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Can You Get Car Finance While Self-Employed?


Being self-employed brings many perks, including the freedom to work your own hours and be your own boss. But can also affect you when you apply for credit, and if you want to apply for car finance, your self-employed status can sometimes get in the way.

But that doesn’t mean you cannot get car finance. It may simply mean that you have to look a bit harder.

Start Searching for a Specialist

The best thing you can do to get your search off to a good start is to find a specialist lender. There are many types of car finance lenders out there, and some will specialise in providing car finance to people who are less likely to be approved elsewhere.

These may be people with a bad credit record, but it could also include people who are self-employed. Unfortunately, the fact that you are self-employed makes you a more risky bet for lenders. But a specialist lender can make the process a lot easier.

What Will You Need?

Different lenders have different requirements, but there is one thing that you will normally be asked to show: your financial records.

The lender may ask to see three years of accounts because they want to know how much you are earning. You don’t have any payslips, so this is a way for them to reassure themselves that you are a safe bet.

The car finance self-employed drivers can get will be determined by how risky they are for the lender. Being able to present your accounts and show that you can afford the loan makes you more likely to receive finance.

What Else Can You Do to Improve Your Chances?

As well as showing your accounts, you can also get on the electoral roll if you are not already on it. This will help your chances, especially if you are planning to apply for finance in the future and you can get on the roll a year or two before your application.

Also, check your credit record and make sure everything is in order. There may be mistakes that can hurt your chances, and as a self-employed driver, you want to make an extra effort to present yourself as a low-risk borrower.

Finally, if you can offer a larger deposit, that may help increase your chances of getting a car loan or even getting a better rate.

The Type of Work You Do Can Affect Your Chances

You may be able to apply for car finance when you are self-employed by applying as your business. In this case, you will normally need to have been trading for two years or more.

You will have to state whether it is for business or personal use, and some lenders will not provide finance if you are a taxi driver. The reason is that they don’t want the vehicle being used as a taxi because it travels more and reduces in value faster.

Get Car Finance Even If You Are Self-Employed

There is still a good chance that you can get car finance when you are self-employed, as long as you know that it might not be as simple as if you are in employment.

As well as providing details of your accounts, you can also help yourself by providing details of your address history for the last few years. Some lenders want to see that you have been a UK resident for at least a few years.

In general, as long as you can show that you are not a risky borrower, there is a very good chance that you can get car finance.

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