Being a parent and a self-employed worker allows you to have freedom when it comes to family life. Getting a vehicle can be the key to growing their business as efficiently as possible. Whether you’re a builder, dog walker or delivery driver, there are many reasons why your vehicle may be a lifeline to you. Buying a car as a self-employed worker can be different to a traditional buyer because you’ll have specific needs and a budget to stick to. 

Read the 5-step guide below on how to buy your next vehicle the right way. 

Consider your buying options. 

The most popular ways to buy a vehicle when you’re self-employed are with cash or with finance. Both are good options but depending on your budget you may be better suited to one over the other. 

  • Buying with cash. Usually, any purchase is the most cost-effective when you pay with cash. You’ll own the goods outright and it’s yours to keep. There’s no interest or monthly payments to make like car finance and you are limited to what you can do with the vehicle. However, the biggest drawback of buying with cash is saving up enough money to get the vehicle you want in one lump sum payment. 
  • Spread the cost with finance. Financing a vehicle allows you to get a newer, better car than you probably would with cash but pay for it over an affordable term. There is usually interest to pay, and monthly payments are usually over several years. You’ll also need to get a lender to approve you first too. It can be harder to buy a car with bad credit so, if your credit is on the low side, you may struggle to get finance. 

Set a realistic budget before jumping in. 

It does not matter if you are paying for a car with cash or finance, you will need to set a realistic and affordable budget. A monthly budget for car or van finance will need to be attainable. If your wage varies every month, you need to ensure you have enough money to cover the finance payments each month. When planning bad

your budget, you should also include running and maintenance costs too. Things like fuel, insurance, tax, MOTs and servicing are all needed to ensure your vehicle is legal and road worthy. 

Prove your earnings. 

It is quite common for self-employed workers to get paid cash in hand. However, if you are planning on buying your next vehicle with hire purchase finance, you will need to be able to prove how much you earn each month. In preparation for a finance application, we recommend putting any money you get into a UK bank account. To prove your income for finance, you may be asked to supply at least 3 months’ worth of bank statements to show you can afford finance. 

Set your vehicle requirements. 

Once you’ve decided how you’re going to fund your next car and set your budget, it’s time to think about what you need from your vehicle. As a self-employed business, you’re likely to have specific needs for your next vehicle. By outlining your requirements first, you can speed up the buying process and ensure you’re getting a vehicle which is fit for purpose. If you’re buying a van and carrying heavy loads, remember to check the payload of the vehicle. It’s illegal to exceed the payload of your vehicles, it terminates your insurance if you need to make a claim, and it puts pressure on your vehicle and can affect its lifespan.

 Think about fuel efficiency. 

Another factor to consider when buying a vehicle for your self-employed business is fuel efficiency. If you cover many miles on your daily commute, you’ll need a vehicle which doesn’t guzzle the fuel. Buying a bigger van will also affect how much you pay in fuel costs, as a bigger van is likely to be carrying a heavier load. Choosing a van size which is right for your needs can help to ensure you’re not wasting fuel.