In QC, what should I know about self-employed borrowers for car loans?

For self-employed individuals in Quebec seeking car loans, lenders require a comprehensive financial picture to assess income stability and repayment capacity. This typically includes at least two to three years of personal tax returns (T1 General) and corresponding Notices of Assessment (NOAs) from the Canada Revenue Agency (CRA). If operating as an incorporated entity, corporate tax returns (T2) and financial statements are also crucial. Lenders scrutinize these documents to verify consistent income, as self-employment income can fluctuate more than traditional salaried employment, presenting a higher perceived risk. Consequently, self-employed borrowers may face stricter approval criteria, potentially higher interest rates, or be required to provide a larger down payment compared to salaried employees. This is a common practice across Canada, including Quebec, reflecting the lender's need to mitigate risk associated with less predictable income streams. To strengthen an application, it's beneficial to demonstrate a strong personal credit score, a well-established business history (ideally 2+ years), and a robust banking history showing consistent cash flow. In a competitive market, such as anticipated for 2025, lenders may be even more selective, making a solid financial presentation paramount. Understanding these requirements and preparing thorough documentation is key to navigating the auto finance process successfully as a self-employed individual in Quebec.