If you live in Seattle, are self-employed, and have bad credit, can you get a car loan? It’s certainly possible, but you need to make sure you meet the lender’s income requirements and are able to show proof of income with your tax returns.

Auto Loan Income Requirements

Buying a Car in Seattle when You’re Self-Employed and Have Bad CreditSubprime lenders that offer bad credit auto loans in Seattle look to outside factors to determine approval, including your income and employment. The minimum income requirement varies by lender, but it typically falls around $1,500 to $2,000 a month before taxes. This goes for both subprime lenders and buy here pay here dealerships that offer in-house financing.

Subprime lenders require your income to come from one source, and may only accept regular W-2 employees. Buy here pay here dealers, on the other hand, are willing to accept borrowers with multiple income sources.

When you’re self-employed, you pay your income taxes quarterly. To provide proof of income if you’re self-employed, lenders are going to ask to see your income tax forms including Schedule C. They then use your net income after business deductions as your pre-tax income. They also may ask for multiple tax returns to further prove it’s stable over a longer period of time.

If you’re an independent contractor, while you get a 1099 form every year from your employer(s), you still need to bring in your tax return(s), including a Schedule C, to prove your income.

Adding a Co-Borrower to a Car Loan

If you find that you don’t meet the lender’s income requirements and can’t get approved, the next best thing you can do is add a co-borrower to the loan. A co-borrower – sometimes called a joint applicant – is someone who signs the loan documents with you and shares ownership of the vehicle.

Unlike a cosigner – someone who signs the loan papers but doesn’t share ownership – adding a co-borrower gives you the chance to combine incomes if they're your spouse. This is extremely helpful if your joint applicant has W-2 income; you may even get the chance to qualify for a better interest rate than you would've gotten on your own.

Keep in mind, however, that removing a co-borrower isn’t easy. The only way to do this is by refinancing. You need to qualify to refinance the car loan on your own, and have the co-borrower sign the title so ownership can be transferred to just in your name.

Before you and your co-borrower sign the loan documents, make sure you both understand the importance of making on-time payments – no matter what happens between you personally.

Need Help Finding a Dealer in Seattle?

Now that you know it’s possible to get an auto loan when you’re self-employed and have bad credit, where do you go in Seattle to find the right dealership to work with? Don’t go driving around SODO visiting dealers and getting turned down – we can do the searching for you.

At Auto Credit Express, we match car buyers to local dealerships in The Emerald City and across the country that have the lending resources to assist people with bad credit. Don’t wait for an opportunity to arise, get started today by filling our simple and free auto loan request form.