Can I get a car loan with no proof of income?
The short answer is Yes! If you are a business with an active ABN and are asset backed, some lenders will approve a car loan with no proof of income. This type of business loan is called a no doc car loan. A no doc car loan is a form of chattel mortgage. The car or ‘chattel’ is used as security for the car loan or ‘mortgage’ and is paid off via regular monthly loan repayments.
How do I qualify for a car loan with no proof of income?
Each lender has different qualifying criteria. As a minimum you need the following to qualify for a car loan with no proof of income.
- Active ABN that is GST registered for a minimum of 12 months. You may be a self-employed individual, small business owner, the director of a family trust or involved in a partnership. If you are self-employed our guide to self-employed car finance may be helpful.
- Be asset backed. You may either own outright or have a mortgage for your principal place of residence or an investment property.
- Have a solid credit file with previous lending and no defaults or late payments. Your Equifax credit score needs be higher than 400.
- Be purchasing the car for predominately business-related use. The ATO deems ‘predominately’ as over 50% business use. Please note that driving your car to and from work is not deemed business related use unless the car is used at the place of business. For example, a tradie driving a work ute with tools to a work site is deemed as business related use. A hairdresser driving to and from a salon is NOT deemed business related use. However, if the hairdresser were a mobile hairdresser and carried their equipment to each clients address it would then be eligible.
What do I need to get a car loan with no proof of income?
- Rates notice as proof of property ownership.
- Identification in the form of a driver’s licence and/or Medicare card.
- Signed declaration stating that you can afford the car loan repayments. This is part of your car loan documents.
- Signed declaration stating that the car will be used predominately for business related use. Again, this part of your car loan documents.
- If you are a renter, then lenders will normally want to be able to confirm previous good conduct on a loan.
What are the benefits of a no doc car loan?
There a several business benefits when financing a car using a no doc car loan option. These include:
- Interest charged on the loan is tax deductible.
- Fixed monthly repayments.
- Competitive interest rates.
- Access to the ATO temporary full expensing. This replaces the instant asset write-off and allows businesses to immediately deduct the eligible depreciating assets, such as business vehicles.
- Balloon payments up to 50% of the purchase price.
- Terms from 3 to 7 years.
Don't forget that as a business owner you can also claim the GST on the purchase price of the car.
What if I don't qualify for this type of car loan?
There are 2 other types of chattel mortgage available for business vehicle finance. 1. low doc car loan and 2. full doc car loan. These loan types are fairly self-explanatory. A low doc car loan requires a small amount of documentation to prove income. This may be in the form of one or more of the following. Bank statements, BAS, accountants’ letter, profit and loss statement and/or previous tax returns. On the other hand, a full doc car loan requires a current tax return and notice of assessment for both the business and individual. Other documentation may also be required as per the low doc loan documentation requirements. Find out more about the different types of car loan on offer through AAA Finance.
Why use AAA Finance? To save time and money of course!
Each lenders qualifying criteria differ and are updated regularly. This is where an experienced finance broker can save you time and money. Our team of AAA Finance brokers navigate the complex and ever-changing world of business and consumer asset finance. At AAA Finance we have access to over 40 different lenders. We will find the lender that best suits your needs at the best possible terms.
Experience and a focus on customer service make our brokerage a step above the rest. AAA Finance provides quick and easy finance.
Quick – most loans are approved within 24 hours.
Easy – 5 minute application over the phone or complete in the comfort of your own home.
Call AAA today on 07 5493 1222 to speak with one of our friendly finance experts.
About the author
Peter Watman has extensive finance and automotive experience having worked in both industries for over 30 years. Peter founded AAA Finance and Insurance in 2012. He leads an experienced team that provides quick and easy finance solutions along with exceptional customer service.