Car finance has become one of the most popular ways to fund the purchase of a new car. So, no matter what your employment type might be, you might want to consider it as your next option. But if you’re self-employed, you may be concerned that the option is open to you.
The good news is that car finance can be an option, even if you are working for yourself. Here’s how to get car finance if you’re self-employed.
Whenever you apply for car finance, it’s a good idea to check your eligibility first. If you are self-employed, use any tools on the finance providers website to see what you need to qualify, and what packages might be available to you. Not only will it stop you from applying and being rejected, but you’ll see what sort of deal you are likely to get.
All car finance packages are assessed on your ability to pay for the cost of the deal. When you are self-employed, you might find there are more checks in place. You will need to demonstrate that you have had a consistent income over the last 3 months at least. This can be a copy of your bank statements or the accounts from your business. You will need to ensure that these documents show the same level of income. Any inconsistencies and you’ll have to provide more evidence to show you can afford the finance package.
When you have pay slips from an employer, it’s easier to prove the amount of money you are earning. If you are self-employed, it might not be so simple. So before you apply for the car finance package, collect together as much information about yourself as you can. Anything that shows you are earning a steady income is important, but also you should ensure that you and your financial history are easily traceable. Your self-assessment tax returns over the last few years can be excellent supporting statements to help back up your application.
If you’ve had finance before and paid it off without any issues, that’s something you want to ensure is recorded on your file. You’ll also want to help show your address history. The easiest way to do this is to ensure you are on the electoral roll at each address you live at.
Some lenders won’t provide you with as large a finance package if you are self-employed. A good way to work around this is to have a larger deposit available. Not only does this show you were able to put aside a good sum of money, but it will also reduce the amount you need to borrow.
One thing that all applicants should do is to check their credit score in advance of their application. If you are self-employed, it’s especially important that all the details are correct and there’s nothing on your file that will jeopardise your application. Check your file and see if all the information on there is correct. Any irregularities, contact the credit agency or your previous finance company to have it resolved.
If your credit score is lower than you’d like, it’s a good idea to begin taking steps to repair your file, whether you are applying for car finance or not.