In today’s fast-paced business world, staying ahead often means having the right tools at your disposal. For ABN (Australian Business Number) holders, one such tool is car finance as a contractor. Auto Now Credit offers you the chance to rev up your business with flexible and affordable car finance solutions. Here, we’ll dive into the details of car finance tailored for contractors and how it can help your business grow.
How Does Car Finance as a Contractor Work?
Car finance as a contractor is a secured vehicle finance option tailored specifically for ABN holders. Whether you’re a sole trader or a business owner, this type of finance can provide the flexibility you need. Auto Now Credit understands that businesses come in various shapes and sizes, so they offer a low-doc application option, ideal for businesses with irregular income and cash flow.
Statistics reveal that purchasing a vehicle is the most common reason businesses seek financial assistance, accounting for 38% of all loan requests. Car finance as a contractor functions similarly to standard car loans or chattel mortgages, but with a key difference: specialized lenders and brokers assist contractors, even when traditional banks might decline their applications.
What You Can Get with Car Finance as a Contractor
Auto Now Credit’s car finance for contractors comes with a host of benefits, including:
- Borrow up to $500,000.
- Loan terms ranging from 1 to 7 years.
- Finance for new or used vehicles.
- The option to include a balloon payment, reducing regular repayments.
- Available for both dealer and private sale purchases.
- Flexible repayment options tailored to match your business cash flow.
- No deposit required, though you can opt for one to reduce your finance costs.
- The possibility of early loan repayment, with potential fees depending on the lender.
Am I Eligible for Car Finance as a Contractor?
Eligibility for car finance as a contractor varies by lender, but here are the main requirements for most lenders:
- You must be an Australian citizen or permanent resident.
- You must hold an ABN.
- Your business must be GST-registered.
- Typically, your business should have been trading for at least 6-12 months.
- You must demonstrate that your business revenue is sufficient to service the loan repayments.
- You should use the vehicle for at least 50% business purposes.
How to Apply for Car Finance as a Contractor
Here’s a step-by-step guide to applying for car finance as a contractor:
- Compare loan options from different lenders, considering interest rates, fees, features, and eligibility criteria.
- Gather the necessary documents, including personal identification (such as a driver’s license) and proof of business revenue (like business activity statements or contracts).
- Submit your loan application online through your chosen lender’s portal, or let a broker handle it on your behalf.
- Consider obtaining conditional approval, which can help you set a budget for your vehicle purchase.
- Provide vehicle details and a tax invoice confirming the purchase price.
- Once your chosen vehicle meets the lender’s criteria, your loan will be funded, usually with a direct transfer of funds to the seller.
Interest Rates on Car Finance as a Contractor
Interest rates on car finance as a contractor typically start from around 7.5% p.a. These rates are more favourable for well-established contractors with a track record of strong and stable business revenue. Factors that influence the interest rate offered include the duration of your business’s operation, the type and age of the vehicle, your revenue, assets, liabilities, homeownership, and whether it’s a dealer or private sale.
How Much Can You Borrow?
The maximum loan amount for car finance as a contractor depends on several factors, similar to those affecting the interest rate. Less risky borrowers can access higher amounts, but the emphasis is on your business’s income, as it signals your ability to repay. This is often referred to as serviceability.
Repaying Your Car Finance Early
Auto Now Credit’s car finance as a contractor typically allows for early repayments, but watch out for early payout fees. In some cases, the savings on interest and regular loan fees may be offset by substantial penalty fees. Securing car finance with no penalty for early repayment can lead to significant savings for your business in the long run.
In conclusion, car finance as a contractor from Auto Now Credit can be the key to accelerating your business’s success. With flexible terms, competitive rates, and a commitment to helping businesses of all sizes, Auto Now Credit is your trusted partner in business growth.
Low Doc Car Loan
If you don’t earn a regular income or know you’ll find it tough to produce documents proving two years’ worth of stable income, a low doc car loan could be a good option for you. These loans require less documentation than usual, making them accessible to self-employed individuals. However, low doc car loans often come with higher interest rates because they are considered riskier for the lender. Before applying, it’s a good idea to use a car loan calculator to find out how much you’d be expected to repay each month and how much you can reasonably afford to borrow.
Do You Qualify for a Low Doc Car Loan?
- Australian permanent resident (some visa holders are also permitted)
- Over the age of 18
- Earn at least $25,000 per year
- Hold a valid driver’s license (provisional or full)
- Hold an ABN if self-employed
Considerations When Comparing Low Doc Car Loans
When you’re comparing low doc car loans, make sure you understand the loan features, including:
- Interest rates: Is the rate fixed or variable?
- Hidden fees: Does the loan have upfront and ongoing service fees, or charges for making additional repayments down the track?
- The loan amount and terms: Car loans generally range from $3,000 to $100,000, to be prepaid over a period of one to seven years.
- Loan restrictions: Low doc loans often have stricter lending criteria. Make sure the loan offers the flexibility to suit your situation.
In conclusion, being a contractor or self-employed doesn’t necessarily bar you from getting a car loan in Australia. By demonstrating a stable income, improving your credit score, considering alternative loan types, and exploring low doc car loans, you can increase your chances of hitting the road with a new set of wheels.
