A Guide to Car Loans for Uber Drivers

An Uber Driver can get a car loan, but the question is whether it’s a good idea. Keep reading to learn more!
Written by Rob Shapiro
Reviewed by Jessica Barrett
Most lenders will approve an Uber Driver for a car loan even if they plan to pay off their loan with their Uber salary. There shouldn’t be too many obstacles or surprises, especially if you have a good credit score and a more secure income to supplement what you earn from Uber. You can also opt for a co-signer. 
There are several requirements anyone who wants to be an Uber driver has to meet. The most important, though, is having a car that meets a certain standard. Lenders typically view Uber drivers the same as any applicant—despite understanding the pitfalls of the job, such as low salary and high car usage.
To help Uber drivers better understand the process for being approved for a
car loan
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How do car loans work?

Cars are expensive, so a car loan is a popular way for most people to pay off the cost of their vehicle over an amount of time determined by the loan agreement. The lender makes money off the interest the borrower pays with every installment. Essentially, the borrower pays interest in addition to the principal loan.
A car loan is a secured loan, meaning the car you purchase with the loan acts as collateral. If you fail to repay the loan, your car could have a
placed on it or even be repossessed
Lenders look at several aspects of a borrower’s ability to repay the loan. While the process can be secretive, an applicant’s credit score could determine if they’re approved or not. A good credit score is typically between 725 and 759, and you’ll have a better chance of getting a loan with a reasonable interest rate if your score falls in this range.
Keep in mind that the application process does vary per lender, whether it’s a bank or a credit union. 
Key Takeaway A car loan is a secured loan where the purchased car is used as collateral. Anyone, including an Uber driver, can be approved if they have a good credit score (725 or higher) and meet the lender's other requirements.
MORE: How to buy a car with bad credit

Consider getting a co-signer

If your application for a car loan is rejected, you can get someone to co-sign your loan. This will satisfy most lenders that someone will repay the loan if you are unable to. 
A good co-signer should have the following:
  • A credit score that is viewed as good or better
  • Sufficient income to qualify as a co-signer
  • The appropriate debt-to-income ratio
  • Good standing with the financial institution if they’re a previous or existing customer
Key takeaway Having the right co-signer is an efficient way to get approved for a loan. Consider it to be a good option if your application is rejected.
MORE: How to get a cosigner for a bad credit car loan

Where to apply for a car loan

The two most reputable places to apply for a car loan are banks or credit unions. You do not need to only apply at an institution where you are already a customer. It’s perfectly reasonable—and always a good idea—to shop around. This will increase your chances of getting approved and finding the best loan terms.
Banks are often the most popular choice, but if you’re looking for a smaller loan for an inexpensive or used car, you might want to make an appointment with your local credit union.

Will lenders give car loans for Uber drivers

The quick answer to this question is yes. There is nothing to say that a financial institution will turn away an applicant because they will be using the loan to buy a car to be an Uber driver.
Here is what a financial institution reviews concerning applicants for a car loan:
  • Income
  • Credit score
  • Proof of identity and residence
  • Debt-to-income ratio
  • Employment 
Key Takeaway If you meet the requirements outlined by the financial institution, including credit score, income, and debt-to-income ratio, then it shouldn’t matter if the applicant is an Uber driver.

Advantages of a car loan for Uber drivers

Uber drivers need to have a safe, pleasant vehicle. They also need one that can withstand heavy driving and whatever the road and weather throw its way. 
Unless you have a hefty down payment or can fully pay out of pocket, a car loan can let you buy a better or newer car
The benefits of a car loan for Uber drivers include:
  • You can buy a more expensive car than your finances would allow.
  • You can buy a newer car model with features that will appeal to passengers.
  • By getting pre-approved, you can shop with more confidence

What makes it hard to get a car loan for Uber drivers

The main obstacle an Uber driver might face in getting a car loan is if Uber is their only source of income. Because of the fees and other costs involved, Uber is often viewed as being better as a side hustle. This doesn’t mean it can’t be your primary source of income, but you will have to prove that you earn enough to repay the loan per the loan agreement. 
If you’re a new Uber driver, remember that Uber takes a cut of the driver’s income for the services they provide. This means that you’ll pay a percentage to Uber for every ride you give.
There is a reason that many Uber drivers have a second job, like working for a cab company or another ride-sharing program.
Also, the laws around Uber and ride-sharing programs vary per state. Even if you live in a state that allows Uber to operate, this can change at any time. Uber tends to have a contentious relationship with many politicians and municipalities. 

How to get affordable car insurance

Every Uber driver needs to protect their investment with the best car insurance. You should consider using
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If you have a steady income and meet the other requirements outlined by your lender, then you should have no problem being approved for a loan, even if you’re an Uber driver.
Getting a car loan to buy a car to be an Uber driver is not a bad idea if you know what you’re getting into. You want to make sure you will make enough income to repay your car loan if you make less than anticipated as an Uber driver.
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