Most traditional car dealerships and financial institutions prioritize steady employment when assessing eligibility to borrow. Unemployment benefits, often seen as temporary income, don’t meet many lenders' requirements.

This distinction can limit your options, as most auto financing is designed to last much longer than unemployment benefits typically do.

Boosting your approval chances

Even if you’re unemployed, there are ways to strengthen your application and chances of approval:

• Provide alternative income proof: Lenders may consider income sources such as Social Security payments, pensions, disability benefits, or child support

• Make a larger down payment: Reducing the needed amount lets the lender know your financial commitment

• Explore cosigner options: A cosigner with steady income and good credit can significantly benefit your application

Risks and considerations

It’s important to approach the car buying process carefully while unemployed. Here are some key things to keep in mind:

• Higher interest rates: Financing for the unemployed often have higher interest rates that increase the overall vehicle cost

• Shorter financing terms: Lenders may require an abbreviated repayment schedule to mitigate their risk, which could result in higher monthly payments

• Financial stability: Taking on auto financing without consistent income can strain you. Be confident in your ability to make payments before you commit.

Exploring a Buy Here Pay Here (BHPH) dealership

BHPH dealers are car dealerships that may accept unemployment and provide financing options to those buyers. A key feature of BHPH is the relaxed approach to credit checks; poor or nonexistent credit scores are typically not a barrier. Some BHPH dealerships may even consider unemployment benefits as a source of income. While these dealerships can provide a path to ownership, carefully review their terms to make sure they align with your situation.

Other options to consider

If traditional or BHPH dealerships don’t meet your needs, you can also explore financing through an indirect lender like Credit Acceptance. With over 15,000 dealerships in our network  nationwide and can approve those who are unemployed.

If you have some savings in the bank, you could also consider paying cash for the most reliable used car in your budget. While it may not be your dream vehicle, it doesn’t have to be your “forever” car. It can be your “right now” ride until your income is stable or you’ve saved a substantial down payment.

Don’t let unemployment keep you from car ownership

Although unemployment can make car-buying more challenging, it doesn’t eliminate your options. If you’re out of work and need a vehicle, Credit Acceptance may be able to help — see what amount you can pre-qualify for today. Looking for a job can be stressful but securing auto financing doesn’t have to be.