Low Doc Car Loans
What is a low doc car loan?
Low doc car loans are a business car loan option available only to self-employed people and businesses with an ABN. The vehicle being purchased must be used 'predominantly' for business purposes, that is, more than 50% of the time for business related use. Low doc loans essentially means low documentation. In other words, it allows businesses to finance a car without the need for full financials.
- Benefits of a low doc car loan
- Calculate how much you will pay
- Apply for a low doc car loan
- Low doc car loan FAQs
- Keep it insured
When you are self-employed or run a small business, obtaining a car loan can be made difficult by red tape. Many businesses find it difficult to qualify for traditional loans. This is because the paperwork needed for a business car finance loan can be extensive. Businesses that have struggled to secure a car loan in the past will find it much easier by working with AAA’s low doc car loans system. Above all, it negates the need for much of this paperwork that prevents self-employed ABN holders and Australian business owners from accessing car finance.
Benefits of low doc car loans
There are many benefits of a low doc business finance. These include the following:
- No paperwork - no problems!
- GST and other tax breaks for ABN holders.
- Fixed low interest rates.
- Easy monthly repayment structures.
- Loan terms lasting up to 7 years.
- Balloon payment options of up to 35%.
Read on to find out exactly how these benefits can apply to your purchase.
No paperwork - no problems!
Anyone who is missing up-to-date financials, such as a current tax returns, or simply don’t feel comfortable sharing said documents with their bank, will find a low doc car loan as the ideal solution. With a low doc car loan option you will need to provide some basic financial documentation to prove income. Please note that every lender has different requirements. For instance, documentation could include business bank statement, business activity statement (BAS), profit and loss statement and / or an accountants letter.
GST and tax breaks for ABN holders
Business owners who obtain car finance with a low doc car loan option are able to claim tax deductions and GST benefits if they are an ABN holder. Anyone in this situation may be able to claim the interest on the car loan as tax-deductible. Businesses registered for GST can also claim the GST portion within the purchase price of a vehicle in their next BAS. This link to the ATO website explains what you can claim as a tax deduction for motor vehicle expenses.
Temporary full expensing was introduced in the 2021 Budget, replacing the instant asset write-off. Businesses with an aggregated turnover of less than $5 billion can immediately deduct the business portion of the cost of eligible new and second hand depreciating assets. Great news - business vehicles are classed as an eligible asset! Find out more information on the following ATO link.
Fixed low interest rates
Low doc car loans have a fixed interest rate for the term of the loan. That is, your repayment does not change allowing you to budget for the cost of your next business vehicle. At AAA we work with a panel of over 40 lenders. From this large array of lenders, our experienced team chooses the lender that best suits your individual circumstances. This results in your low doc car loan approved at the lowest possible interest rate.
The interest rate will be dependent on your profile, credit history and the age, make and model of the car you wish to purchase. If you are a property owner who has has been running a successful business for a number of years then lenders view you as low risk which results in your being offered a more competitive interest rate. New or near new cars are viewed more favourably than older vehicles and again the interest rate will reflect this.
Easy monthly repayment structure
Loan repayments are set up to be automatically direct debited monthly. This therefore allows you to set and forget and focus on the important things, like running your business. We have lenders that have no ongoing fees and all costs associated with the loan, such as lenders establishment fee, are incorporated into your monthly repayments.
Loan terms lasting up to 7 years
You dictate the term of you loan. The longer the term, the smaller the monthly repayment and thus can free up much need cash flow for your business. A shorter term has the car paid off quicker but the monthly repayment is higher. Our car loan calculator is on hand to provide aid in determining how the term will affect your repayment.
Low doc car loan balloon payment options
With a balloon payment scheme, borrowers can secure a repayment plan that allows them to decrease their monthly loan repayments and pay off a larger amount of the principal at the end of the loan period. A portion of the car value, up to as much as 50%, is not included in the loan amount. Instead, this sum is due at the end of the loan in the form of a lump sum payment. This balloon amount is either, 1. paid out or 2. refinanced, at the end of the business car loan term. Some business owners choose to sell the vehicle, pay out the balloon amount with the sale proceeds and finance a new vehicle. This allows them to tap into any tax breaks AND have an updated new work vehicle on a regular basis.
Calculate how much you will pay
By gauging the amount you wish to borrow, the term of your low doc car loan and an approximate interest rate, our car loan calculator will tell you just how much you are likely to be paying each month. This is therefore an important tool for planning ahead and making sure you get a car loan that perfectly suits your financial situation.
Apply for a low doc car loan
With so many benefits available, a low doc car loan is a must-try for any business owner with an ABN, let alone one who finds themselves in a situation where traditional lending is out of reach. If this is something that you would like to find out more about, get in touch with AAA Finance today. In addition, we can even organise a pre-approved low doc car loan. This allows you to shop with the knowledge that your funds are approved and fit within your budget
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Low doc car loans FAQ
Every lender is different. The minimum requirements for a low doc car loan is 1 year ABN and 1 year GST registered.
Yes - the vehicle must be used predominately for business use. 'Predominately' is considered greater than 50% businesses related use.
Most low doc car loan approvals take 24 hours.
Every lender has different requirements. You MAY need to provide some proof of income. This could be in the form of bank statements, profit and loss statement, BAS and/or tax return.
Keep it insured
At AAA Finance we offer a range of car insurance products. These are essential when taking out a low doc car loan. They protect both your vehicle and the money you borrow.
Comprehensive car insurance is a requirement of all car loan lenders. Other insurance products that can protect your car include extended warranties, as well as and tyre and rim insurance.
Loan protection insurance can keep you safe against an unforeseeable loss of income, which could be due to accident or illness. Gap or shortfall insurance is also available, which protects the 'gap' between a low doc car loan debt and the significant pay out that occurs in the case of the write-off or theft of your vehicle. These types of insurance don't just protect against those specific situations, but they will also be very useful for protecting your credit rating in the unlikely event that any of these situations occur.
Whether the problem is big or small, there is likely a type of cover available to make sure your low doc car loan and subsequent driving adventures go off without a hitch.
