3 Ways To Buy A Car With A 1099a Form

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Buying a car can be a daunting task, especially when you're self-employed and rely on a 1099 form to report your income. Traditional lenders often require a W-2 form to verify income, making it challenging for 1099 earners to get approved for a car loan. However, there are ways to buy a car with a 1099 form. In this article, we'll explore three options to help you get behind the wheel of your dream car.

Understanding the 1099 Form

Before we dive into the options, let's briefly understand the 1099 form. A 1099 form is used to report income earned from self-employment, freelancing, or independent contracting. This form is used to calculate taxes, and it's essential to keep accurate records to ensure you're reporting your income correctly.

Option 1: Alternative Lenders

Alternative lenders, also known as non-traditional lenders, offer car loans to individuals with non-traditional income sources, including 1099 earners. These lenders often use alternative methods to verify income, such as bank statements, invoices, or contracts. Some popular alternative lenders include:

• LightStream
• Capital One Auto Finance
• RoadLoans

When applying for a car loan with an alternative lender, be prepared to provide additional documentation, such as:

• Bank statements
• Invoices or contracts
• Tax returns (personal and business)
• Proof of income (1099 form)

Keep in mind that alternative lenders may have stricter requirements or higher interest rates compared to traditional lenders.

Option 2: Co-Signer or Co-Borrower

Another option is to have a co-signer or co-borrower with a traditional income source (W-2 form). This can be a spouse, family member, or friend with a stable income. By adding a co-signer or co-borrower, you can increase your chances of getting approved for a car loan.

When choosing a co-signer or co-borrower, consider the following:

• Their credit score should be good (700+ FICO)
• They should have a stable income (W-2 form)
• They should be willing to take on the responsibility of the loan

Keep in mind that if you default on the loan, the co-signer or co-borrower will be held responsible, which can damage their credit score.

Option 3: Leasing or Rent-to-Own

If you're struggling to get approved for a car loan, consider leasing or rent-to-own options. These alternatives allow you to drive a car without owning it outright. Leasing or rent-to-own options often have more flexible requirements, such as:

• Lower credit score requirements
• No down payment required
• Flexible income verification

However, leasing or rent-to-own options may have limitations, such as:

• Mileage restrictions
• Higher monthly payments
• No equity in the vehicle

Tips for 1099 Earners

As a 1099 earner, it's essential to keep accurate records of your income and expenses. Here are some tips to help you get approved for a car loan:

• Keep detailed records of your income and expenses
• Maintain a good credit score (700+ FICO)
• Consider alternative lenders or co-signers/co-borrowers
• Be prepared to provide additional documentation

Wrapping Up

Buying a car with a 1099 form requires creativity and flexibility. By exploring alternative lenders, co-signers/co-borrowers, or leasing/rent-to-own options, you can increase your chances of getting approved for a car loan. Remember to keep accurate records, maintain a good credit score, and be prepared to provide additional documentation.

What's your experience with buying a car as a 1099 earner? Share your story in the comments below!