What Does it Mean to Be a Reference for Someone Buying a Car?

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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.


, - September 17, 2019

One of the requirements that lenders have for bad credit car buyers is a list of personal references. These references serve as a verification point for lenders, and may or may not be called upon for information. If you're thinking about financing a vehicle with poor credit, you have to provide this, and let your references know what to expect.

Why Do Lenders Use Personal References?

Lenders, specifically subprime lenders that work with bad credit borrowers, use references to verify that you live where you say you do, and that you are who you say you are. It's also a way to make sure that the car you’re financing is where you say it is.

Lenders might not contact them right away, but they like to have personal references on file in case they need to.

What Information Is Required about References?

When you list someone as a reference you're typically asked to list some basic information about them, which can vary by lender. Generally, lenders ask that you provide five to eight personal references, complete with names, addresses, and phone numbers – including both home/cell and work numbers. Some lenders require email addresses, as well.

References can be friends, family, or co-workers, and cannot live at your address. Additionally, bad credit lenders typically don't want any two references to be listed under the same address. Some lenders require two or more of your references to be family members, but others do not.

What Are References Responsible For?

Don't worry, lenders aren't going to ask for sensitive information such as income, or other personal info, but they can use your references to verify that your address or phone number is correct. References should be able to verify some basic information.

Being a reference for an auto loan isn't going to affect your reference in any way – they don't need to worry about being responsible for the loan, and it won't affect their credit. Personal references are simply responsible for answering questions when a lender calls.

Only One of Many Requirements

References are only one of the requirements that subprime lenders rely on to help them offer financing to credit-challenged car buyers. Other things lenders use beyond credit scores alone are income, employment, residence stability, and a down payment.

Besides bringing a list of references to the dealership with you when you're applying for an auto loan, you should also be prepared with the following:

  • A valid driver's license
  • Proof of income
  • Proof of residence
  • Proof of a working contract or landline phone

Find the Right Dealer

Having all the things a lender needs to get you approved, including a list of references, is helpful when you get to the dealership – so is going to the right dealer from the get go.

Not all dealerships work with lenders that know how to help people who struggle with credit issues. Avoid the hassle of searching for the right dealer by filling out our fast, easy, and free car loan request form, and let CarsDirect connect you to a local dealership that has the lenders you're looking for. Get started right 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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