| Hi Taylor
- I need to buy a car but don't currently have income (job will
come once I've got wheels!). I have really good credit and I'm wondering
if I can make this work without getting swindled by the lender.
Hi Jason - This feels like a tale as old as time. You can't work
without a car, but lenders don't want to give money to someone who
isn't already working. It can be done, and good credit is important,
but you should make sure to explore every option before taking on
local. It's not risk-free, but buying a used car from a friend
or family member might save you a lot of time and money. If this
car really will guarantee you work, you can get away with an older
vehicle that gets you to and from your new job enough times to
earn a paycheck and provide proof of income for a future car loan.
Ask around, post about it on Facebook, check the public boards
in coffee shopsmake sure to exhaust your neighborhood search
before you go to a dealership.
2. Build up your downpayment. A good credit score usually
helps people avoid paying too much up front, but without proof
of income, you might need to put a significant amount of money
down to keep your interest rate and monthly payments respectable.
Since you're currently without work, saving up a big chunk of
money might not be an option. If you don't already have the cash
reserves, maybe a family member can float you a small amount to
be paid back as soon as you start the new job. Good credit is
important, but lenders will probably be a little wary of you if
you have no income and can't put meaningful money down.
3. Go through a bank. There are a lot of horror stories
of people not seeing proof of approval from the dealership, then
finding out later the terms of the loan were different and much
worse than expected. If possible, getting approved for a loan
through a third party bank will take the uncertainty out of the
equation and protect you from any predatory practices. Banks aren't
all that eager to lend to someone with no proof of income, but
it might work if you already have a relationship with that business.
| You're not
in an enviable situation, but I'm sure you can make the best of it.
Just be thorough in your car search and stay away from any lender
who's not willing to be fully transparent with you. Good luck, Jason!
Information presented is for educational purposes only and is not
an offer or solicitation for the sale or purchase of any specific
securities, investments, or investment strategies. Investments involve
risk and, unless otherwise stated, are not guaranteed. Be sure to
first consult with a qualified financial adviser and/or tax professional
before implementing any strategy discussed herein. To submit a question
to be answered in this column, please send it via email to Question@GoFarWithKovar.com,
or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901.