Car finance when you are self-employed with no tax returns
Lenders usually prefer to see tax returns, but many will look at other evidence of income when you do not have them, such as business bank statements and GST returns. Expect more questions, possibly a bigger deposit or a higher rate, and no promise of approval, because each lender decides case by case.
The short answer
No tax returns does not automatically mean no car loan, but it does mean you have to prove your income some other way. A lender’s job is to make reasonable inquiries so that it is satisfied you can make the repayments without substantial hardship, and the Commerce Commission says it can ask for evidence of your income. Tax returns are the neat way to do that. If you do not have them, the lender needs something else it can rely on.
What that is depends on why you have no returns, and on the lender. Nobody can promise approval. Lenders decide case by case.
Why you have no returns
The fix depends on the reason, so work out which of these is you.
1. The business is new
If you started recently, there may be no completed year to file. Lenders generally want to see a year or two of trading accounts, and one NZ lender notes that newer operators may not have them yet but will still be assessed on the information available. Your best evidence is a clean run of business bank statements from the day you started. See also car finance when self-employed less than two years.
2. You are behind on filing
Inland Revenue says an individual tax return is due by 7 July unless you have a tax agent or an extension, and that it may charge a late filing penalty. If you have unfiled years, that is worth fixing in its own right, and a lender may ask about it. We cannot give tax advice. Inland Revenue, or an accountant or tax agent, can explain how to get up to date.
3. The records are untidy or mostly cash
You may have been trading for years with no proper accounts. Inland Revenue says to keep records of cash and non-cash sales and expenses, your banking records, and to show clearly any money you take out of or put into the business. It also says to keep them for at least seven tax years, and electronic records count. If your records are scattered, you can start by pulling together bank statements, invoices and receipts.
What lenders accept instead of tax returns
These are the substitutes NZ lenders and brokers describe on their own pages. Which ones a lender accepts varies, so ask first.
- Recent business bank statements. This is the main one. One lender calls tidy statements the single best thing you can hand over. Another asks for the last 90 days. A third lists 12 months among its options.
- GST returns. If you are GST-registered, filed returns show turnover Inland Revenue has already seen.
- An accountant’s letter. Some lenders accept a letter from your accountant confirming your income. You would need to ask yours.
- Proof the income is ongoing. Invoices, contracts or repeat customers show it is not a one-off.
- A simple income declaration. One lender lists this alongside bank statements.
- A deposit. Not a document, but it reduces the loan and can strengthen an application.
Mainstream banks tend to ask for more. ANZ’s car loan page, for example, says self-employed borrowers need to provide profit and loss statements, so a bank may not be the right fit without them. Non-bank lenders and low-doc products are where flexibility is more likely, which is a general observation and says nothing about any one lender’s decision.
What “low-doc” does and does not mean
A low-doc loan is assessed on lighter paperwork than full financials. A lender that offers it says plainly that it is not “no doc”:
- Affordability is still assessed, on your current trading rather than finalised accounts.
- Your credit history still counts.
- The rate may be somewhat higher, or the lender may want a larger deposit.
- Fees can apply. One NZ lender lists an establishment fee of up to $450 and an introducer fee of up to $995, so ask for every fee in writing.
The same lender calls a pitch of zero paperwork plus certain approval a red flag. We agree. Anyone who offers a loan with no questions at all is not following the rules lenders have to follow.
How lenders read your bank statements
A lender looking at statements is trying to answer a few simple questions.
- How much comes in each month, after refunds and transfers between your own accounts?
- Is it steady? A pattern of regular deposits looks different from one big payment.
- What goes out? Rent, other loans, tax, supplies and drawings.
- Is there a gambling or overdraft problem? These raise concern.
- Are business and personal money mixed? A separate business account makes it easier. One lender recommends opening one from day one.
If your income is irregular, our page on car finance with variable income explains how lenders look at months that swing.
A worked example
This example is made up to show the method. It is not a quote.
Say a sole trader’s business account shows these deposits over three months.
| Month | Deposits | Less refunds and own-account transfers | Counted |
|---|---|---|---|
| 1 | $6,200 | $400 | $5,800 |
| 2 | $4,900 | $0 | $4,900 |
| 3 | $5,500 | $300 | $5,200 |
| Average | $5,300 |
A lender then asks what is left after business costs, tax and personal living costs. If business costs and tax took roughly a third, about $3,550 a month would remain for the person. If rent, food and bills were $2,400, the room for a car loan is about $1,150 a month before the lender applies its own margins. A loan of $15,000 at an illustrative 16% over four years is about $425 a month. The numbers can work, but a lender will want to see the full picture. Try your own figures in the repayment calculator.
What to gather
- Business bank statements for as many months as you have, up to 12.
- Personal bank statements for the same period.
- GST returns if you are registered.
- Any filed returns, even from a single year.
- Invoices or contracts showing repeat work.
- An accountant’s letter, if you have an accountant.
- Photo ID and proof of address.
- Details of other loans and regular bills.
Our guide on what you need to apply lists the standard documents, and minimum income for car finance explains how lenders think about income levels.
Red flags
- No questions asked. A lender that does not check your income is not a safe place to borrow.
- Up-front fees before any loan is arranged.
- A promise of approval before anyone has seen your statements or credit file.
- A rate or fee structure you cannot get in writing.
- A term so long that the car is worth less than the loan for years.
- A guarantor you did not understand. See the guide on joint and guarantor car finance.
- Using unreliable paperwork. Do not hand over documents that do not match your real income.
Cheaper alternatives
If lenders will not take your paperwork yet, a cheaper car, a bigger deposit, waiting a few months to build a cleaner run of statements, or filing overdue returns first can all improve your position. If you drive for platforms, see car finance for gig workers. If your credit file also has marks, see low credit score car finance. The wider page on self-employed car loans covers the usual routes.
How Fair Finance helps
Fair Finance is a referral service, not a lender, broker or financial adviser, and we give no personalised advice or tax advice. One application and one soft credit check go to a panel of approved New Zealand lenders, each of which decides case by case. We are paid by the lender only if a loan settles, and that never changes your rate. For tax questions, go to Inland Revenue or an accountant. When your paperwork is ready, use the quick check.
Checklist
- Reason for having no returns written down
- Business bank statements collected
- Personal statements for the same months
- GST returns, if registered
- Overdue returns dealt with, or a plan for them
- Accountant’s letter requested, if you have one
- Other debts and bills listed
- Deposit decided
- Every fee and the total cost in writing
General information only, not financial or tax advice. Lender policies and tax rules change, so check the official pages below.
Sources
Common questions
Can I get a car loan if I am self-employed and have no tax returns?
Sometimes. Lenders have to check that you can afford the repayments, and returns are only one way to show income. Bank statements, GST returns and other records may be used instead, but each lender decides case by case and nobody can promise approval.
What is a low-doc car loan?
A low-doc loan is assessed on lighter paperwork than full financial statements, usually business bank statements and sometimes GST returns. One NZ lender describes it as not the same as no documents: affordability and credit history are still checked, and the rate or deposit can be higher.
What can I use instead of tax returns?
Common substitutes lenders mention are recent business bank statements, GST returns if you are registered, an accountant's letter and evidence that the income is ongoing. Which of these a lender accepts varies, so ask before you apply.
What if I have not filed my tax returns?
Inland Revenue says a return is due by 7 July unless you have a tax agent or an extension, and a late filing penalty may apply. If you are behind, speak to Inland Revenue or an accountant to get up to date. It is usually better to do that before you apply for finance.
I get paid in cash. Can I still get a car loan?
It is harder, because lenders need to verify what you earn. Inland Revenue expects you to keep records of cash sales and show money going in and out of business accounts. Paying cash takings into a business account regularly gives a lender something to read.
See your repayments, then get a fair rate.
One application, one soft credit check, no obligation. We match you to the lender most likely to give you a fair go.