So, You Need a Vehicle for Delivery Work?

Whether you're planning to drive for Uber, deliver for SkipTheDishes, or start your own local courier service, one thing is certain: you need a reliable vehicle. If you don't have one, or if your current car isn't up to the task, you'll need to explore financing. But getting a car loan when your income comes from gig work isn't quite the same as getting one with a traditional 9-to-5 paycheque. Let's break down what you need to know.

Why is Financing for Gig Work Different?

When lenders review a car loan application, they're looking for stability and predictability. Traditional employment with a steady salary is easy for them to understand. Gig work, on the other hand, can have fluctuating income, which makes some lenders a bit nervous. They're trying to answer one main question: can you reliably make your payments every month?

They'll also consider the extra wear and tear your vehicle will endure. More kilometres driven means faster depreciation and a higher chance of mechanical issues, which can impact the vehicle's value and your ability to work. This added risk is why the approval process can feel a little more intense.

What Lenders Look for in Delivery Drivers

To get approved, you need to show lenders that you're a good and reliable investment. Here's what they'll focus on:

• Proof of Consistent Income: This is the most important piece of the puzzle. You can't just show a single great week of earnings. Lenders want to see a history of consistent income over several months. Be prepared to provide bank statements, earnings summaries from your delivery app, and any T4A slips from previous years.
• A Good Credit Score: Your credit score is a snapshot of your financial reliability. A higher score shows a history of paying bills on time, which tells lenders you're likely to do the same with your car loan. While you can still get financing with less-than-perfect credit, a stronger score will get you better interest rates.
• A Solid Down Payment: A significant down payment reduces the amount you need to borrow. This lowers the lender's risk and shows them you're financially committed. It also results in a smaller monthly payment, which is easier to manage with a variable income.
• The Right Vehicle Choice: Lenders are more likely to finance a newer, reliable vehicle with lower kilometres than an old car that might break down. A dependable vehicle means you can keep working and making your payments.

Steps to Get Approved for Your Delivery Vehicle Loan

Getting a 'yes' from a lender is entirely possible if you prepare properly. Follow these steps to put your best foot forward.

1. Organize Your Financial Documents

Before you even start looking at cars, gather all your income-related paperwork. This includes at least three to six months of bank statements showing your deposits, your notice of assessment from the Canada Revenue Agency (CRA), and detailed earnings reports from your gig work platform.

2. Know Your Credit Score

Check your credit score for free through services like Borrowell or Credit Karma. If it's lower than you'd like, take some time to improve it by paying down balances and ensuring all your bills are paid on time. Fixing any errors on your credit report can also provide a quick boost.

3. Save for a Down Payment

Aim to save at least 10-20% of the vehicle's purchase price. The more you can put down, the better your chances of approval and the lower your interest rate will be. It demonstrates financial discipline and makes your application much stronger.

4. Work with the Right Lenders

Many traditional banks can be hesitant to approve loans based on gig economy income. The key is to work with dealerships and lenders who specialize in these situations. They understand the nature of self-employment and contract work and have programs specifically designed to help you get approved. They know how to properly assess your income and look at the bigger picture, not just a single pay stub.