Getting a car loan doesn't have to be a nightmare, even with bad credit.

Can you Finance a Car with a Fixed Income?

Posted November 26, 2013 by

Millions of Americans between the ages of fifty and eighty are currently living on a fixed income, plus millions more who receive payments because of a disability or alimony settlement.  For these individuals, budgeting becomes a vital factor in whether or not they will have enough money to make it through the year.  People on fixed incomes are uniquely sensitive to loan rates, and Complete Auto Loans aims to ensure that all of them are given a fair chance at securing a great vehicle to continue their independence.

Qualifying for the Loan

Having a fixed income is a blessing and a curse when it comes to purchasing a new or used car.  On the one hand, you don’t have a huge amount of disposable income so it can be difficult to find a car dealership with prices in an affordable range.  On the other hand, this same income limitation forces dealers to work with you on payment terms, and most lenders will readily qualify you for small loans because they know that you will be receiving a steady paycheck in perpetuity.

Warning! Monthly Payments Are NOT What They Seem

When you live on a fixed income, you tend to fixate on the short term factors in financial accountability.  Instead of planning for the future, you instead carefully plan a budget for every month.  Car dealerships know this, and they will try to take advantage of you by offering low monthly payments on unaffordable cars, stringing the payments out for years and ensuring a massive interest payment for the dealership.  It is almost NEVER worth financing a car for more than 3 years, especially because the warranty will have long run out by then.  Financing a car for longer than 3 years leads to more interest accrual in the long term, and you will be making payments on a car long after you would have had more frugal cars paid off.

Loan Programs for People on Fixed Incomes

If you are currently on social security or you receive regular disability payments, you are probably eligible for federal financial assistance during your car search.  The government extends a great deal of help to so-called “vulnerable” populations, and they will help you find a lender and will prevent you from being scammed by less scrupulous lenders that prey on the elderly.  If you ever have any question about a loan, especially if it seems too good to be true, don’t hesitate to contact Complete Auto Loans for a referral to the appropriate agency to deal with your concerns.

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