A man is excited about his new car and his 740 credit score

Income Requirements to Finance a Car

Milad Hassibi April 24, 2018


If you are looking to buy a car, you may be wondering what income you need to buy. Obviously, there isn’t a minimum income requirement to purchase a car outright in cash. However, financing a car with an auto loan has various requirements, and your income is included in that. Your credit score will also play a large role in exactly what income you need to finance a car through an auto loan.

Buyers with Healthy Credit

If you fall into the category of good credit (usually a credit score of 650+), you won’t have too much difficulty financing a car. Having a healthy credit score will allow lenders to focus less on your income and more on other factors that relate to an auto loan, such as your debt to income ratio (DTI) and also your payment to income ratio (PTI).

Buyers with Less Than Perfect Credit

If you have a less than perfect credit score, you will be evaluated much more carefully. You willA woman in a magnifying glass looking at her credit score have to meet all the lender qualifications such as income, employment status, and more to finance a car purchase. Lenders and creditors need to be confident that you will make your auto loan payments in full without falling behind.

Lenders will consider the amount of down payment as well, as the smaller the loan they give, the less risk you pose to your lender. The length or duration of the loan also plays an important factor, as buyers with bad credit may have a history of bad purchases. Your debt to income ratio and payment to income ratio is another factor lenders will consider when it comes to car buyers with bad credit.

The Minimum

Although the amount will vary from lender to lender and from location to location, most financial institutions look for a minimum income requirement of $1,600 to $2,000 per month before taxes. You will most likely be required to prove this by providing a pay stub or some other proof of income. Buyers with multiple jobs can typically only use one pay stub. Two pay stubs cannot be combined to meet the minimum income requirements.

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Financial Ratios

Multiple sources of income will help with your DTI and PRI ratios. Your debt to income ratio is the total amount of all your expenses and bills, including your possible new monthly car payment and insurance payments divided by your income before taxes. Lenders typically want to see DTI ratios less than 50% of your income. Payment to income (PTI) will show lenders what percentage of your income will be spent on your auto loan payment and insurance payment for that car. This is typically capped around 15% to 20%.

Final Note

If you are looking to finance your new car and have less than ideal credit, CrediReady offers one of the largest databases that connects dealerships, lenders, and buyers in all credit situations. Take a few moments to fill out our free and confidential loan search form online and we will match you with a dealership in your local area that can meet your auto financing needs



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