Being self-employed means your income may be more unpredictable in comparison to those that work for a business or organisation. This, in turn, can impact your financing options, as some loan types available for self-employed car finance can be harder to secure. There are still a number of ways that you can secure financing solutions based on your employment type however, and Fido Finance are here to assist in getting you on the road through great rates and tailored services.
The loan broker team at Fido Finance work with you from start to finish. Give us a call on 13 FIDO or access our How it Works page to learn more.
Your Options for a Self-Employed Car Loan
There are several options when it comes to securing car finance while self-employed, each offering their own benefits based on your situation and what the vehicle will be used for.
Consumer Loan
If the car is going to be used for personal use, then a consumer loan is the easiest and most conventional way to finance your new vehicle. As part of the process, you will need to provide documentation that includes proof of your identity and bank statements that demonstrate you will be able to pay the loan back, and on time.
Using a consumer loan means the loan will be secured against the vehicle, giving the lender the right to repossess the car if you fall behind or default on payments.
Business Loan
The opposite of a consumer loan, business loans are meant for purchasing vehicles that will be predominantly used for business purposes. Whether you are a sole trader that requires a work vehicle, or you simply need an extra vehicle for sales and meetings, a business loan is the best way to secure a self-employed car loan for work.
Good to know: the interest associated with a business loan is also tax-deductible, making it a more desirable choice for those requiring a business vehicle.
Low Doc
When you are self-employed, there is a good chance you don’t possess some of the paperwork required for a traditional loan. Low doc finance is designed to help you secure self-employed car finance despite some of the differing requirements, making it highly beneficial for sole traders.
Something to take into consideration are the rates associated with low doc finance. Due to it being viewed as a higher risk loan, the rates that come with this financing option can oftentimes be higher in comparison to other loan types.
Other Factors to Consider
Before applying for a self-employed car loan, you will need to collate the relevant documentation in line with your employment type. This will include proof of income, as the lender needs to know you can make your repayments before approval is considered.
Proof of income is in the form of tax returns for the latest financial year, as well as any financial statements you have access to. Further documentation may be required based on your lender, such as statements of assets and liabilities.
Whether the vehicle will be used for commercial, or business purposes is the biggest factor that will influence the type of loan you pursue, and its use should be decided before you begin applying. With this sorted, you can more accurately determine the best finance option for your financial, personal, and business position.
Let Fido Finance Help
At Fido Finance, we believe everyone deserves access to high quality car loans to improve their personal and business lives. Even as a sole trader with limited access to general financial documentation, our services stand to pair you with the best avenue available to get your hands on the vehicle you require.
We understand that every client is unique, which is why we personalise our services to support you in reaching your financing goals. You don’t need to apply for financing yourself, as our award-winning team stand alongside you every step of the way. That’s also the reason behind Fido Finance being awarded Productreview.com.au’s first place in the “Car Loan” category in both 2023 & 2024, based on our customer reviews!
Apply Today!
As man’s best friend, we fetch market leading deals on your behalf so you can reap the rewards. Visit our How it Works page to learn more about our vehicle finance loans or give us a call on 13 FIDO to get started.
