The benefits of a low doc car loan make it an ideal financing solution for self-employed individuals and small business owners who may not have the traditional income documentation required for a standard loan. With a streamlined application process, faster approvals, and potential tax advantages, this type of loan offers flexibility while still providing access to competitive financing. When you need need a vehicle for business use, a low doc car loan can help you secure the funds you need without the hassle of extensive paperwork. In this article, we’ll explore the key benefits of a low doc car loan and how they can work in your favor.
Low doc Car Loans Explained
A low doc car loan is a business car loan option available only to self-employed individuals and businesses with an ABN. Low doc essentially means low documentation. It allows business to finance a car without the need for full financials. However, lenders still require some type of proof of revenue or sales passing through the business. As a business loan, the car must be used predominately for business use. That is, the car must be used greater than 50% of the time for business related use.
1. No paperwork no problems!
Lenders need to be able to verify your ability to repay the loan, and as such, you will need to provide some basic documentation. This documentation confirms your business is financially sound and has revenue passing through the books. Documentation could include an accountant’s letter, a recent business bank account statement or your latest BAS. Every lender has different requirements.
2. GST and other tax breaks
Any ABN holder securing a low doc loan can benefit from tax deductions. The ATO currently offers a one-time tax break through the instant asset write-off for purchases up to $20,000. Additionally, you can claim the interest portion of your loan repayments and depreciate the vehicle over time. GST-registered businesses may also claim the GST component of the vehicle’s purchase price. Before finalizing your company car purchase, consult your accountant to maximise your tax benefits.
3. Fixed low interest rates
Fixed interest rates mean you do not have to worry about your loan repayments changing as the market does. You know exactly what you are going to pay from start to finish. At AAA Finance we have over 40 lenders. We match you and your individual circumstances to the lender that will get you the best deal. Save money and talk to AAA Finance today.
4. Easy monthly repayment
Repayments are set for the term of loan and are paid monthly via direct debit. This allows you to set and forget and focus on running your business.
5. Loan terms up to 7 years
Set the term of your low doc car loan to suit you. A shorter-term results in a higher monthly repayment. A longer term stretches out the repayments but may make them more manageable. This can allow businesses to maintain cash flow while upgrading business vehicles. Our car loan calculator lets you change the term so you can see how repayments are affected as you increase and decrease the term length.
6. Balloon payment options
A balloon payment is when a portion of the asset value is not paid as part of the loan. Instead, this sum is due at the end of the loan term. Businesses can use a balloon payment to reduce the monthly repayments on their car loan. They then sell the car at the end of the term and use these funds to pay out the balloon. The business then buys a new company car with a balloon and starts the process again – tapping into tax breaks along the way. Use our car loan calculator with balloon payment option to see how loan repayments change when adding a balloon payment.
7. Improve business Productivity
An updated vehicle will increase your business efficiency and your bottom line. Upgrading the company car is going to help you to save money by cutting down on operating costs. A new vehicle will be safer, more fuel-efficient and (most likely) will not break down as often. When purchasing a new work vehicle, you can get exactly what you need for the job. A bigger Ute with custom toolboxes can improve efficiencies and staff never have to spend precious time searching through clutter. A bigger truck has an increased load capacity and therefore fewer trips are required and more jobs can be completed.
How to get the best low doc car loan
So, you have decided a low doc car loan option is the right choice for you. Now you need an experienced finance broker with access to a large range of lenders. At AAA Finance out staff have over 95 years of finance experience. We are the experts in low doc loans. With access to over 40 different lenders, we match your individual circumstances to the right lender. We will get you the best loan terms and lowest interest available. Let us help you save time and money!
To discuss your options to finance a business vehicle and to learn more about low doc loans, get in touch with AAA Finance today. Your business will thank you.
