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Things self-employed Canadians need to consider when buying a car

Things self-employed Canadians need to consider when buying a car

The pandemic has changed our society in a profound way, we've had to think about how we balance work and life. You're in the right place if you've decided to start your own business.

Getting a car loan as a self-employed person will be one of the hardest things you will have to deal with as our Ancaster car loans team explains.

Why self-employed people have a hard time getting car loans

Lenders think that self-employed borrowers are less likely to repay their debts compared to employed borrowers.

The pandemic showed us that no one has a guaranteed job. So, one way to protect your income is to work for yourself.

Lenders are also hesitant to give loans to people who are self-employed because their income is thought to be unstable.

We'll show you how to deal with these worries and get your loan approved.

Are you good with money?

In Canada, the average credit score is around 660, and to get the best loans; you need a credit score of 720. With Koho, you can check your credit score for free.

If your credit score is below 650, you could have a lot of debt. Most self-employed Canadians put their business expenses on their personal credit cards because of the massive number of reward points and miles you receive.

Your credit score will go down and stay down until the balances are paid in full.

Lenders use credit scores to figure out how much interest to charge, so you should do everything you can to improve your score.

Do you keep close watch of your finances?

This is the hardest step for people who are self-employed and want to buy a car. You don't have a pay stub, so you can't give one.

What you should do is give your last year's bank account statements and income tax returns. The lender can look at your total income and figure out how much you make on average each month.

With this number, the lender can figure out how much of a loan you can afford.

How to find lenders who give car loans to people who work for themselves

You might think that the Internet is the best place to find these lenders, but you are wrong. Lenders who focus on car loans for self-employed people can't grow their market share on their own, so they prefer to work with dealerships.

Your local dealership can help you get a car loan in Ancaster if you work for yourself. You'll need to set up a meeting with them so they can look at your finances and figure out which lender is best.

These dealerships have the largest network of lenders in all of Canada, so you will be happy with the deal they find for you.

The dealer has a great selection of both new and used cars for you to choose from. Once you've been approved for a loan and found the car of your dreams, the deal is done.

As a self-employed Canadian, buying your first car is going to be a major milestone. What are you waiting for now that you know how to get these loans? Car prices are going up, so you need to take action before you can't afford the car of your dreams.

We will use all our skill and experience to deliver the lowest possible Ancaster auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

Categories: Auto Loan

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