1. Check your credit rating
The first step to getting a car loan as a sole trader is to check your credit rating. This will give you an idea of whether or not you are likely to be approved for a loan, and if so, what interest rate you may be offered. In most cases, the higher your credit score, the lower rates you’ll be eligible for.
2. Shop around
Once you know your credit rating, it’s time to start shopping around for a loan. Compare interest rates, fees, and terms from a variety of lenders to find the best deal. Don’t feel rushed – make sure you take the time to find the car and loan that’s right for you.
3. Decide if you’re after a consumer or commercial loan
Consumer loans are typically for those buying a car for personal use, while commercial loans are for those buying a car for business purposes. However, if you’re a sole trader you could be eligible for both consumer and commercial loans – so you’ll have double the options!
4. Read the fine print
When you’ve found a loan that suits your needs, it’s important to read the fine print carefully before signing on the dotted line. This will help you avoid any nasty surprises down the road.
5. Keep your repayments under control
Once you’ve got your loan, it’s important to make sure you keep up with the repayments. Missing a payment could damage your credit rating, and make it harder to get finance in the future. So, if you’re ever struggling to make a repayment, talk to your lender as soon as possible to discuss your options.
6. Get pre-approved
One of the best ways to make sure you get a great deal on your car loan is to get pre-approved before you start shopping. This means that you’ll know exactly how much money you have to play with, and can avoid any temptation to overspend. Plus, it shows dealers that you’re serious about buying a car and could give you the upper hand in negotiation.
7. Consider a novated lease
A novated lease is a type of car loan that’s often used by business owners and employees. With this type of loan, you make regular payments to your lender, but the car remains in your name. This can be a good option if you’re looking to get a new car without affecting your company’s cash flow.
8. Don’t rush into it
Finally, remember that a car is a big purchase, so don’t rush into anything. Take your time to research your options and make sure you’re getting the best deal possible.
Following these tips should give you the best chance of getting a car loan as a sole trader buying new car. Remember to shop around, compare interest rates and fees, and read the fine print carefully before signing any contracts. And most importantly, make sure you can afford the repayments!
