For every auto loan, there are some requirements you need to meet, such as having the income to pay for the vehicle. For a bad credit car loan, there are also residency requirements. We cover the common stipulations of subprime lenders when it comes to your living situation.
Bad Credit Auto Loans and Residency
Bad credit auto lenders look at more than just your credit score, and one thing they check out is your residence history and stability. With all else being equal, the longer you’ve lived in the same area, the better your chances are for a car loan approval generally are.
Subprime lenders that are signed up with special finance dealerships typically require that you’ve lived at your current residence for at least a year. If you haven’t lived there for that long, then living in the same area for at least three years may be accepted. This depends on the lender you're working with and what their specific requirements are, but the more stability you can show, the better.
When it comes to bad credit auto loans, subprime lenders look for your ability, stability, and willingness to pay for a vehicle. Ability refers to your income; stability means your work history and living situation; and willingness to pay refers to your down payment. For all of these things, subprime lenders require documents that prove you’re ready to take on a car loan.
Proving Your Residence
Proving your residency is done by submitting a document in your name with the correct address. Your driver’s license also needs to have your current address.
You can typically use a gas, electricity, or water bill to prove your residency – and it must be in your name. Bank statements in your name can usually do the trick, too.
However, if you have a P.O. box or rural route box listed as your address, it won’t be accepted by a subprime lender.
Different Living Situations
There are many different types of living situations that people could be in – everyone’s lives are different. Despite this, many subprime lenders require that you have some kind of residence stability in order to consider you for financing. You may have more luck qualifying for a bad credit auto loan if you're a homeowner or renter.
- Homeowner – Someone who owns a home, condo, townhome, stick-built residence, or manufactured home (and the land that it’s on).
- Renter – Does not own a home. A borrower that lives in a manufactured home who rents the land it’s on is considered a renter. A military borrower that’s on a base is typically considered a renter as well.
There are some living situations where your residency may not be accepted. Every lender is different, but, generally, temporary facilities aren’t acceptable as residency for a bad credit car loan approval. For example:
- RV – If you've thrown conventional living to the wayside for a life on the road, you may be out of luck when it comes to an auto loan. Subprime lenders require you to have a permanent address, so if your RV isn't on a lot you own, you can’t be considered for a car loan.
- Hotels and motels – When you spend 52 weeks a year traveling the country for work, it can be hard to keep a permanent residence. Many people in this situation use extended stay hotels or motels in lieu of a residence, but these residences aren’t acceptable for subprime auto financing.
If your living situation isn’t exactly any of the above scenarios, be sure to talk to the special finance manager openly about your unique situation.
Moving Forward With a Car Loan
Ready to get the ball rolling and get into your next car loan? Look no further than Auto Credit Express. We match bad credit borrowers to the dealerships with bad credit lending resources at no cost.
Begin by filling out our free auto loan request form. After you do, we’ll look for a dealer in your area that’s signed up with bad credit car lenders.