Invoice

Meaning and Definition

An invoice is a document provided by a seller to a buyer that itemizes the products or services purchased, along with their respective costs, quantities, and any applicable taxes or fees. In the context of car finance, an invoice typically refers to the purchase invoice issued by the dealership or seller for the vehicle being financed.

Why it is important to know

Invoices are essential documents in car finance as they provide a detailed breakdown of the purchase price and associated costs, serving as evidence of the transaction. For lenders, invoices help validate the value of the vehicle being financed and determine the loan amount. For borrowers, invoices provide transparency regarding the costs of the vehicle and ensure that the financing aligns with the purchase price.

Example in car finance

When purchasing a vehicle through car finance, the dealership or seller provides an invoice detailing the price of the vehicle, any additional fees or charges, and taxes applicable to the purchase. The borrower can review the invoice to understand the total cost of the vehicle and use it as supporting documentation for the financing application. Lenders may also refer to the invoice to validate the vehicle's value and determine the loan amount and terms.