How to Get a Car Loan without a Job

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Even with poor credit.

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


, - January 6, 2020

Getting a car loan without a job is no easy task, but as long as you have some form of income and visit the right type of lender, it might be possible to get approved. However, even with these things, you may find some roadblocks to getting a vehicle without a job.

Income Is a Must

You’re not automatically excluded from getting an auto loan without a job. If you don’t have traditional W-2 income, you have to have taxable income that covers your monthly loan payment. Not all forms of income are acceptable, and some, such as unemployment, never are.

When you’re working with a traditional lender and have good credit, your source of income may not be as important for loan approval. However, as a bad credit borrower, you must have earned income to even be considered for a loan. Generally, you work with a subprime lender, where income and employment play equal roles in your chances for approval.

Subprime lenders – lenders that are willing to work with bad credit – typically require borrowers to make at least $1,500 to $2,000 before taxes, from a single source.

They prefer this to be W-2 income, and require you to have held your current job for at least six months, though a year or more is ideal. You’re also required to have a three-year job history with no major gaps (over 30 days) in employment.

Getting an Auto Loan without Employment

When a steady job isn’t your main source of income and you’re struggling with credit issues, you may find that you need to work with an in-house lender. These lenders, better known as buy here pay here (BHPH) dealerships, aren’t as concerned with your employment, as long as you can afford the loan payments.

BHPH dealers are lenders as well, so things work a little differently than they do with a traditional or subprime lender. When you’re purchasing a car at a BHPH lot, your selection is limited to the used vehicles they have available. Though selection depends on the dealership, you may find a diamond in the rough if you shop around.

Not only do many BHPH dealers overlook your source of income, they also aren’t as concerned about your credit as other lenders are. However, because of this, you’re usually required to make a down payment – sometimes as much as 20% or more of the car’s selling price.

Additionally, you should expect a higher interest rate as a bad credit borrower, but interest rates at BHPH lots are likely to be higher still.

The Bottom Line

Even though it may be possible to get an auto loan without a job, it’s not easy to do. If you do, you may end up with a high down payment requirement, and you’re likely to have a higher than average interest rate. If you have bad credit, loan approval with a subprime lender without earned income just isn’t possible.

When you get your income and employment situation moving in the right direction, you’re going to need to find the right type of lender. Whether it’s a subprime lender through a special finance dealership or a local BHPH dealer, we want to help you get connected to the right place to start your next car buying experience.

At CarsDirect, we have a nationwide network of dealerships that want to help you get what you’re looking for in your area. To get the process started, simply fill out our fast and free auto loan request form now!

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


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