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How to buy an EV in Ontario if you are self-employed

How to buy an EV in Ontario if you are self-employed

Self-employed Ontarians that want to buy an EV are in luck; the prices for EVs manufactured by top-notch carmakers like Ford are very competitive, especially when you look at the long-term savings potential.

Having all of your I's dotted

The underwriting process for self-employed EV car loans is different than for a borrower that works a "conventional job".

Potential lenders need to know how much money your business is bringing in and the consistency of that income.

Each lender has a ratio they use when trying to determine what is the maximum amount of money they can approve for a car loan. This ratio is commonly referred to as debt-to-income, or DTI for short.

With the economy facing uncertainty, most lenders have tightened up their underwriting and will not approve a loan if the DTI ratio is over 35%.

This ratio takes into consideration all of your debts, including the proposed car loan.

By providing the lender with copies of your bank account statements, they will be able to approve you for the maximum amount based on your credit score. .

To access the best terms, your credit score should be 700 or higher, but you can get approved for a car loan if your score is at least 600.

Are you leasing or buying the EV outright?

You should consider speaking with your tax advisor to determine which option is the right one for you. You can deduct the entire lease payment from your taxes as a business expense when you lease. If you were to purchase the EV, these payments are not considered deductible, there are pros and cons with each scenario, and only your tax advisor can help you make the right selection.

Immediate benefits of buying an EV

The most immediate benefit is never having to buy gas again. The average price of a liter of gas is over $2.20, and that is going to continue to increase.

Carbon taxes and a spike in global demand for gasoline have created this problem which isn't going away.

Not only will you be saving money on fuel, but there are also government tax incentives you can leverage to help you save even more money.

Where to get the best EV car loans for self-employed Ontarians

You probably spend a good amount of time online doing research, which is great when you are trying to get the biggest bang for your buck.

When it comes to financing an EV, no matter where you live in Canada, your local car dealership is the best source of financing.

These dealerships have the infrastructure in place that makes it easy to identify the lender/s who will give you the best loan. Suppose you are facing any type of credit or income verification challenges.

In that case, the dealership will be able to help you overcome those challenges and get approved for the car loan.

Contact your local EV dealership as soon as possible, like right now, and book a test drive. You are going to be very happy making the switch from gas to EV, but you need to get the ball rolling.

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Categories: EV motoring