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How to get auto financing in Burford if you are self-employed

How to get auto financing in Burford if you are self-employed

A growing number of Canadians are starting their own business and if you are self-employed and need a new car, then you are in the right place.

As experts in self-employed financing, our Burford auto loans team explains how to get car finance when you work for yourself.

How auto financing works for self-employed borrowers

When you fill out an application for a car loan in Burford, the employment question comes up and if you check “self-employed” then a series of qualifying questions will come up.

The first question is to find out how long you have been self-employed.

Lenders want to get a sense of your cash flow and how stable it is, since business has good months and bad months, the lender needs to work out what your average monthly income is and the general rule is to ask for the last 2 years income tax and bank accounts.

If your business has not been running for at least 2 years, you may be required to get a cosigner because the lender does not have enough financial information to approve the loan.

Some lenders have adapted their car loan underwriting processes to be more accommodating to self-employed borrowers which we will touch on later.

Your credit score will make or break a Burford car loan

Your credit score is of even greater importance when applying for a car loan in Burford. The lender needs to see how you manage your finances and your credit score will need to be over 680 to qualify for prime interest rates, being self-employed you may need an even higher score.

Since these loans can be complicated, your best option is to enlist the help of a professional car dealership in your area.

The dealership has a deep pool of lenders that work with self-employed borrowers, these lenders are not available online to the general public, so the only way you could access them is by going through the local dealership.

If your credit score is under 680, you need to get your financial affairs in order or it can be difficult securing a car loan.

The dealership will review your credit report and then provide you with an overview of how you can raise your score. Start by paying off any collections that appear in your credit report, an unpaid collection will be an automatic rejection with most lenders.

By paying off the collection and keeping proof of it, you will be able to show the lender that you are taking responsibility for your debts which can help turn a rejection into an approval.

You can’t sit on the sidelines forever

There is a very limited number of cars that are available for sale in Canada. This scarcity is caused by supply chain issues and inflation on prices.

With a dwindling inventory of new cars to choose from, the longer you delay buying a car, the more expensive it will be going forward as the number of cars continues to go down.

This is why you must be proactive and start shopping for a new car now that you know how self-employed car loans work, it should be a great experience provided you are working with a local car dealership.

If you need help or advice on anything to do with auto loans in Burford, contact Car Nation Canada today, we can help!

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