Car Loans for Doctors. Built Around Contract and ABN Income

Medical income is rarely the problem in a car finance application. The problem is its shape. A large share of GPs, dentists and allied health practitioners work under a service agreement with a practice and bill through an ABN, which means there are no payslips to hand a lender, and a newly established ABN may not yet have two years of returns behind it.

Specialist lenders assess this directly. What they look for is much the same as for any contractor:

• Income consistency: regular deposits into your account over three to twelve months.
• Engagement history: a pattern of agreement renewals or back to back engagements.
• Professional qualifications: registrations and qualifications strengthen the profile.
• ABN status: active registration, with six to twelve months of trading accepted by specialist lenders.

Contractor doctors billing through an ABN are assessed on the agreement plus banking. Three to six months of bank statements can replace two years of tax returns, and an accountant's letter confirming income is accepted by some lenders.

PAYG hospital doctors and registrars are assessed on payslips in the usual way. Where the roster carries recurring shift allowances, penalties or regular overtime, those components should be included rather than base salary alone, and a year to date figure is the cleanest way to evidence them.

Mixed arrangements are common, with a salaried hospital position alongside contracted sessions elsewhere. Both streams can be presented, each evidenced over the same period, so the assessment is made on total income.

Short gaps between engagements are normal and understood where there is twelve months or more of contracting history behind them.

Two structures cover most cases, and the right one depends on how the vehicle is actually used.

A secured car loan is the straightforward consumer option. The vehicle acts as security, which often results in lower rates than an unsecured product, and it is the right fit where the car is mainly personal.

A chattel mortgage applies where you hold an ABN and use the vehicle in the business. It secures the loan against the vehicle while your business owns that asset from the outset. Where you are GST registered, the GST on the purchase price may be claimable as an input tax credit in your next BAS, and interest charges and depreciation are typically deductible. Repayments are usually fixed, with an optional balloon payment at the end of the term to reduce the regular amount. Tax outcomes depend on your structure, so confirm them with your accountant.

• Have the current agreement ready, since it is the anchor document for a contractor assessment.
• Keep three to six months of clean bank statements, ideally with business and personal banking separated.
• Ask your accountant for a letter confirming income if your returns are not current.
• Decide business or personal use first, because it determines whether a chattel mortgage is appropriate.
• Compare the comparison rate, not the headline rate. Establishment and monthly fees change the real cost.

Simple Loans holds Australian Credit Licence 509582 and is a member of AFCA. This page is general information and does not take your personal circumstances into account.