Auto loans for Uber drivers – Car Loans

Taking an Uber instead of taking a taxi or public transit is becoming more and more popular for traveling back and forth to many of Canada’s major metropolitan cities.

Since taking an Uber costs a fraction of the price of a taxi, more and more users download the application on their smartphone and take advantage of the money they save. Because of this new boom, becoming a licensed Uber driver is a way to make a living for many Canadians.

The attraction of having a decent income and being able to work at their own pace motivates a flood of drivers to sell their old cars and get financed for a new model. Of course, many of them will need a car loan to do it.

If you’re thinking about being part of the growing Uber industry, the Lenos Potes team has some tips for you.


How to become an Uber driver

How to become an Uber driver

Unlike registering as an Uber customer, starting a career as an Uber driver is not as easy as simply downloading an application and filling out an information sheet. In order to qualify, an Uber driver must go through a few steps, including creating an online profile and finding an Uber Center, where a criminal background analysis will be done.

Potential drivers must also be at least 21 years old and undergo in-person training before they can actually start working. Some requirements also vary from city to city, such as the required driving license classification and approval standards for cars allowed to be used (age of car and how much mileage).


The costs of becoming an Uber driver

There are many benefits to being an Uber driver. You can work according to your own hours and choose where and when you want to take customers. You act as your own boss and can listen to your own music. On the other hand, the financial commitment is what dissuades most people to register.

As mentioned above, the qualifications for eligible cars vary from the city in which you are assigned and the type of Uber license you will get (UberX, UberXL, UberBlack etc.).

However, most of the time, the chosen vehicle must be less than 10 years old, have 4 doors, no aesthetic damage or have been rebuilt or modified in one way or another. Then, once you have purchased or started renting the vehicle, you will need to provide proof of inspection from a certified mechanic to your Uber Center.

Uber drivers must also pay for all other costs associated with the car. This means that the necessary expenses like gasoline, insurance, monthly payments and interest are paid out of pocket, not by the company as for the deposit with taxis. And, unlike taxi drivers, Uber encourages its customers not to tip their drivers. So, for the majority of potential Uber drivers, a car loan is the most affordable way to cope with the bulk of its expenses.


Unexpected expenses

car loans

You may be willing to pay for additional expenses such as gas and insurance, but have you thought of any of the following expenses that might not be so obvious?

  • The costs of repair and maintenance. The wear and tear associated with using your car as an Uber driver means that you will need to maintain your car on a regular basis and keep an eye out for any repairs or damages that need to be taken care of.
  • Used Vehicle Inspection Costs, If you plan to use a used vehicle as an Uber driver, in most provinces it is mandatory to have your vehicle inspected.


Get a car loan for Uber

Get a car loan for Uber

Uber has its own optional car rental program, in partnership with various car rental companies, such as Enterprise. However, in this case, drivers will probably pay more than $ 100 for a single week. Since the clientele can increase and decrease from one week to the next, getting a loan is probably the most practical and affordable option.

With the recent popularity of Uber, the company has launched its own form of loan, where drivers can finance a new vehicle through any of their third-party companies. Uber will offer special rates for better quality vehicles and free fuel for drivers who do not have good credit or who would not qualify for a loan from a typical lender or dealer.

The problem with Uber Financing is that anyone using the service will be charged a much higher interest rate than the average dealership simply because Uber is working with a third party to get the vehicle for you. Car payments will then be automatically subtracted from your salary on a monthly basis. This is where another drawback for financing your car through Uber comes in. Even if you pay for the service, this car still belongs to the company. You will probably have access to this one whenever you want, but customers or not, you always responsible for paying the Uber rate. Over time, you could end up paying more than the total value of the car, and it will not even belong to you.

So, getting a regular car loan to finance your own car can cost you less in the long run, especially if most of your income does not come from being an Uber driver. Not to mention that the car will be yours and you can use it as you please. Make sure you consider all the costs associated with the car before applying for a loan.

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