Buying A Car With Child Support

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Buying a Car with Child Support Whether you are planning on buying a car with a loan by using the child support that you receive or by trying to better your chances by showing that you pay child support there are many things that you should know ahead of time. Car dealers and lenders are going to have very special precautions and standards set for those who have to make or those who receive these kind of payments. They very easily can help or hurt you without you even realizing that it is happening if you are not fully aware of the situation.

How Lenders Look at Child Support

When you are applying with high risk lenders because of past credit issues you will need to know how child support will be viewed by the ones who are financing you. If it is being received as income then it is important to know that it will be treated different as regular income. The reason why this is will be because that type of income can not be garnished. This is going to translate to the fact that if the person taking out the loan ends up having a hard time making their payments and requires repossession then the lender can not go to court to garnish those funds.

Because repossession and high risk auto loans have a much higher possibility it is likely that the lender will be extremely cautious before making any final deals. Even with all that being said though there are two situations in which financing with child support can happen much easier.

  1. Additional Income - The higher your income from a job source that can be garnished then the better likelihood that you are going to be approved for bad credit financing.
  2. Outside Factors - If there are more factors to your situation such as a long term job, stable housing situation, and if you have situational over habitual bad credit then these can improve your chances as well.

There will of course need to be a proof of income for someone that is receiving child support payments. It is going to vary depending on the lender how detailed of documents you need.

Making Payments

If you are making payments and still have a sufficient income after all expenses there should not be any issues. You will however run into issues if there is a delinquent payment background. Most of the time a large problem is that a person doing this jumps from job to job to avoid garnishment from their employer. This will also end up on your credit report and as soon as a lender would see this typically you will be automatically rejected.

There are circumstances where you will be able to work around this situation though. If this is the case with you then you will want to make sure that before applying for an auto loan that you have made arrangements with child services and have written documentation of payments. This will be the only chance that you have to salvage receiving an auto loan. These are your best bets when applying for an auto loan while either paying or receiving child support in damaged credit situations.

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Do you meet the basic qualifications?

  • At least 1 year with current employer
  • A minimum income of $1,500 per month
  • No repossesions within the last year
  • Any bankruptcies must be discharged
  • Money down may be required, but not in all cases
  • Must be a current resident of the U.S. or Canada