How to Buy a Car When You Don't Have Proof of Income | YourMechanic Advice

How to Buy a Car When You Don't Have Proof of Income

Schedule Pre-purchase Car Inspection
Service Area

$99.00

Upfront, Transparent Price
Average rating from 4,489 customers who received a Pre-purchase Car Inspection.

When you apply for a car loan, most lenders require proof of income. If you are unable to provide that evidence because you don’t have a job or are self-employed, your options are somewhat limited. However, it is still possible to buy a car even if you don’t have proof of income when you follow some specific steps.

Method 1 of 5: Pay in cash

Out of the options available for buying a car without proof of income, paying with cash is the easiest. Instead of going through the process of finding a willing lender and then providing either collateral or some way to assure a lender that you have the ability to pay, you just buy the vehicle outright. Of course, you have to still sign all of the necessary paperwork and pay taxes on the vehicle, but for the most part, once you pay for the vehicle it is yours.

Step 1: Save your money. The biggest part about paying with cash is saving up the money to do so. The easiest way to save is to put the money you have budgeted toward a car purchase into a savings account.

Step 2: Approach the dealership. Once you have enough money saved, approach the car dealership or private individual and offer to purchase the vehicle.

Make sure to complete all of the other necessary steps when purchasing a vehicle, including checking the vehicle history, taking the vehicle for a test drive, and having it looked at by a mechanic.

Step 3: Write a check. Once satisfied, write a check to the dealer or private individual to cover the entire cost of the vehicle.

california car title document

Then it's a matter of signing all of the necessary paperwork and transferring the vehicle title into your name.

Method 2 of 5: Look for a no-income verification loan

Many lenders are available to finance a car purchase, including those outside of your city or region. You can find many lenders online, giving you even more options for financing.

BBB rating page for nationwide

Step 1: Search online for auto loans. Look for reputable lenders with a good Better Business Bureau rating.

no income loan page

Step 2: Research different kinds of loans. Review the different loan products on sites such as AutoLoans to see which ones are more flexible and have no income verification requirements. These are often referred to as “no-income verification loans.”

Step 3: Apply online. Apply using any online tools that the lender provides. Some of the documents that lenders require instead of proof of income include:

  • Copies of your last two years of tax returns
  • A valid driver's license
  • Your Social Security Number
  • Proof of insurance
  • A copy of your latest checking account bank statement

Method 3 of 5: Save for a larger down payment

Lenders with more flexible terms often require you to have a larger down payment. This reduces their risk of you defaulting on the loan. In addition to using a trade-in, you can provide cash as a down payment.

Step 1: Pay more in cash. Offer a higher percentage of the down payment in cash, such as 10% or 20%. This gives the lender back more of the cash they invested in the loan up front, and it means you have less to pay off, making it more likely that you will do so.

cars.com 10000 dollar maximum

Step 2: Look for a price tag that’s under $10,000. Look for a lower-priced vehicle or even a used vehicle for under $10,000.

To do so, you can visit most car dealership sites online or sites like cars.com or auto.com.

When selecting the type of car you are looking for, select a maximum price of $10,000. This setup can work nicely as you have less to pay off, decreasing the chances that you might default on the loan.

Step 3: Accept a higher interest rate. Be willing to accept a higher interest rate or shorter loan term.

  • Note: A loan with a higher interest rate means more return on investment for the lender from the loan.

A shorter-term loan means that you should have it paid off quickly.

Method 4 of 5: Use collateral

Many lenders ask for pay stubs to verify your income. In instances such as this, you can offer collateral in the form of items worth close to, or exceeding, the vehicle you wish to buy.

Step 1: Prepare your collateral. To use collateral, you first need to show ownership of other assets you can use as collateral. Items that you can use as collateral include:

  • Automobile titles
  • Real estate deeds
  • Cash account statements
  • Machinery and equipment receipts
  • Investment statements
  • Insurance policies
  • Valuables and collectibles
  • Any future payments from your customers if you own a business

  • Tip: If you don’t have a job but are able to pay back the loan through other means, such as alimony or disability payments, you need to prove that documentation as well. It often helps to have several months of car payments in the bank or a savings account with a substantial balance.

If you plan on using a piece of property or another vehicle as collateral, the lender will take out a lien. This gives the lender the right to keep your property if you default on the loan.

  • Warning: Keep in mind that, according to federal law, you have up to three days to cancel a loan without penalty. When cancelling a loan, remember that business days include Saturday, but not Sunday or a legal public holiday.

Method 5 of 5: Get a co-signer

A co-signer is another way to get a loan without having to show proof of income. But make sure to pay off any loan you have a c-osigner for, or they will be responsible for what you owe on the loan.

cosigner agreement

Step 1: Find a responsible co-signer. Ask a family member to cosign the car loan with you. Make sure they have proof of income and are willing to be a cosigner. A cosigner is someone who is responsible for your loan if for some reason you fail to pay.

Make sure your co-signer is aware of his or her responsibilities. Some co-signers may not know that they are going to be held responsible for the amount you borrowed if you do not pay on time.

Step 2: Find a lender. Find a lender who is willing to accept a co-signer as the sole means of income for your loan. Keep in mind that the lender will do a credit check on the co-signer, so find someone who has good credit to cosign for you.

Finding a lender to give you a loan on a car when you have no proof of income might seem impossible, but luckily you have a few options you can fall back on. These standby methods include finding a cosigner, using collateral, paying a higher down payment, or paying for the vehicle outright. Just remember to have the vehicle inspected before buying it.


Next Step

Schedule Pre-purchase Car Inspection

The most popular service booked by readers of this article is Pre-purchase Car Inspection. Yourmechanic’s technicians bring the dealership to you by performing this job at your home or office 7 days a week between 7AM-9PM. We currently cover over 10k cities and have 100k+ 5-star reviews... LEARN MORE

SEE PRICING & SCHEDULING

The statements expressed above are only for informational purposes and should be independently verified. Please see our terms of service for more details

Recent Pre-purchase Car Inspection reviews

Excellent Rating


YourMechanic Pre-purchase Car Inspection Service

Average Rating

4.9/5

Number of Reviews

4,489

Rating Summary
4,177
170
35
34
73
4,177
170
35
34
73

Jason

14 years of experience
116 reviews
Jason
14 years of experience
Toyota Corolla - Pre-purchase Car Inspection - Jamaica, New York
I recommend Jason. I know little about cars and needed him to check out a car for me. Jason did a pre purchase car inspection for me. He explained what looked good and what looked to be of concern about the car. If it was a concern, he explained what needed to be done to get the car in good shape before the purchase. He had all the equipment to check out the car. I would book him again for any other services as he knows what he's doing and is friendly.
Kia Rio - Pre-purchase Car Inspection - Brooklyn, New York
Jason did a thorough job inspecting a car I was considering buying and answered all my questions after the inspection

Willie

23 years of experience
38 reviews
Willie
23 years of experience
Toyota 4Runner - Pre-purchase Car Inspection - Cerritos, California
Williec was definitely professional.and I would use his services again.He is very honest and was very thorough with inspecting the vehicle I purchased.Thank you Willie.
Mitsubishi 3000GT - Pre-purchase Car Inspection - Long Beach, California
Mechanic was professional and knowledgeable about cars. His recommendation was excellent and appreciated. I would definitely recommend this mechanic to others.

Attila

18 years of experience
566 reviews
Attila
18 years of experience
Volvo XC70 - Pre-purchase Car Inspection - Plainfield, New Jersey
Attila was very throughrout with the inspection of the car and confirmed my suspicions about the breaks
Volkswagen Jetta - Pre-purchase Car Inspection - Englewood, New Jersey
Mr. Attila is very knowledgeable about cars and he gave me good advice for future reference. Very kind and nice!

MICHAEL

32 years of experience
164 reviews
MICHAEL
32 years of experience
Ford Fusion - Pre-purchase Car Inspection - Huntingdon Valley, Pennsylvania
Michael was enjoyable to talk to. He gave me an honest, non-bias opinion of the vehicle I was considering buying. I was an out of state buyer, so having someone to rely on was important. I loved the pictures and the audio he included in his report, it was through. He pointed out a few things the dealer failed to bring up. Because of him I am deciding to move forward with the "deal"

Need Help With Your Car?

Our certified mobile mechanics make house calls in over 2,000 U.S. cities. Fast, free online quotes for your car repair.

GET A QUOTE