I’m self-employed. Will I get a car loan?

24 Dec

As a business owner, you actually have many more options in terms of car and auto financing. There is in fact a range of products that can suit your situation and your cash flow. At Savvy, we understand the needs of the self-employed and the frustrations they face. That’s why Savvy offers independent workers various options for consumer credit and business credit.

Consumer loan options

Consumer loan options

This option is for people who use the car for personal purposes. A consumer loan is what is commonly called a “car loan”. These loans are governed by the Consumer Credit Protection Act (NCCPA). This law protects consumers who apply for credit by clearly specifying the obligations and rights of lenders and borrowers.

Before being approved, you will need to provide financial statements proving that you can repay the loan. These may include (but are not limited to) personal income tax returns and business returns for the past two years. They will also generally ask for bank or financial statements to assess your eligibility.

Business Loan Options

Business Loan Options

If you intend to use your vehicle for business purposes (more than 50% of the time), you can consider a range of alternative loans. Choose between a chattel mortgage, a lease or a commercial purchase. Please note that these loans are NOT covered by the NCCPA.

A chattel mortgage works the same way as a “traditional mortgage” and looks like an unsecured car loan. You benefit from lower interest rates, more flexible terms, and you can claim GST, depreciation and interest on your Business Activity Statements (BAS). You can also opt for lump sum payments at the end of a mortgage to reduce your regular repayments.

Financing leases and commercial leasing purchases are similar, but the financier retains ownership of the car until the loan is repaid or until the end of your lease term.

In some cases, you may not have to provide proof of income as indicated above. Please note that some lenders may require you to raise funds in your intended purchase through a cash deposit or an exchange.

We are advised with independent auto financing

We are advised with independent auto financing

Savvy Finance has access to the best Australian lenders with the most competitive loans for freelancers in the market.

Talk to one of our finance professionals for more information. They will guide you through the process and help you determine whether a consumer or business loan option is right for you. You’ll do better with Savvy on your side.

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