Auto Dealer Loans: Requirements for Approval
An auto dealer loan is an alternative to a loan from a bank or credit union, and may help you to buy a car regardless of your FICO score or other circumstances. Auto dealers are a good place to look for a bad credit auto loan when you can't find one from other sources, and may offer other additional perks and benefits that would not be available to you normally. If you want to get an auto dealer loan, it's good to know what will be expected of you before you apply. Be aware that you'll need to meet the following conditions for approval.
Proof of Employment
Getting a loan will require that you be currently employed, which helps assure auto dealers that you will be able to come up with the money regularly to repay the loan. You will need to be able to provide proof of employment. Some dealers may require that you have been employed at the same place for a certain minimum amount of time, usually no more than half a year. Appropriate proof of employment is a signed note from your employer (with contact information) or pay stubs for the previous six months.
As long as you have your pay stubs out, you should make sure they reflect a minimum income of at least $1000 take-home per month. Some auto dealers require that you make a minimum $1000 per month in order to receive a loan. This amount should be easy for anyone who works full time and makes minimum wage or better, but if you only work part time and make less than $1000 per month, you may want to contact the car dealership ahead of time to see whether or not there is a minimum income requirement.
Proof of Residence
As further security that you will pay back the loan as agreed, auto dealers need to see proof of residence. Some may require that you have lived in the same place for some minimum amount of time, usually around 6 months. Appropriate documents for proof of residence include a signed statement from your landlord (if applicable), bills addressed to your residence or a dated deed to your house.
As proof of identification, any lender, including auto dealers, will need to see an official state ID with a clear photo. This can be a driver's permit or license, or even a passport. School ID or ID from any source other than the state isn't acceptable for getting a loan.
These 4 requirements will need to be filled before you can get an auto loan from a car dealer. Other requirements may be enforced by specific dealers, as well. The best thing to do before you go in to apply for a loan is to ask about exactly what the requirements are. You should be prepared to present evidence for at least these 4 minimum requirements.