Self-employed car finance

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Can I receive car finance while self-employed?

Yes, it is possible, but it’s common for those who are self-employed to find it harder to secure car finance. Car Finance Plus are experts in securing car finance for people in all sorts of financial situations. We have a great deal of experience acquiring self-employed car finance, so while it can be more challenging, it is certainly possible.

Below we explain why those who are self-employed, contractors, and even freelancers, often struggle to find willing lenders, and how we can help.

Why it’s difficult to secure car finance while self-employed

There are two major criteria that a lender is concerned with when considering an application:

  • Will the borrower be able to meet repayments? (this is a legal obligation on lenders)
  • What are the chances of the borrower failing to meet the repayment schedule?

Those in full-time employment can often meet these criteria and provide evidence of the following:

  • The duration of their employment
  • Evidence of monthly income
  • Contracts of employment
  • The probable security of their employer’s business

It’s far more difficult for a person who is self-employed to provide this evidence, making it difficult for them to secure car finance. This is where Car Finance Plus can help.

What you’ll need to secure finance

Below is a list of items that you’ll need to be able to provide to prospective lenders in order to increase the chances of them accepting your application. The key thing to remember is: provide as much information as possible.

  • Evidence of your company’s formation (for limited companies)
  • Formal accounts from the past two years
  • For small or new businesses, bank statements as evidence of the company’s financial situation
  • Proof of income for the past 3-6 months from the business, whether that be via salary or dividends.
  • For businesses younger than 6 months, evidence of income from before the formation of the business may be required
  • Proof of place of residence – lenders prefer applicants who have lived at the same address for at least 12-14 months
  • Evidence of existing debts – including mortgage and credit card information

Securing vehicle finance while self-employed

Lenders cannot legally guarantee car loans to anyone, especially those who are self-employed; a loan being granted depends on your private and professional financial circumstances.

We recommend that you refrain from submitting too many finance applications at once – each time an application is rejected, it is recorded on your credit profile, making it more difficult to secure a loan going forward.

Applying with Car Finance Plus will allow us to assess your situation and advise you on the best course of action to increase the likelihood of you receiving self-employed car finance.

If you have any questions, contact us to find out more.

 

Representative example: Borrowing £10,000 over 3 years with a representative APR of 9.9% and a deposit of £0, the amount payable would be £320 per month, with a total cost of credit of £1528 and a total amount payable of £11,528.

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Get in touch, we’re here to help

Monday to Saturday (9am to 8pm)
Email: [email protected]
Telephone: 0333 050 3440

*The car loans are applicable to UK residents only. We do not take applications over the phone. Calls may be monitored or recorded.

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