Social Security Disability Insurance is a program designed to provide assistance to those living with disabilities. The benefits are provided to workers who are no longer capable of supporting themselves due to their physical impairments. Statistics show that one in every 25 Americans receives SSDI benefits. However, such individuals often have a hard time when it comes to acquiring auto loans. This is because most lenders are hesitant to give auto loans to such people as their sources of income are hard to garnish. But again, that doesn’t mean everything is lost. There are ways through which someone who depends on SSDI can obtain auto financing.

Source: pbs.org

So, how to buy a car on Social Security or Disability?

• Find a part-time job

Auto lenders will prompt you to provide an additional source of income that earns you at least $1500 per month. This is because they want garnishable income. The part-time job should be stable and that you will continue receiving income for the entire duration of the loan. It means you’ll also need to provide recent verifiable paychecks from your part-time job plus tax records for at least past one year. Alongside the income from the part-time job, you also need to give proof that they’ve been receiving SSDI benefits of six months or more

• Get a co-signer

If you don’t have either a part-time job or garnishable income, then you can find a co-signer. In fact, this is quite easier. The co-signer can be a family member or close friend with a qualifying source of income. For the lender to accept your application, the friend or family member should fully agree to co-sign your loan application. The co-signers duty is to share the loan responsibility with you. It means in case you default the loan for any reason, the person will chip in to make payments. The other thing to note is that the auto loan will be featured on your credit report and that of the co-signer. Therefore, the loan can limit them or you from applying for credit in the future in case of default. It also means both of your scores will be affected.

• Purchase from BHPH

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Buy-here-pay-here dealers offer auto financing to disabled people receiving income from SSD but have bad credits. The dealers often don’t run credit checks and most of their financing is handled in-house rather than using third parties. The advantage of using BHPH dealers is that they don’t run serious credit checks and won’t report any default in payment whatsoever.

The only drawback about buying a car from BHPH is that you might end up buying a used or old car with high mileage. Moreover, most of them require you to make payments biweekly or weekly which might be rather hard. It is quite essential to consider the condition of the car you’re buying.

If you’re considering acquiring a car through BHPH dealers, then find one that reports all your timely payments. This is ideal in improving your credit score as you pay off your car loan.

Conclusion

While SSDI is beneficial for the disabled, it limits them from enjoying other benefits like getting car loans. Despite the challenge, there are options to consider. These include finding a co-signer, getting a part-time job or purchasing through a buy-here-pay-here dealer.