How to Get a Car Loan If You Are Retired

How to Get a Car Loan If You Are Retired
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Even if you are retired, you can still qualify for a car loan. Employment is not the key factor in whether or not you can get a loan. Instead, lenders look at all kinds of factors to ensure you will be able to make your monthly payments. They will look at income from pension, Social Security and investments, your credit score and any outstanding debts you have.

Put together a list of your sources of income, including pension, retirement accounts -- 401(k)s and IRAs -- and other investments, as well as Social Security. When you request a loan, you will need to show that you can comfortably make the monthly payments.

Put together a list of any outstanding debts you have. Lenders will want to see proof that you've been paying these loans back on time. Additionally, lenders will want to make sure you have a high income-to-debt ratio.

Request a copy of your most recent credit scores from a website such as, which gives you free scores from all three main bureaus once per year. Lenders will expect to see a copy of your credit scores. If you have a high score, this can work to your advantage because it serves as proof that you have a history of paying your loans back on time.

Apply for a car loan. If you have a long-standing relationship with a bank, apply with them -- they will have easy access to your credit history and are more likely to give you a good rate. When you apply, bring proof of income, a copy of your license, information on the car you want to buy and any information on your debts.

Negotiate the length of the car loan, most of which are five years. Depending on your age, lenders might want you to take out a loan for a shorter term. Though you will have to pay higher monthly payments, there are some advantages -- you will likely pay a lower interest rate. This is true especially if you can put a large chunk of capital down upfront.


  • If you cannot meet the requirements for a loan, you can ask a spouse, family member or child to co-sign on a loan for you. Banks are often more willing to grant a loan if there is a co-signer, who assumes the responsibility of paying the loan back if you become unable to do so.


  • Before you buy your car, you will need to show that you have a valid driver's license. Many states have special requirements for older drivers. Some require drivers older than 40 to pass an eye exam, while others shorten the time your license is valid. You will need an up-to-date license to secure a car loan.