Can You Get a Car with Bad Credit and No Job?

Get Car Financing
Even with poor credit.

By

Contributing Writer

David Topham covers the automotive and auto finance industries as the Content Manager of Auto Credit Express who also contributes to CarsDirect. He was born and raised in Michigan and is a graduate of Michigan State University.


, Contributing Writer - November 30, 2016

If you have bad credit and no job, it can be more difficult to get approved for an auto loan. If you have the money to buy a car with cash, you can go about the car buying process as usual. But if you need auto financing, it will be more challenging to get approved.

For starters, bad credit makes it more difficult right off the bat. The majority of traditional lenders like banks and credit unions will not approve applicants with poor credit for auto financing. Instead, you will have to find a special finance dealership that has subprime lending connections.

These lenders are willing to work with consumers dealing with credit issues, but they still have requirements that you need to meet. Typically, one of these qualifications is a minimum gross monthly income of $1,500-$1,800 (before taxes are taken out). Also, subprime lenders need at least a portion of that income to be garnishable.

This is why, if you do not have a job, your chances of getting approved are not very good. You still need to have a regular income, and most fixed income sources are not garnishable.

Other Sources of Income

If you do not have a job and are still interested in applying for a car loan, chances are that you have another source of income that you receive every month. Special finance lenders will consider fixed sources of income when they are evaluating your application.

Examples of fixed income sources that can be considered are: disability, social security, court-ordered child support or alimony, settlements, veteran's benefits, pensions, earnings from investments/deposits, etc.

While unemployed individuals with good credit and a fixed income source may have no trouble getting the green light, people with bad credit typically have no such luck. This is because subprime lenders also need to verify your income before they will approve a loan.

From their point of view, bad credit represents more risk. They want to carefully verify that you have the ability to repay the loan because of this added risk. Also, they want your income source to be garnishable in the event the loan goes into default.

However, most fixed income sources cannot be garnished, which is why people with bad credit and no job have a difficult time getting approved. But there is still a way you can get the lender to say "yes."

How to Get Approved for a Car Loan with Bad Credit and No Job

Once you locate a special finance dealership that works with applicants with bad credit, you will sit down with their finance manager. This person will want to know how much you get from your fixed income source every month, to ensure you meet the minimum income requirement, and, also, if it is your only source of income.

If your income source cannot be garnished, the only way that you will be able to get approved is to have a cosigner. Your cosigner has to: (1) have good or great credit; (2) meet the lender's minimum income requirement and have the disposable income to be able to handle the loan; and (3) have a garnishable source of income.

If your cosigner does not meet these three requirements, you might have to drop the idea of financing a car at this time. A solution would be to take steps to improve your credit before applying, as "regular" lenders don't care as much about your source of income.

If you are ready to apply for auto financing but can't seem to find a dealership that can work with your situation, CarsDirect has the solution. We can match you with a dealer in your area that specializes in car loans for all credit situations. Our service is free and our process is fast, so get started today by completing our easy 1-Step Auto Loan Application.

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, Contributing Writer

David Topham covers the automotive and auto finance industries as the Content Manager of Auto Credit Express who also contributes to CarsDirect. He was born and raised in Michigan and is a graduate of Michigan State University.


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