I'm self-employed, but the only evidence I have of income our my own logs and my tax return. I've got $1000 cash to put down on a car and my current car is worth at least $2500. I'm going to be looking for a used Toyota or Honda in the $8000 range.
Should I expect any problems with the self-employment status or my credit score? Since I have so little proof of income other than tax returns, I wonder if this will be enough? I'm not sure what to expect!
I don't think you will have an issue as many dealerships have sub prime finance programs or Buy Here Pay Her for people in your situation. You will pay a higher interest rate for this type of loan , best to keep saving and pay cash out-right for good used Honda or Toyota.
The answer to this depends on your Credit Report. If you have excellent credit, all your tax returns and some established credit you should not have any issues. Be prepared to be asked for other proof of income and if you have it fine, if not just be upfront. You really should go to your personal bank before you look for a car and have them look at your situation and tell you where you stand on an approval basis. This does two things: It lets you know what you can do and it gives you leverage when negotiating on the new car because you have your financing arranged ahead of time.
〉 Answered on Oct 25th, 2013 by Jessie L Thatcher, F&I and Sales Specialist at Reynolds and Reynolds Company (Retired)