How to Buy a Car When Self Employed
by Anonymous
(North Carolina)
The new car I am looking at is around 39,000, I plan to put down 8,500 down and I have a 620 credit score.
I need to know where to go for a good rate. Capital One approved me, but wanted 2 years tax returns and I only have 1 because the other was extended. I am self employed, is this a normal thing?
I only checked with 1 local bank, but they declined and I just did not want to keep going bank to bank and keep taking hits on my credit. I don't want the credit inquiries lower the score? Thanks
Answer: Hi,
Buying a car when self employed can make things a bit tricky especially with a 620 credit score and only one years tax returns.
Lenders typically do want to see 2 years tax returns for the self employed (especially if only self employed for a short time) but will waive that requirement for people with really strong credit.
Your credit score alone only tells me a small portion of what I need to know here about your credit, but the well paid auto loan you had before and your solid down payment certainly help your situation.
I would think your best bet is going to be to try and get approved with one of the manufacturers financing arms as they (depends on which one) tend to be a bit less picky when it comes to things like tax returns.
They may be willing to use the one tax return you do have and ask to see 3-6 months bank statements to make up for the lack of the other one.
They may even waive that requirement altogether!
To apply for the manufacturers financing however you'd need to apply through the dealer. That's not a big deal though as you'll want their help.
If the vehicle you are looking to buy is from a private party, then you're probably going to have to jump through some hoops.
What I would suggest here is to call a bunch of different local lenders (credit unions may be best) until you find one that works and ask what their requirements are for self employed individuals. Do this before they pull credit.
Outside of calling around town, I can't think of any online lenders that won't ask for 2 years tax returns.
Hope this helps you to buy a car...
Justin
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