If the car isn’t as reliable as it used to be and kids look at you more as an unpaid Uber driver than mum these days, a new car is the only solution. Though working from home gives us more flexibility, it can land us into patchy territory when we’re looking for a car loan. Luckily, we do have ways of getting a good deal, despite lenders looking at us cross-eyed from time to time!

It’s all about risk for lenders

Traditionally, lenders have viewed the self-employed or entrepreneur as a high-risk borrower. As we all know (or will learn!) being a working mum at home can be filled with ups and downs when it comes to cash flow. Lenders know this and are more reluctant to lend out money to someone with unpredictable income. The task is on you to demonstrate that you are a low-risk to help lenders determine your car loan affordability. This increases your chance of approval and will help you avoid bad credit car loan rates (which can be as high as 30%p.a..)

What you can do to help your case

The first port of call for any bank or lender that’s considering your application is your credit history. Your credit history (or credit report, as its sometimes known) contains information about your applications for credit products such as credit cards, loans, phone contracts, etc. It also records if you’ve defaulted on a loan or credit card – which is a big black mark on your report. However, your report can have mistakes on it, which you must correct yourself. Removing these mistakes will give lenders a clean report which is all the more beneficial for you.

Gather your paper evidence

Another way to get your application over the line is to get as much information about your income as possible. Demonstrate you have good cash flow, using BAS statements, P&L statements or bank statements – anything that shows the numbers in a positive direction. Other bits of paper that will assist is residential history, support letters from trusted clients and high amounts of equity in assets, such as your home, office/shopfront or investment properties.

Bad credit isn’t forever

Some lenders may only grant conditional approval for mums with new businesses, which may result in approval for a bad credit car loan. But don’t despair – if you are diligent with payments and are in good standing, you can refinance car loans with better terms under certain conditions.

Before you apply, make sure you shop around for a lender or broker that is right for you.