Self Employed Car Loan

Musician_2

I'm a self-employed musician. Good earnings, good credit score, no money problems etc

I need a loan to buy a new car that I'll use for business and domestic puposes. Looking for £8500, repaid over 3 years.

Sainsburys have just refused to lend because I'll be using the car for business purposes. Is this a problem I'm likely to come up against a lot? Are there lots of restrictions on lending to 'businesses'.

Musician_2

Tesco bank have also just told me they only lend for personal use...

SeanG79

Reading the exclusions on the Sainsbury website, business purposes are excluded.

To answer your question though, yes you can get finance, have you looked into dealer finance (Hire Purchase).

Also, have you tried your own bank?

DCFC79

Musician wrote: »

good credit score,

Doesn't mean anything as far as lenders are concerned.

jonesMUFCforever

Self employed suggests a business loan may be more appropriate - if OP has a business account of course.

WG0608

If you did decide to fund the car as a business expense you might find contract hire rather than purchase is more cost effective. You would a much better car for the same monthly payment and could exchange it for new every 3 years.

macman

I don't understand why anyone but the insurers would be interested in what you use the car for. The finance co.'s sole concern should be that you can service the debt, and, since you are self employed, that is more likely to be a stumbling block, especially in your profession, because your income presumably fluctuates.

jonesMUFCforever

macman wrote: »

I don't understand why anyone but the insurers would be interested in what you use the car for. The finance co.'s sole concern should be that you can service the debt, and, since you are self employed, that is more likely to be a stumbling block, especially in your profession, because your income presumably fluctuates.

You have answered your own question.
Self employed = uncertain income
Employed = salary weekly/monthly

ricardinho88

Finance companies don't like it when you use a financed car for business use, because that indicates you're going to drive a lot of miles, and if you decide to voluntarily terminate the agreement, or fail to pay resulting in repossession, then the lender will get a reduced price back for the car because of the high amount of miles that it has done.

There are lenders that can provide finance for business use though, and can cater for self employed people too. It's just about knowing where to look.

SeanG79

ricardinho88 wrote: »

Finance companies don't like it when you use a financed car for business use, because that indicates you're going to drive a lot of miles, and if you decide to voluntarily terminate the agreement, or fail to pay resulting in repossession, then the lender will get a reduced price back for the car because of the high amount of miles that it has done.

There are lenders that can provide finance for business use though, and can cater for self employed people too. It's just about knowing where to look.

That's all good and well but invalid as to why the OP was declined, the OP applied to Tesco and Sainsbury who only offer fixed sum personal loans, so you cannot voluntarily terminate those agreements.

The reason they are declining is their T&C's state only personal finance not business finance