Can You Get a Car Loan If You’re a Sole Trader?

đŸ’Œ Can Sole Traders Get a Car Loan?

Yes! However, sole traders face stricter approval criteria compared to PAYG employees. Since your income may vary, lenders will assess:

✅ Your business income and expenses
✅ Your ability to repay consistently
✅ Your credit history

If you can provide strong financial documents, getting a car loan as a sole trader is possible.

🔍 How Do Lenders Assess Sole Trader Car Loan Applications?

Unlike employees, sole traders don’t receive regular payslips, so lenders evaluate other financial factors.

Factor Why It Affects Approval How to Improve Chances
📊 Business Income Stability Inconsistent earnings raise concerns about repayment ability. Show 2 years of financial records to prove stability.
🏩 Bank Statements & Tax Returns Lenders use these to verify income. Provide at least 6-12 months of statements.
💳 Credit Score A strong score improves approval chances. Keep credit card balances low and pay bills on time.
🏠 Debt-to-Income Ratio (DTI) High business or personal debt reduces borrowing power. Reduce outstanding loans before applying.
🚗 Secured vs. Unsecured Loan A secured loan lowers lender risk. Use the car as security for better rates.

If your income fluctuates, lenders will look at your overall financial health before approving a car loan.

✅ How to Get a Car Loan as a Sole Trader

If you’re a sole trader looking for car finance, follow these steps to increase your approval chances:

1ïžâƒŁ Keep Business & Personal Finances Separate – Use business bank accounts for clearer records.
2ïžâƒŁ Prepare Financial Documents – Lenders may ask for BAS statements, tax returns, or an accountant’s letter.
3ïžâƒŁ Maintain a Good Credit Score – Pay bills and business expenses on time.
4ïžâƒŁ Consider a Low-Doc Loan – Some lenders offer low-document car loans for sole traders.
5ïžâƒŁ Use a Finance Broker – A broker can find lenders that specialize in sole trader car loans.

If your business is new, some lenders may require additional proof of financial stability.

🚹 Can You Get a Car Loan If You Have Low Income as a Sole Trader?

It’s possible, but you may need:

✅ A co-signer (e.g., a partner or family member)
✅ A larger deposit to reduce the loan amount
✅ A secured loan (car as collateral) for better approval chances

A finance broker can help you find lenders that approve self-employed borrowers with variable income.

🚀 Why a Finance Broker Can Help If You’re a Sole Trader

If banks reject your car loan due to self-employment, a finance broker can help by:

✅ Finding lenders that approve sole trader car loans.
✅ Matching you with a loan that fits your financial situation.
✅ Helping you avoid unnecessary credit checks that lower your score.

If you’re a sole trader needing a car loan, don’t risk rejection! 🚗💹 A finance broker can help you secure finance with the right lender.

If you’re a sole trader looking for car finance, you still have options! A finance broker can match you with lenders who approve self-employed car loans.

 

DISCLAIMER

The information provided on this website is general in nature only and has been prepared without considering your financial needs, circumstances and objectives and should NOT be construed as financial, taxation or legal advice. For more information, get in touch with our experienced partner brokers today.

Back to blog
1 8

Emergency Car Kit for Breakdowns

$74.99
$74.99
Sale Sold out
View full details

Other Blogs

  • Do Low Doc Car Loans Require a Deposit?

    Introduction Low doc car loans help small business owners and sole traders access vehicle finance without full tax returns — but one common question is: Do I need a deposit...

    Do Low Doc Car Loans Require a Deposit?

    Introduction Low doc car loans help small business owners and sole traders access vehicle finance without full tax returns — but one common question is: Do I need a deposit...

  • Low Doc Car Loans for Sole Traders

    Introduction As a sole trader, getting vehicle finance can feel tricky — especially if you don’t have up-to-date tax returns or complete financial statements. But that’s where low doc car...

    Low Doc Car Loans for Sole Traders

    Introduction As a sole trader, getting vehicle finance can feel tricky — especially if you don’t have up-to-date tax returns or complete financial statements. But that’s where low doc car...

  • Can Casual Government Workers Get Car Finance? ...

    If you work in a government role but don’t have a permanent contract — maybe you're casual, part-time, or on a rolling contract — you might be wondering: “Can I...

    Can Casual Government Workers Get Car Finance? ...

    If you work in a government role but don’t have a permanent contract — maybe you're casual, part-time, or on a rolling contract — you might be wondering: “Can I...

1 3

All Your Questions Answered

What is a car loan and how does it work?

A car loan is a finance product where a lender provides funds for you to purchase a vehicle, which you repay over time with interest.

What’s the difference between secured and unsecured car loans?

Secured loans use the car as collateral, often leading to lower interest rates. Unsecured loans don’t, but usually have higher rates.

What loan terms are available for car finance?

Most car loans offer terms from 3 to 7 years. Find out what term suits you best.

How is interest calculated on a car loan?

Interest is based on the loan amount, term, and rate. Fixed-rate loans have predictable repayments, while variable rates can change.

Can I get a car loan for a private sale?

Yes, many lenders accept private sellers. You’ll need to provide extra documents.

Do government employees get lower interest rates on car loans?

Yes — many lenders offer better rates due to your stable income. Explore finance options for government employees.

Can I apply for a car loan while on probation?

Yes. Many workers are approved during probation.

What credit score do I need as a government employee?

A score of 650+ is ideal, but lower scores may still be considered.

Are corporate professionals eligible for low-rate finance?

Yes, especially if you're full-time with strong income.

Can I get car finance with a novated lease?

Yes, many government departments support novated leasing.

Can I get a car loan with no credit history?

Yes, it's still possible to get a car loan with no credit history.

What if I’ve been declined elsewhere?

A broker can help restructure your application for better results.

How do I check my credit score?

Use Equifax, Experian, or Illion for a free check.

Can I get finance if I have a current personal loan?

Yes, if your income supports both loans. A broker will assess your capacity.

What documents do I need to apply?

Typically: ID, payslips, and bank statements.

Can casual workers get car loans?

Yes, if you’ve worked consistently for 6+ months.

Can I apply if I’m self-employed with an ABN?

Yes. Consider a low-doc loan.

Can Centrelink be used as income?

Yes, when paired with PAYG income.

What’s the minimum income to qualify for car finance?

Most lenders prefer $30,000+ annually, but this varies.

Can I apply on a fixed-term contract?

Yes, especially if it’s government-backed.

Can I finance a used car?

Yes, most lenders allow used cars under 10 years old.

Can I get a loan for an SUV or family car?

Absolutely

Can I finance a caravan or motorbike?

Yes

Can I finance an EV or hybrid car?

Yes. You may even qualify for green car loan discounts.

Can I use my car for both work and personal use?

Yes you can.

What is a balloon payment?

It’s a lump sum due at the end of the loan term.

Can I make extra repayments?

Yes, many lenders allow this without penalty.

Can I pay off the loan early?

Yes — ask if there’s an early payout fee.

Is there a deposit required?

Not always.

What loan terms are available?

1 to 7 years is standard.

How long does approval take?

24–48 hours in most cases

Can I apply online?

Yes — most lenders and brokers accept online applications.

Is a broker better than going direct?

Often, yes. They can compare lenders for you.

Can I get pre-approved?

Yes — and it gives you better negotiating power at the dealership.

What happens after I apply?

Your documents are reviewed, and if approved, the lender issues funds to the seller.

Can I get a loan with a visa?

Yes, in some cases. see finance for visa holders here.

Do I need a driver’s licence to apply?

Yes, but learners may qualify with a co-applicant.

Can I apply with someone else?

Yes, joint applications are allowed.

Can I refinance my current car loan?

Yes — it can lower your repayments or get you a better rate.

Can I trade in my old car as a deposit?

Yes, many lenders accept trade-ins toward the deposit.

Can nurses get car finance?

Yes — see nurse-specific finance tips.

Can teachers apply while on contract?

Yes. Read how to get approved.

Do defence personnel get special car loan rates?

Yes, in some cases. Your job security is a major advantage.

Can FIFO government workers apply?

Yes — consistency in income matters more than job location.

Can I apply if I’m on maternity leave?

Yes, especially if you’re returning to work. Here’s how.

Can I use car finance to buy interstate?

Yes — just make sure the seller provides all required documents.

Can I finance a car from an auction?

Yes, but only through select lenders. Ask your broker first.

Will applying hurt my credit score?

Only if you apply to multiple lenders directly. Brokers help protect your score.

Can I get a car loan if I’ve been bankrupt before?

Yes — see bad credit car loan options.

What if I want to upgrade my car before the loan ends?

You can sell the car, pay off the loan early, or refinance.