There is no minimum income required to buy a car if you save up and pay cash. Financing, on the other hand, has many requirements, including income. Your credit plays a large part in what type of loan you qualify for and how much income you’re required to have.

Financing with Good Credit

What is the Minimum Income to Buy a Car?When you have good credit (a FICO score of 650 or higher), the process of buying or financing a vehicle can be relatively simple. Ideally, you pick out a vehicle, get financing, go to a dealer, sign your paperwork, and take delivery of your new car. It’s a very basic process when you’re not worried about your credit standing in the way. The lender will do some calculations to make sure you can afford the payment, but if you have good credit, your income doesn’t matter as much, and you’ll have less to prove then if you have bad credit.

Bad Credit Auto Financing

With bad credit, the requirements for financing change and you have to meet all lender qualifications, including minimum income, to buy a car. A lender needs to be confident you can successfully complete the loan without struggling to make payments. Lenders set income requirements as well as minimum debt to income (DTI) and payment to income (PTI) ratios to make sure you can do this.

Though the specific amount will vary by lender, minimum income requirements generally range from $1,500 to $2,000 a month before taxes. You’ll need to provide proof of your income with a computer-generated paycheck stub showing year-to-date income. Income to qualify for financing has to come from one employer, two or more incomes can’t be added together to meet the minimum requirement.

Having more than one income can help with DTI and PTI ratios, however. DTI is the total of all your monthly bills, including your car and insurance payment, divided by your total pre-tax income. Lenders typically won’t approve you if your DTI exceeds 45 to 50 percent of your total income.

PTI shows a lender how much of your income will be set aside for your estimated car and insurance payments combined. Lenders usually cap this at 15 to 20 percent of your total monthly income.

Finding Financing for Your Situation

No matter what your situation is, it’s a good idea to know where your credit stands, and to prepare a budget to ensure you can comfortably afford a loan. There are many tools available online that can help DTI and PTI calculations, as well as car loan estimators that can give you a sense of what overall monthly payments you might qualify for.

If you’re struggling through credit issues and don’t know where to turn for an auto loan, Auto Credit Express can help. We work with a coast-to-coast network of special finance dealers that have lending resources to work with people in many difficult situations. Fill out our free, no-obligation auto loan request form online to start the process of finding auto financing now!