Buying a Car When Self Employed in Canada Made Easy
Buying a Car When Self Employed in Canada Made Easy
Posted on March 21, 2025
Buying a car when self employed in Ontario is possible and often easier than people think. If you work for yourself, whether full-time or part-time, and need a car for personal or business use, dealerships in Ontario can help you get financing. It’s just about knowing what to expect and being prepared.
The Challenge is Proving Income Stability
When buying a car when self-employed, the most important thing lenders care about is your ability to make regular payments.
Since self-employed income can go up and down, lenders may ask for a bit more paperwork than they would from someone with a 9-to-5 job.
Most lenders will ask for proof of income. This might include:
- Tax returns (usually the last 1–2 years)
- Bank statements showing regular deposits
- Invoices or contracts from clients
- A Notice of Assessment from the CRA (Canada Revenue Agency)
It's worth noting, the dealership does not verify your income – it’s the lenders who review your documents. The dealership simply collects the documents and sends them to the lender.
Credit Score Still Matters
Your credit score also plays a big role. A higher score shows that you manage credit well, which gives lenders confidence. If your credit score is on the lower side, you may still get approved, but the interest rate might be a bit higher.
Even if you’ve had credit problems in the past, buying a car when self-employed is still possible. Many dealerships work with lenders that specialize in self-employed and credit-challenged customers.
We are one of those dealerships! Click here to learn about our bad credit car loan service.
Down Payments Can Help With Your Terms & Approval
Having a down payment can make buying a car when self-employed easier. It lowers the amount you need to borrow and shows lenders you’re serious. Even a small down payment can make a difference.
In some cases, if your income documents are strong and your credit score is good, you may not need a down payment. Every situation is different, and dealerships in Ontario can help you understand your options.
Can You Write Off the Car?
If you use your car for work, talk to a tax expert. As a self-employed person, you may be able to claim some expenses, like fuel, maintenance, and even part of the car payment or lease.
You might also claim Capital Cost Allowance (CCA), which is a tax write-off for business use of a vehicle.
This won’t affect your loan approval, but it’s good to know for tax season.
New or Used – It’s Your Choice
Dealerships in Ontario offer both new and used cars. Some self-employed buyers prefer used cars because they are more affordable.
Others may choose new cars for warranty and reliability. Lenders can finance both, and your self-employed status doesn’t change that.
The process of buying a car when self employed is the same, whether you choose new or used. We have a comprehensive page on whether a new or used car is right for you. Click here to learn more.
Work With the Right Dealership
Not all dealerships are the same. When buying a car when self-employed, it helps to work with a dealership that understands how to help self-employed customers. They can guide you through the steps and work with lenders that are flexible.
Some dealerships even offer in-house financing, but in Ontario, most financing still goes through banks or lenders. The dealership helps you apply, but again, it’s the lenders who make the final decision.
Buying a car when self-employed in Ontario doesn’t have to be stressful. Be ready with your income documents, know your credit score, and work with a helpful dealership. Whether you drive for business or just need a car for daily life, there are options for you.
If you have questions, a local dealership can walk you through the steps. Self-employment is common in Ontario, and dealerships are used to helping people in your shoes.
If you're ready for a car loan in Southern Ontario, we'd love to help! simply fill in the form below to get started.