null Does My Employment Status Impact My Ability to Buy a Car?
If you’re someone with bad credit or no credit who is looking to
purchase a vehicle, you will almost certainly need to provide proof of
income to get approved for financing during the car-buying process.
Why? Because banks and auto lenders want to verify that you are able
to cover your monthly car payments. Below we’ve outlined the proper
income documentation to provide based on employment status.
Buying a Car as a W-2 Employee
If you’ve listed a place of employment on your credit approval
application, you’ll likely need to provide pay stubs from your weekly,
bi-weekly, semi-monthly or monthly paychecks as proof of income. You
may also provide copies of your bank statement. Employer information
to provide includes the employer name, physical address, phone number
and hire date.
Buying a Car while Self-Employed
While being self-employed with bad credit or no credit can make
getting approved for financing a little more difficult, submitting the
proper documentation to subprime finance companies to verify your
income can help improve your chances of getting credit approval. Since
self-employed workers don’t receive a W-2 form for tax purposes, be
prepared to provide copies of your tax returns or a 1099 if you work
as an independent contractor. You may also provide copies of your bank
statement. Additional information to provide includes the name of the
business or occupation, as well as the business city and state.
Buying a Car with a New Job or Temporary Employment
Although most subprime finance companies may require you to have been
at your current employer for at least six months, being new to your
job or temporarily employed doesn’t necessarily disqualify you from
being approved for financing with bad credit or no credit. If you have
a steady, verifiable income, even if it’s from a supplemental source,
you can still be considered for credit approval. In fact, Credit
Acceptance’s subprime auto finance program has no minimum job time
requirement to qualify for credit approval, and even enables dealers
to approve credit-challenged car buyers with temporary employment.
Additional information to provide for temporary or contract employees
includes the placement agency name, address, phone number, and hire
date, as well as the name, address and phone number where you
currently report to work.
Buying a Car on a Fixed Income
If you only have a fixed income such as social security, qualifying
for vehicle financing can be difficult because your wages aren’t able
to be garnished, meaning they are unable to be used for debts such as
unpaid taxes, fines, car loans, etc. However, you may be able to
provide your award letter from social security as proof of income. If
that still doesn’t help you qualify, you may want to consider getting
Credit Acceptance is a subprime auto finance company that works with
more than 12,000 participating car dealers across the U.S. to help car
buyers with bad credit or no credit get approved for vehicle
financing. If you are currently in the market to purchase a vehicle
and need approval, fill out the form on our website to start your
credit approval today!