How to Get a Car Loan When You’re Self Employed

By Alexi Falson on 18 Nov 2022
image for How to Get a Car Loan When You’re Self Employed The changing nature of digital economies and a post-Covid world means that the number of self employed Australians has grown at a tremendous rate.

Unfortunately, though, there can be some added headaches when it comes to self-employed Australians who lack traditional payslips that make a typical application a smooth process.

Thankfully, though, lenders have responded in kind with a growing number of finance options for self employed Australians looking at the best possible deal for a car loan.

As you’ll discover, the fact that you’re not receiving a full-time or consistent wage like someone employed full-time doesn’t mean you can’t get a car loan, you just need to be aware of a few things that we’ll be breaking down today.

How to Get a Car Loan When You’re Self Employed

There are a number of ways to get a car loan when you’re self-employed, but it’s important to note that some are more tailored to certain industries and working arrangements than others.

What are Your Options?

  • Consumer Loans

  • Chattel Mortgage Car Loans

  • Low Doc Car Loans

Consumer Loan Options

If you’re looking for a vehicle that can be used for both business and personal use, a consumer loan is one of the best ways to get a car loan when you’re a self-employed Australian.

Significantly, these consumer loans are regulated by the National Consumer Credit Protection Act (NCCP) which maps out the requirement for responsible lending terms and gives you certain protections as a borrower.

This means that you will need to provide a substantial amount of documentation to prove that you’re able to meet your payment schedules, however, these car loans often feature adjustable balloon payments toward the end of the term that reduce your month-to-month payments.

Those looking at their best options for a consumer loan should consider things like their credit score and the inherent benefits and risks of a secured car loan versus an unsecured car loan.

Low Doc Car Loans

Low doc car loans are a popular avenue for self-employed workers that allows those with an Australian Business Number (ABN) to purchase a vehicle primarily for business purposes.

Most notably, a low-doc car loan requires very little documentation of your business activities compared to a more typical loan agreement. This means there can be certain tradeoffs when it comes to competitive interest rates and flexible terms for borrowers, because these types of loans are riskier for lenders.

Chattel Mortgage Car Loans

If the vehicle is being used primarily for business purposes, a Chattel-type mortgage is another attractive option for borrowers.

A Chattel mortgage uses the traditional structure of a mortgage that you’d find on a house, but allows you to own the vehicle outright from the start of the agreement. This means you can use the vehicle as an asset on your balance sheet right away.

This also allows you to claim GST and depreciation of the vehicle on your business activity statements, if you’re using the vehicle at least 50 per cent of the time for business activities.

These loans are, however, not protected by the NCCP which means that self-employed Australians don’t enjoy the same set of protections as general consumers, which is something to keep in mind before applying for a car loan.

What are the Requirements to Get a Car Loan When You’re Self Employed?

  • Name, Age, Citizenship and number of dependents

  • Proof of income

  • Financial statements

  • Proof of existing assets and liabilities

  • Tax Returns, Superannuation and shareholdings

  • Any existing loans you hold

  • Information on the vehicle and your insurance costs

Factors to Consider

  • While consumer loans require more documentation, they are protected by the NCCP

  • Low-doc loans offer flexibility at the expense of higher rates and less flexible terms

  • Chattel and low doc mortgages are not covered by NCCP

  • Chattel mortgages are primarily for business use only, at least 50% or more

How to Apply

  • Find the right car for you and your business

  • Talk to a financial advisor or broker about your best car loan options

  • Contact lenders for their best available rates & terms

  • Consider a vehicle trade-in, cash deposit or any equity for better terms

  • Map out your expenses over time to ensure you can afford the vehicle

  • Prepare documentation and apply for a car loan

How Long Do You Have to Be Self-Employed to Get a Car Loan?

While lenders will assess your loan application on a case-by-case basis, it’s best to submit your documents with financial information including your tax returns and financial statements reaching anywhere from 12-to-36 months previous.

This gives the lender a clear picture of your financial position, and how well suited you are to a car loan.

Alternatively, some other types of vehicle finance require very little in the way of documentation, meaning you can be self-employed for just a small span of time and still be eligible for a car loan.

Can I Get a Car Loan Without Showing Proof of Income?

While it is indeed possible to get a car loan without showing any proof of income, you will only find this in the form of a low-doc loan which can often prove costly in the long-term as they typically feature higher interest rates and less-flexible terms, as well as maintaining ownership over the vehicle.

While consumer loans require you to provide more proof of income while applying, they also afford the borrower a range of protections and even outright ownership of the vehicle once payments begin.

Request a Quote

If you’re nearing the next phase of your car-buying journey, make sure you get in touch with us for a quick, free and no-obligation quote on your dream car; we can also help discuss your best options for vehicle financing.


Alexi Falson

Alexi is an automotive journalist and road tester hailing from Byron Bay. He has an affection for both cars and motorbikes, a great admiration for the simplicity of old-school engineering, and a fascination of new technology making its way to modern cars. When he's not road testing, you'll find him surfing, hiking or helping people find their dream cars.

Have any questions? Call us on 1300 719 925

car icon
close sticky hub button


Maximum of 3 vehicles