Can you buy a car with unemployment income from NYS Department of Labor benefits?
I've been on unemployment for about 2 months now and my car just broke down completely. The repair costs are more than the car is worth so I need to get another vehicle. I found a decent used car for $8,500 but the dealer is asking about my income source. Can I use my NYS Department of Labor unemployment benefits as proof of income to get financing? I get $420 a week which should be enough for the payments but I'm not sure if unemployment counts as real income for car loans. Has anyone been able to buy a car while collecting UI benefits?
10 comments
Join the conversation
Oliver Zimmermann
Yes, unemployment income can count for auto financing but it depends on the lender. You'll need to provide your NYS Department of Labor benefit determination letter showing your weekly benefit amount and duration. Some dealers work with lenders who specifically accept unemployment income. The key is finding the right financing partner - credit unions are often more flexible than big banks.
0 coins
Amina Toure
•Thanks! I have my determination letter but it shows my benefits ending in March. Will that be a problem since it's only a few months of guaranteed income?
0 coins
CosmicCommander
I bought a car last year while on unemployment. Had to shop around but eventually found a dealer who worked with me. They wanted proof of my weekly claims and bank statements showing the direct deposits from NYS Department of Labor. Interest rate was higher than usual but I needed the car to job hunt effectively.
0 coins
Natasha Volkova
•What kind of interest rate did you end up with? I'm in a similar situation and wondering what to expect.
0 coins
CosmicCommander
•It was around 12% which wasn't great but not terrible considering. Once I got back to work I was able to refinance at a better rate.
0 coins
Javier Torres
Be careful about taking on debt while unemployed! What happens if your benefits run out and you can't find work right away? Maybe look for something cheaper or see if you can get your current car fixed for less money. Car payments are a big commitment when your income isn't stable.
0 coins
Amina Toure
•I understand the concern but I live in a rural area and absolutely need a car to get to job interviews and work once I find something. Public transit isn't really an option here.
0 coins
Emma Davis
Try a credit union if you have access to one. I had a friend who got approved for a car loan while on unemployment through her local credit union. They were much more understanding about temporary income situations than the big banks or dealership financing. Just make sure you can realistically afford the payments even if your job search takes longer than expected.
0 coins
Malik Johnson
ugh the whole system is so frustrating... you need a car to find work but you need work to get a car loan. it's like they want to keep people trapped. have you looked into those buy here pay here lots? they dont care about income as much but the interest rates are insane
0 coins
Oliver Zimmermann
•Buy here pay here lots often have predatory terms and very high rates. If possible, stick with traditional financing even if it takes more effort to find an approving lender.
0 coins