Do Dealerships Verify Employment History?

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Content Manager

Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

, Content Manager - September 7, 2020

When you apply for a car loan, the lender you’re financing through, not the dealership, is the one that verifies your employment history. The lender may confirm your work history, or even your current employment. Here’s what they're looking for when it comes to your job history.

Employment and Car Loans

One of an auto lender’s biggest concerns is how you’re going to repay the car loan. Whether you’re buying from a private seller or a dealer, your lender is going to ask about your income sources, how long you’ve held your job(s), and likely even ask about your work history for the past three years.

If you have less than perfect credit, bad credit lenders typically require that you’ve held the same job for around six months to a year. As far as your overall work history, bad credit lenders may also require that you’ve had consistent employment for three years without large gaps between jobs – typically meaning 30 days or more.

Verifying your work history could mean calling your past employers or looking at your credit reports. Often, your credit reports contain your personal information as well as your employment history. Or, the lender may even ask you to bring your past tax returns to verify your income and job history.

Why Do Auto Lenders Check My Work History?

When it comes down to brass tacks, lenders like to see stability in their borrowers. This is due to the fact that borrowers with proven stability who have lived in the same area for a while, or those who’ve held down the same job for a few years, are more likely to make their monthly payment.

Stability is a good indication that the auto loan is going to be repaid. Therefore, having a stable work history and enough income from that workplace is a great way to boost your approval chances for a car loan.

Will a Job Letter Count?

For the most part, lenders question a job letter as proof of income. Without a computer-generated check stub, expect lenders to be hesitant to approve you for an auto loan with just a job letter.

However, if you only have a job letter, some lenders may be more willing to finance you if you have good credit and have had a stable work history. All lenders vary, and it doesn't hurt to ask about specific requirements before you apply.

With bad credit, though, lenders are likely to turn you down for financing with just a job letter. Subprime lenders need proof of income in the form of computer-generated check stubs, or proof of income with tax returns and/or bank statements if you have anything other than W-2 income. If your credit score isn’t the best, they require hard proof that you’re able to take on a bad credit car loan.

New Job and Need an Auto Loan

If you’re new at your job but you need a vehicle now, it may be somewhat difficult to find a lender that can assist you. Borrowers with a brand-new job can be perceived as risky to a lender, especially if your credit is worse for wear.

One thing you can do to improve your chances of getting in an auto loan with a new job is to give yourself some time. However, if that isn’t an option and you need a car to get to this new job, a buy here pay here (BHPH) dealership may be your next step for a temporary solution.

BHPH lots use in-house financing, so your dealer is the lender. They normally skip reviewing your credit reports, and may not be as concerned with your work history as long as you can prove your income. They’re often a go-to way for borrowers to get into a vehicle with a poor credit score.

The BHPH dealership may or may not verify your income by calling your employer – they vary greatly. They are, however, going to require a down payment. The down payment requirement is sometimes around 20% of the car’s selling price.

Again, every BHPH dealer’s requirements are likely to vary, so it doesn’t hurt to call around and ask what options you have before you head out to one in person.

Ready to Get Car Shopping?

Income and employment history are very important stipulations you need to meet to be considered for an auto loan approval. Having no income is usually a deal breaker for a lender. While work history requirements vary, they prefer borrowers with a stable employment track record.

Your credit score can also determine what type of lender or dealership you should choose to look for a vehicle with. If you don’t know where to start the search for your next car, we’ve got you covered.

Here at CarsDirect, we have a nationwide network of dealers that are signed up with bad credit auto lenders. Instead of driving all over town and looking for a lender for your credit situation, fill out our free car loan request form, and we’ll do the searching for you.


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, Content Manager

Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

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