Are temporary workers eligible for car loans?

I've done exclusively freelance and contract work for the last few years. Are temps like me able to get car loans?

They are. However, because of the nature of temporary work, these people need to work a bit harder to be approved for car loans. Because their income and employment are uncertain, they are perceived to be a greater risk.
Some concrete steps that can be taken to mitigate the perceived risk include:
  • Obtaining an offer letter from an employer. An offer letter for a future permanent position is obviously best, but an offer of a long-term contract is helpful, too. The lender wants to see that you will have employment (and the income that goes with it) for the life of the loan.
  • Staying with your employer. An extension of an existing contract indicates greater employment stability, even if the job has a planned end date. Lenders assume that further extensions are more likely. There’s also the possibility of an offer of permanent employment.
  • Getting a cosigner. A cosigner with stable income and employment can mitigate the risk presented by a temporary worker. The cosigner must be aware that they will assume responsibility for the loan should the primary borrower be unable to make the payments.
As the U.S. economy moves toward more temporary employment, look for lenders to offer programs that are more suited to the growing population of contractors, temps, and seasonal and casual workers.
Jim Donaher
Answered on Mar 12, 2021
Jim Donaher is a freelance writer and manager with over 35 years' experience in the insurance, banking, and investment management businesses. He provides expertise on a range of topics and is able to explain complex industry information in layman's terms. Jim is the author of two books, including Call Him, He's Home: A Guide to Prayer for Regular People and Then Larry Smiled, a novel about life, death, accountability, and salvation. Taormina, Sicily is his happy place!

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