Without a job and being unemployed are two different issues. An unemployed person does not have a job or a part-time job with no more than fifteen working hours a week, but there are also no people without a job who live from the income of their partner or their parents or from their own assets.
Ultimately, even students and schoolchildren do not have a regular job with a few exceptions. The reason for unemployment plays an important role in lending. This also applies to car loans, which are special loans for the purchase of a new or used car. The car dealer grants these at particularly favorable conditions, while car loan borrowing from a commercial bank enables additional negotiation of a cash discount in the car dealership.
Not a job and yet not unemployed
If you have sufficient income to repay the loan, many banks will give you a car loan even without a job. This does not apply to financial institutions that explicitly limit the recipients of their loans to people in active employment. Statutory or private pensions, as well as dividends from equity investments or other participations, are considered to be income from sources other than employment. Owning rental apartments also means that both the dealer and the commercial bank grant a car loan without a job.
If the income is generated through the support of the partner or the parents, car loans without a job can be taken out by borrowing or at least a guarantee from the third person who finances their livelihood. However, some financial institutions are satisfied with the confirmation that the borrower’s cost of living for parents or partners is secured during the term of the loan.
If the vehicle buyer later does not achieve the expected income and cannot pay off the car loan without a job, the bank is entitled to a right to use the vehicle. This does not become effective only when the registration certificate (Part II) is handed over, but already through the agreement in the car loan contract.
Unemployed and car loan
If you are unemployed and need a car loan, you will almost always only get one if you provide a co-borrower or a guarantor. In exceptional cases, the job center can pre-finance an inexpensive car if it is indispensable due to a disability of the unemployed or for a planned start of work. Most car dealers can also take out a car loan without a job if the unemployed person pays at least forty percent of the vehicle price as a down payment.
In this case, it is customary not to present a certificate of earnings. A correspondingly high down payment is often affordable at the beginning of unemployment when purchasing a small car or an inexpensive used vehicle, and makes sense due to the different crediting of the car value and the savings credit for a later reform withdrawal.