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Self Employed Electric Car Loans: Is Right for your Business?

Self Employed Electric Car Loans: Is Right for your Business?

If you are self-employed and need to buy an electric car, you have your work cut out for you. EVs are expensive right now, so you’ll need to be savvy to borrow enough.


The economy in Canada is in a delicate situation where it could become the victim of hyperinflation or a recession if the Bank of Canada is not careful with how it increases interest rates.

Lenders are trying to hedge their risks by revising their loan underwriting processes; as a self-employed borrower, there are more challenges you will need to overcome before you can drive off in your new electric car.


Is your income stable and sufficient for new self employed electric car loans?


Something that prospective lenders want to know is whether you are bringing in enough money to cover the proposed car loan plus your existing obligations.


Lenders rely on a debt-to-income ratio when they determine whether to approve a loan. The maximum amount of debt you can service is forty percent of your gross monthly income.


This is easy to calculate if you are working a conventional job where you receive roughly the same amount of money every month.


As a self-employed business owner, your income is not predictable, so lenders are going to try and determine the average.


The way lenders calculate what your average monthly income is by reviewing your bank accounts for the last few months and also your income tax notice of assessments.


Do you have strong enough credit to qualify for an electric car loan?


Having enough income is one component of the car loan underwriting process, but it is not the only one.


The lender will need to review your credit report to see how you handle your financial obligations.


Your credit score will range from 300 to 850, depending on which scoring model is being used.


A credit score of 680 or higher makes you eligible for the best interest rates.


Scores that are under 680 can secure a car loan, but there is an added risk of paying higher interest rates.


Will you be using the car for work or personal use?


Suppose you are using the electric vehicle solely for work purposes. In that case, you might consider leasing it instead of purchasing the car.


When you lease, the entire payment can be written off a tax deduction, while a car loan, only the interest is deductible.


You should always speak with a tax expert who can give you advice based on your situation.


Where to get electric car loans when you are self-employed


Your local bank will not be able to help you; most financial institutions are only able to assist borrowers that are salaried or work a traditional job.


Suppose you want to access electric car loans for self-employed borrowers. In that case, your only viable option is to work with a dealership in your area.


The dealership has experience assisting other entrepreneurs like you get financing for their new electric car, so you are in good hands.


These dealerships should also have electric cars in their inventory that you can take out for a test drive, so why not head over to the dealership now and get the paperwork started!


We’d love to help you find self employed electric car loans. Simply fill in the form below and we’ll get back to you ASAP or see our selection of used cars at our Burlington dealership. 


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    Categories: EV motoring