Low Doc Car Loans

You can apply for low doc car loans if you’re short of documentation or don’t have up-to-date financials or tax returns.

No obligation. It won't affect your credit score.

Last updated on April 21st, 2022 at 10:08 am by Thomas Perrotta

Low doc car loan options for self-employed

If you’re a business owner requiring a car predominantly for business purposes but lack the necessary two years of tax returns, a low doc car loan is likely to be the ideal solution. In fact, low doc loans present some hugely attractive ongoing tax and GST benefits.

Savvy works with more than 25 lending partners who offer a range of low doc commercial lending solutions, which makes for a far more competitive loan environment and results in cheaper rates. Our expert consultants will find you the most cost-effective low doc loan deal, even with non-standard documents. Get a quote now to get your application started today.

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Low doc car loan features and benefits

Borrow up to 100% of your car’s value

There aren’t any mandatory deposits on low doc car loans, so you can borrow the full purchase price of your car (plus on-road extras like stamp duty and car rego).

Repay over up to seven years

You have a say in the cost of each of your car loan repayments and can ensure that they’re manageable for you by choosing between one and seven years in length.

Set your own repayment schedule

In addition to this, you’re able to structure the frequency of your car loan repayments around your personal income flow on a weekly, fortnightly or monthly basis.

Pay no GST on your car purchase

Because you’re buying your car for business use, you can claim for GST on the purchase price, which is likely to save you thousands of dollars in the process.

Tax-deductible interest

In addition to this, you’ll pay interest on each of your instalments. However, because this too is a business expense, you can claim these on your tax returns.

Claim for vehicle depreciation

Finally, the decline in value of your car is also able to be claimed on tax as a business expense, saving you further money particularly if you’re buying a new car.

Why choose Savvy?

Low doc car loans explained

A low doc, or self-declaration, car loan is, for all intents and purposes, functionally the same as a standard full doc commercial product. However, it’s designed for applicants who can’t supply their last two years’ worth of completed tax returns, resulting in a loan with further restrictions around borrowing power and loan term and a higher interest rate.

Most low doc car loans fall under the chattel mortgage structure. This type of finance is popular, cost-effective and enables everyone from sole traders to large companies to purchase vehicles. The ‘chattel’ is the car you’re buying, and the term ‘mortgage’ is the interest your lender has in your vehicle until you pay off the loan.

How to qualify

To qualify for a low doc car loan, you’ll need to tick off the following criteria:

  • You must be an Australian citizen, permanent resident or an acceptable visa-holder
  • Your ABN has been active for at least one year
  • You’re registered for GST
  • You’re asset-backed, namely by a house or commercial property
  • If you’re not asset-backed, you should have a large cash deposit which you can contribute to the purchase
 

The documents you’ll need

Your lender will ask for a variety of different documents as part of the low doc car loan process. While these will differ between lenders, you’ll be asked to produce at least two or more of the following:

  • Signed declaration of your business income
  • Letter from your accountant, confirming the projected income
  • Six months’ worth of trading bank statements
  • BAS returns for the last two quarters

Additionally, you’ll need to complete application and privacy consent forms, as well as provide proof of ID like your driver’s licence and/or passport.

It’s important to note, though, that even if you don’t meet all of the above criteria or documentation requirements, these can be assessed on a case-by-case basis and approvals are still possible in some situations. Speak with a Savvy consultant today about your situation if you’re unsure and want to know more about your options.

 

Comparing different loans

There are several features you should look to compare when choosing your low doc car loan, including the following:

  • Maximum and minimum loan amount
  • Maximum and minimum loan term
  • Interest and comparison rates
  • Fees
  • Repayment and deposit flexibility
 

Low doc and no doc

No doc loans are no longer available in today’s market. They’ve essentially morphed into what most lenders now offer in their low doc loan range. Low doc loans have undergone radical change over the years also, with tighter lending policies and a shifted focus towards responsible lending.

Although low doc loans are a commercial product and fall outside of consumer responsible lending guidelines, lenders have begun to apply further scrutiny, which is usually only required in consumer lending, into their commercial assessments as well.

Your most frequently asked low doc car loans questions

Can I take out a low doc loan for a private-use car?

No – low doc loans are, by nature, commercial products that are available to businesses and self-employed workers exclusively. If you don’t have the last two years of tax returns, you aren’t eligible to apply for any type of private-use car loan.

Can I take out a low doc car lease?

Yes – both car leases and hire purchases can be taken out under low doc conditions. These products are considerably less common than chattel mortgages, but there are still lenders who offer them amongst their product range. Speak to your Savvy consultant about low doc options for other finance products if you’re looking at another arrangement besides chattel mortgages.

How do I work out what I can borrow?

Your borrowing power is based on a variety of factors, including your credit score, your income (both current and projected), your savings and your history servicing similar debts. Your Savvy consultant will run an affordability check based on these factors in your application to determine the maximum figure you can feasibly be approved for, which is useful in saving time spent fruitlessly applying for more than you can manage.

Am I able to buy a used car with a low doc loan?

Yes – we partner with lenders who can accept secured loans for cars up to 20 years of age at the point of purchase. You can also purchase these either from a dealer or from a private seller located across the country, no matter where you live. Your consultant can help you arrange an interstate used car purchase should you wish to pursue one.

Should I make a balloon payment at the end of my low doc car loan?

You can – balloon payments, or residual payments, are a lump sum like a deposit that is to be paid at the conclusion of your loan term. These are an effective way to reduce the cost of each of your instalments. However, because your interest is calculated amortising to your residual value instead of $0, you’ll likely end up paying more in interest than you would without a residual.