Self-employed car loans

Self-employed car loans may appear more difficult to obtain from the outset, but there are more options available than you may think. What you need to establish first is whether the vehicle will be used for business purposes and if so what proportion as a percentage, do you estimate will be for business use. The lending team at Dynamoney has outlined everything you need to know when applying for self-employed car loans, including the best car finance options.

How to apply for car finance if you’re self employed

Firstly, you need to decide whether you are going to apply for a car loan on behalf of your business, or as an individual. This decision will determine what information you will need to supply to your chosen lender and will largely depend on the intended usage of the vehicle. If you intend to use the vehicle predominantly for business purposes e.g., 50% or more, it would be in your best interest to apply for a business car loan, as this will open up a variety of financing options including chattel mortgage, finance lease, commercial hire purchase and secured business car loans. If on the other hand, you intend to solely use the vehicle for personal use, a consumer car loan may be the better way to go.

Once you have decided on the best option for your personal circumstances, the process for applying for self-employed car loans is the same as any other car finance loan application.

  1. All lenders will require you to fill out an application form which will ask for basic information, including name, address, phone number, email, business name, ABN and how many years you have been in business (if you opt to apply on behalf of your business) and your credit score if you know what it is.
  2. Once your application has been reviewed, the lender will complete a formal credit check. Normally this process is relatively instant when completed online. However, it also is subject to how long it takes you to provide the necessary identification points.
  3. Depending on your credit worthiness/score you may receive conditional car finance approval at this stage of the application process. If a bad credit score is returned, your application may either be declined, or additional documentation may be requested.
  4. If your application is approved, the last stage is finalising your new loan and taking ownership of your new vehicle.

Car finance options for self-employed people

No doc or low doc car loans

No doc and low doc car loans are ideal for self-employed people who may or may not have a regular pay cheque. In a lot of cases, those who are Self-employed generally use a vehicle for both personal and business use, which no doc and low doc car loans allow. Typically, these car loans have higher interest rates and fees to cover the additional risk the lender is taking by lending you money with limited documentation shown to prove income. They can also often be more restricted in their terms, such as the loan length, loan size and the ability to make extra repayments.

Consumer car loan or Business car loan

If the predominant usage of the car will be for personal use, then you would apply for a consumer car loan. However, in instances where you intend to use the car for business purposes and claim a percentage of the usage for business, then you would apply for a business car loan. With both options, you can have secured and unsecured car loans. With a secured car loan, the car is held as security over the loan.

Chattel mortgage

If you are using the car predominantly for business use, then a chattel mortgage loan is another consideration. With this type of loan, the lender lends the money to purchase the vehicle and you as the borrower pay back the loan via set repayments over the life of the loan.

The difference with this type of loan is that whilst you own the car outright, the lender places a mortgage over the vehicle, as security for the loan. The mortgage is removed once the loan and any residual/balloon payments have been paid in full.

If your loan includes a balloon payment you do have the option to refinance that amount or to trade the car in. The benefits of a chattel mortgage include more flexible terms, lower interest rates and the ability to claim GST, interest and depreciation.

Car lease

A car lease is designed specifically for instances where the car is mainly being used for business purposes. Effectively, it operates as a long-term rental whereby the lender purchases the car on your behalf and leases it back to you for an agreed fee, paid monthly.

At the end of the lease period, you can choose to pay the final lump sum to purchase the car, restart another lease, or trade the vehicle in.

Hire purchase

Similar to a car lease, you hire the car from the financing company that has purchased it on your behalf. You don’t own the car with a hire purchase, but you do have full use of the car over the term of the agreement.

Usually, one to five years in length, once the price of the car and the interest has been paid in full, ownership of the car transfers to you. A hire purchase can be worth considering if you are registered for GST on an accruals or cash accounting basis and are using the car for business purposes.

GST is only charged on the fees and interest, not the monthly rental payment. With this type of loan, you may be able to claim the GST on the total price of the car, the interest and any fees.

What are the minimum requirements to apply for car finance when self-employed?

To be eligible to apply for self-employed car loans you must be an Australian citizen or permanent resident aged 18 years or older. As with any car loan application, the finance company will need to complete a formal credit check to determine your credit score. At Dynamoney, we require the below information regardless of if you are applying for a consumer or business car loan.


  • 100 points of identification must be supplied before a car loan request can be processed. This can include:
  • Your driver’s license, passport, birth certificate or Medicare card
  • Secondary forms of identification such as Bank or Utility statements.

Vehicle details

  • Car make, model, colour and year
  • Registration number and Vehicle Identification Number (VIN)
  • Purchase price
  • Proof of insurance or cover note

If you’re applying as an individual, we also require the following information:

  • Proof of income
  • Access to bank statements

For self-employed business owners applying for a business car loan, the following information is required:

  • Your registered ABN number
  • You need to have been trading in business for a minimum of 12 months
  • You must be GST registered
  • Your regular expenses and liabilities
  • Financial statements including your individual tax returns and company statements including profit and loss

Are there any car loan restrictions for self-employed people?

This will be dependent on the terms and conditions of the self-employed car loan you are applying for and your selected lender. Sometimes the ability to make additional car repayments against your loan may be restricted, or you might have a maximum number of extra repayments allowed or a maximum dollar amount per extra repayment. In some cases, there might also be additional fees and charges imposed for any additional payment made. Low doc loans can also come with greater restrictions than a regular loan. For example, you might not be able to make additional repayments and you might only be able to use the loan amount to fund the purchase of the vehicle only and no optional extras.

How to improve your chance of getting approved for a self-employed car loan

Consider if you can afford the loan

It is important to consider if you can actually afford the loan, especially if you are choosing a low doc option and are self-employed. You need to make sure you have the budget and means to pay back the loan as if you default on the loan, it will put your business and its assets potentially at risk of being seized.

Make sure your financials are up to date

Ensure your financial records and business income and transactions are clear, up-to-date and concise. The lender will require this information to determine your ability to pay back a loan. The more detailed information you provide, the easier the application and approval process will be.

Frequently asked questions

Can I use my ABN to purchase a car?

If you have an ABN and you are registered for GST, you can claim a GST credit for the amount of GST that is included in the price of your chosen vehicle.

I’m self-employed and struggling to prove my income for car finance. Are there alternative options available?

If you are struggling to prove your income, increasing your deposit or having a guarantor who assumes joint responsibility to repay your loan can help.

What type of vehicles can I get financed for if I’m self employed

Self-employed car loans can be obtained for a wide range of vehicles including cars, utes, trucks, trailers, yellow goods, farming and earth moving equipment.

Will you refinance me out of my existing self-employed car loan?

We also specialise in end of term finance for self-employed business owners. We can provide competitive loan options for the exact purpose of refinancing an end of term balloon payment.

Do you provide low doc business finance loans for the self-employed?

Yes, we do. If you own property and have no prior defaults, you are eligible to apply for a low doc loan. No financials are required, and approval is instant.

What brands can I obtain a self-employed car loan for?

We finance all major brands including Kia, Mazda, Ford, Hyundai, Honda, BMW, Suzuki, Isuzu and Mitsubishi.

To find out more about our self-employed car loans, contact the team at Dynamoney today.


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