What are the Benefits of a Low Doc Car Loan?

When you want to buy a new car for your business, it can be difficult to secure finance if you do not have the documentation that traditional lending institutions require. Greater accessibility for self-employed individuals is one of the primary benefits of a low doc car loan. If you lack the required up-to-date tax returns and financial documents, it can cause long delays in securing finance. A low doc car loan allows you to cut through the red tape and allows you to focus on getting the best vehicle for your needs.

What is a Low Doc Car Loan?

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. For a deeper dive into the specifics of low doc car loans and how they work, check out our blog on Understanding Low Doc ABN Car Finance.

Benefits of a Low Doc Car Loan

1.  Flexible Documentation Requirements - No Paperwork, No Problems!

Anyone who is missing up-to-date financials, such as a current tax returns, or simply don’t feel comfortable sharing said documents with their bank, will find a low doc car loan as the ideal solution. Lenders still 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 businesses 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. Please note that every lender has different requirements. Find out more about Low Loc Car Loan Requirements here.

2.  Potential Tax Benefits of a Low Doc Car Loan

Any ABN holder who takes out a low doc loan can claim tax deductions. Specifically, GST registered businesses can claim the GST component of the vehicle purchase price. You may also be able to claim the interest portion of loan repayments and vehicle depreciation. Before you fully commit to purchasing your new company car talk to your accountant. This link to the ATO website explains what you can claim as a tax deduction for motor vehicle expenses.

3.  Faster Application and Approval Process

One of the significant benefits of a low doc loan is the faster application and approval process. Because these loans require less documentation than traditional loans, borrowers can avoid the often lengthy and complex paperwork associated with full financial disclosures. Instead of providing extensive financial statements, tax returns, and other detailed records, applicants can submit more straightforward documents like bank statements or an accountant's letter.

This streamlined process not only reduces the administrative burden but also speeds up the overall timeline for securing financing. For business owners who need to purchase a vehicle quickly to meet operational demands, this faster approval can be crucial. Whether it’s taking advantage of a limited-time deal on a vehicle or needing to expand a fleet promptly to meet business growth, the quicker turnaround time of a low doc loan means that borrowers can move forward with their plans without unnecessary delays.

3. Fixed Low Interest Rates

The interest rate depends on your profile, credit score as well as the age, make and model of the car you wish to purchase. If you are a property owner who has has been running a successful business for a number of years then lenders view you as low risk. Consequently, you will be offered a more competitive interest rate. New or near new cars are viewed more favourably than older vehicles and again the interest rate will reflect this.

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. In order to save money, talk to AAA Finance today.

4. Easy Monthly Repayment Structure

Repayments are set for the term of loan. Repayments are paid monthly via direct debit.  This allows you to set and forget and focus on running your business. All costs associated with the loan contract, such as the lender establishment fee, are incorporated into the loan repayment.

5. Loan Terms lasting up to 7 years

Set the term of your low doc car loan to suit you.  A shorter term will result in a higher monthly repayment and the car is paid off quicker.   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 is on hand to provide aid in determining how the term will affect your repayment.

6. Balloon Payment Options – up to 35%

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. This balloon amount is either, 1. paid out or 2. refinanced, at the end of the business car loan term. For instance, some self-employed business owners choose to sell the vehicle, pay out the balloon amount with the sale proceeds and finance a new vehicle. As a result businesses can regularly update work vehicles, 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. Increase 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. Another example to increase business productivity is purchasing a bigger truck with an increased load capacity. This therefore results in fewer trips to complete a job.

How do Self-employed Individuals get the Best Low Doc Car Loan?

As you can see there are many benefits of a low doc car loan. You may now have decided a low doc car loan option is the right choice for you. What next? 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. As a result we will get you the best loan terms and lowest interest available. Let us help you save time and money!

AAA Finance provides speed loan turnaround times

• Application - approximately 5 to 10 minutes over the phone.
• Approval - approvals within 24 hours.
• Decide on your car - you can purchase privately or from a dealer.
• Settlement - overnight transfer of funds to the seller.

To discuss your options for a new vehicle and to learn more about how to get a low doc vehicle loan, get in touch with AAA Finance today. Your business will thank you.