Do I Need Verification of My Income to Buy a New Car?

It's up to lenders to determine whether a new car buyer needs a verifiable income to purchase a vehicle. Your credit score and the amount of your down payment also affect whether a verifiable income is necessary. In any case, it will likely be harder to buy a new car without a verifiable income.

Lenders

People who can't pay for a new car without getting a bank or credit union loan usually need to have an income that a lender can verify with an employer. Lenders also verify incomes by checking tax returns or paycheck stubs. Dealerships and other auto lenders who are willing to provide loans without verifying a buyer's income will likely charge high interest rates and require big down payments. Large down payments protect lenders because they prevent situations in which buyers owe more on their car loans than their cars are worth.

Employment History

Lenders also consider the amount of time car buyers have worked with an employer to determine if they have steady incomes. Most lenders require buyers with low credit scores to show they've had at least 90 days of steady employment, according to Cars Direct. An exception to that may occur if buyers who have worked with an employer for a shorter time can show they previously had a stable employment history. Stable employment typically means buyers don't have any long periods of unemployment in their most recent work history.

Credit Rating

Borrowers who fall into lenders' subprime category usually have a difficult time getting new car loans without income verification. The Edmunds auto information website indicates that subprime borrowers should expect to present a paycheck stub to show a lender how much they earn. Subprime borrowers are people who have credit scores of 619 and below, according to Edmunds. A down payment of at least 20 percent may help subprime borrowers qualify for a new car loan if they have a verifiable income.

Considerations

You should ask a lender why you didn't qualify for a new car loan if your loan application isn't accepted. You can then work on whatever you need to do to qualify later. For example, you might get a loan if you provide a higher down payment, even without a verifiable income. You also should consider shopping in the used-car market. The prices of used cars are lower, so you may be able to pay for a used car with cash to avoid the need for a loan and income verification.