388 King George Rd, Brantford, ON, N3T 5L8
My Garage

How Do Car Dealerships Verify Income? All You Need to Know

How Do Car Dealerships Verify Income? All You Need to Know

Affordability has a significant impact on your eligibility for a car loan. Your income and any other sources of money play a role in that, in part. But how do auto dealers confirm your source of income?


Even though you declare your salary on the loan application, the lender won't accept it at face value. It'll demand evidence.


Get Pre-Approved in 2 Minutes or Less.
All credit scores accepted & no down payments required.

Apply Now


How you go about proving your income depends on what the lender asks for and what type of income you have. Here are a few scenarios we have seen in auto loan applications.

How Do Car Dealerships Verify Income for Employed Applicants?

If you're a regular employee, the lender will typically need your last three months' worth of paystubs. This is typically sufficient if you have worked for your employer for more than a year.


Some lenders may ask for an offer letter confirming a permanent position if you have been hired for less than a year, or they can ask for authorization to speak with your employer directly.


How Do Car Dealerships Verify Income for Self Employed Applicants?

You must put in a little more effort to prove your income if you work for yourself or as a contractor. Typically, your most recent tax return and bank statements will be requested.


Some lenders will require a letter from your accountant confirming your income if you use one. If not, a tax return and three months' worth of bank statements ought to be sufficient.


How Car Dealerships Verify Income from Other Sources

You will experience a situation comparable to that of the self-employed if you are retired and living off of investments or rental income. A greater standard of proof is required to show that you make enough money to pay back a car loan.


This can be done by providing official paperwork for each of your income sources, such as bank statements, pension statements, rental income, and tax returns.


Prepare Your Paperwork to Quickly Verify Income

The aforementioned documentation is normally preferred by lenders, however, you can prevent this so your application will be processed more quickly.


  • Compile all your income paperwork and produce copies of everything
  • Check your credit report to make sure everything is correct and it accurately reflects your situation
  • Check your credit score to ensure you have sufficient score to qualify for the loan
  • Save for a down payment to offset any perceived risk from a non-standard employment status
  • Get pre-approved before you apply for the auto loan so you don’t ask too much


Prepare the last three months' worth of bank statements even though not all lenders will require them. Make all the essential preparations in advance so that everything is ready to go if they ask. You only waste a handful of minutes of your time if the lender doesn't ask.


It's usually better to be overly prepared than underprepared, and the same rule applies to applications for auto loans. It is preferable to have something than to require it and not have it. especially if you require a car loan quickly and are in a rush!


For those of you who know that you have a challenging credit situation, please visit Northway Ford where we have a team of credit specialists ready to help you get approved for a car loan today!


If you're ready for a car loan, we'd love to help with that! simply fill in the form below to get started.

Ontario Car Loan Pre-Approval


    Categories: Uncategorised