Auto loans what to do when you're self employed?

[KAISMOM]

I've always bought my cars used, paid in full (currently I own a Saturn LS 2000 sedan) but decided either mid 2013, or end of 2013 to buy new or nearly new. (I also plan to start saving for a DP for a condo/house so trying to sock money away too) I'll have 3k as a DP, plan on buying a subcompact no more than 23k, hope to borrow on no more than 18k after DP. My question pertains to what finance companies look for aside from Fico's (currently at 667...shooting for 699+ to get lower interest from the onset) I expect to make between 50k-60k gross for 2013, but this years taxes will say I make 30k, plus child support, so roughly 34k based on my earnings in 2012.  Any advice would be appreciated!

NOTE: By mid 2013 my CC utilization should be <5%, current on all my student loans..., hope to bump my fico to 700 (here's hoping!) I'm on a good trajectory after screwing with my credit, and being inconsistent for a time.

[martinkk]

I've been self employed since the 80's. I just always filled out credit apps with the name of our company, my position and salary. Any time that anyone has asked for proof of income, I just show them our tax returns. No one has never asked for proof for a vehicle, though (real estate, yes)  and I have financed through GMAC, local banks, FMC, and Cap1.

Edited to add:  I never listed my position as Owner either, I listed as general manager or office manager, whatever capacity I was filling at the time.

[tisch0791]

I actually JUST went through this.  I had two different scenarios. 

1.  My credit union - I already have one open loan with them and have had others over the years.  But never had self employment to claim until this time.  When the app was submitted, they asked for two years of tax returns.  However on the returns my business income showed as zero.  Regular income was $78K.  I told them the information was outdated as well, since it's December and the returns show income from 2010 and 2011!  We had a HUGE increase in business this year.  And of course your business writeoffs can vary tremendously each year.  Anyhow, after a few headaches, they approved the loan for 35K at our requested terms and an interest rate of 3.49%.

2.  Capital One - I called them before apping and told them regular and self employment would be included on the app.  They told me to list "self employed" as primary income.  I followed their instructions and they asked for 3 months of personal bank statements to show consistent deposits from both business and regular income and ONE pay stub from the regular employment.  All I had to to was fax/email the documents and they finalized the approval.  They approved us for 38500 at our requested terms and an interest rate of 3.65%.  It was SO much easier!

Oh and so far, I have only seen one hard pull from Cap One on my credit.  It's possible since I'm already with the credit union they only did a soft pull.  So that was nice to see.

I hope this helps you out a little bit - Merry Christmas!

Now we will use these approvals at the dealer to have them beat the offers.  I'm so excited to go car shopping!

[CreditScoreBlueprint]

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@KAISMOM wrote:

I've always bought my cars used, paid in full (currently I own a Saturn LS 2000 sedan) but decided either mid 2013, or end of 2013 to buy new or nearly new. (I also plan to start saving for a DP for a condo/house so trying to sock money away too) I'll have 3k as a DP, plan on buying a subcompact no more than 23k, hope to borrow on no more than 18k after DP. My question pertains to what finance companies look for aside from Fico's (currently at 667...shooting for 699+ to get lower interest from the onset) I expect to make between 50k-60k gross for 2013, but this years taxes will say I make 30k, plus child support, so roughly 34k based on my earnings in 2012.  Any advice would be appreciated!

NOTE: By mid 2013 my CC utilization should be <5%, current on all my student loans..., hope to bump my fico to 700 (here's hoping!) I'm on a good trajectory after screwing with my credit, and being inconsistent for a time.

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I had to deal with this situation 7 months ago. I was worried because I put most of the money I make from my business back into the business to further fuel growth. But, I don't HAVE to spend any of it on my business. So, while I look at all of that money as income that I could spend if I ever needed it, I'm sure banks will see it as simply being necessary business costs, and therefore not income.

Anyway, I went car shopping with the idea that I would get an auto loan through NFCU. I explained my situation to the finance guy, and told him my credit score was good (around 720 at the time). He told me not to worry about it, he had me apply to a local credit union, and sure enough they never asked for proof of income.

From my understanding, if your credit score is solid and you don't have any blemishes on your report, auto loans rarely require proof of income (well, unless you're buying something like a Lamborghini of course).

Your 667 score might not be quite enough to avoid further scrutiny though. But I could be wrong.