Car Loans on Commission Income. Assessed on the Record, Not the Month

Commission is the actual complication in this application, not the job title. Whether you sell property, cars or candidates, your income is variable by design, and the assessment has to be built from your financial record rather than a payslip showing a fixed salary.

Lenders typically consider:

• Income stability: as many agents work on commission, lenders look for evidence of consistent income over time.
• ABN and business registration: if you are self employed, an active ABN and business registration are usually required.
• Credit history: a strong credit history can lead to more favourable loan terms.
• Vehicle type: new or used, and the value of the vehicle, can influence loan amounts and terms.
• Deposit: while not always mandatory, a deposit reduces the loan amount and can improve your chances of approval.

As with contract income, the practical answer is documentation. Tax returns, business activity statements or three to six months of bank statements let a lender assess a pattern rather than a snapshot.

Commission only earners have no guaranteed base, so the whole assessment rests on the record of what has actually landed in the account. The longer and steadier that record, the stronger the application. Lenders will generally want to see the earnings evidenced through tax returns or bank statements rather than estimated from a listing pipeline.

Retainer plus commission is easier, because part of the income is fixed and provable from payslips. The commission portion is then assessed on top using the same consistency test. Agents in this position often understate their capacity by presenting only the retainer, when the commission history would have supported more.

The same logic applies across car sales and recruitment, where a modest base plus a large variable component is the standard arrangement.

For an agent, the car is a mobile office and a part of how clients see you, which is why the structure often differs from a straightforward personal car loan.

A chattel mortgage is a popular option for businesses including self employed agents. You own the vehicle from the outset and the lender takes a mortgage over it as security. This structure may offer tax benefits such as claiming GST on the purchase price and depreciation where the vehicle is used for business, and professional tax guidance should be sought.

A commercial hire purchase has the lender purchase the vehicle and you hire it for an agreed period, with ownership typically transferring once all payments are made. A novated lease applies where you are employed and your employer offers salary sacrificing, with lease payments made from pre tax salary under a three way agreement. A secured car loan suits agents using the vehicle mainly personally or with limited business use, with the vehicle acting as security.

• Present a period, not a month. Tax returns, BAS or three to six months of bank statements let a lender see the pattern.
• Keep the ABN and registrations current if you are self employed, since these are usually required.
• Decide business or personal use first, because it drives which structure is appropriate.
• Talk to your accountant before choosing a business structure, since tax outcomes depend on your situation.
• 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.