teal. Before you take your soon-to-be-former car to the dealership, though, read up on these helpful trade-in tips.

Prequalification letter (if applicable)

Finally, if you choose to prequalify for financing with Capital One’s Auto Navigator, bring your offer summary to the participating dealership, so they can help you find the car you’re interested in.

Rounding up these documents may seem like a chore. But remember, all of life’s great journeys go smoother when you’ve packed a toothbrush and a full supply of socks.

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Rick Press
After a long career as an editor for a major metropolitan newspaper and website, in 2017 I joined Capital One as its Managing Editor for Auto Content. I’ve been fortunate to cover everything from breaking news and Super Bowls to CEOs and celebrities, and now I am excited to explore the connection we all have to our cars and help consumers navigate the car-buying journey. Let’s ride!