It would be nice if everyone who needed a car could walk into a dealership and get a loan that fit their budget and drive off in their newly purchased vehicle. However, loans are never quite that simple. Different scenarios affect a person’s ability to buy a car, and often, the formula many lenders use make it difficult for people who don’t perfectly fit the requirements. One of these scenarios is employment history. What happens if you don’t have a history of employment? This is one of those situations that can make it difficult to purchase a ride.
No Job, No Car? Not Necessarily
It can feel overwhelming to be told no on a regular basis when you are trying to purchase a car. Especially if that car is what stands between you and employment. Before you give up, there may be some ways for you to get into a vehicle. They are:
- Have good credit – Just because you don’t have employment doesn’t mean you can’t work on good credit. Maybe you’re a student, or someone who works small jobs. Whatever the case, do the things necessary to have a good score. This can include getting a secured credit card, having a student loan you pay for regularly or another type of loan that you pay on-time. The key is not to have any collections, to have some sort of loan or credit card and work on building a positive credit profile. If you have that good score and report, find creative lenders who know how to work around no income.
- Have some source of income – For some lenders it’s not about a lengthy job history, just that you have one. Take a job, even if it’s only part-time, and get a few paychecks under your belt. Open a bank account if you don’t have one and show that you can deposit and withdraw money in a responsible manner. The key is to get a job that gives you regular pay stubs.
- Try in-house financing - In-house financing is a great option for anyone who doesn’t have a “typical” financing situation. It is the buy here, pay here option. Because it is far more personal—meaning they can get to know you—they may be able to offer you things the typical lender can’t. There are no banks involved, simply a dealer who wants to help if they can.
- Get a cosigner – Another option for financing with no employment history is using a cosigner. A cosigner is basically someone who lends their good name. They generally have good credit, ample income and everything a lender wants to see in order to approve a loan. One thing to note though, is that whoever cosigns can be affected (credit-wise) should you default or pay late on your loan. It’s essential only to enter a cosigning situation if you’re sure you can afford a car. It’s also important to choose a car you can afford. This means you should be able to cover not only the monthly payment, but also the gas, insurance and maintenance.
Bad Credit and No Employment History
This is probably one of the most challenging scenarios to deal with when trying to find an used auto loan. If you already have bad credit, you’re considered a high risk. If you have no income, it makes you even riskier. This is one of those situations where it won’t be as easy to find a lender willing to approve a loan. However, there are a few ways you may be able to make it work.
First, consider finding a job and getting three to four months of income and job history. If you are without a car, look for something nearby or on a public transportation line so you can get to and from work easily, or carpool/get a ride.
Another option is having an ample down payment. If you are able to give a substantial amount of the value up front, a lender may be more willing to consider you. You may already have the funds on hand, but if you don’t, find creative ways to put together a good chunk of money. This could mean selling things you don’t need anymore, or working online jobs that aren’t considered typical income.
Lastly, the cosigner route is another option. But as stated above, don’t use a cosigner if you don’t have a way to pay for your loan.
Getting a loan isn’t always as easy as people would like it to be. Sometimes you have to jump through hoops, or take a different approach to be able to buy a car, especially if you have no employment history. But don’t throw in the towel too easily—with a little effort and creativity, you’ll have your new ride in no time.
