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NOTE: U.S. workers are being drastically affected by the current outbreak of COVID-19. To skip to the section of this article that discusses the current COVID-19 and hits potential effects on independent contractions, click here.
Finding the right auto loan can be a challenge. And this applies to most people. But when you are a 1099 worker, things might be more complicated. Even so, complicated isn’t the same thing as impossible. That is to say, there are still some auto loans for 1099 employees to choose from if you want to invest in a reliable car. If you have some questions on the topic, do continue reading this article as it offers handy tips.
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First of all, we would like to clarify what it means to be a 1099 worker. Basically, if you have this status, this means that you’re considered an independent contractor. The main difference between 1099 workers and typical employees would be that independent contractors enjoy more flexibility.
This is, in truth, one of the main advantages of having this position. But when it comes to legal rights – such as those related to overtime and minimum wages, you might be at a disadvantage.
Concurrently, the law requires you to file your own taxes, which might appear a tad inconvenient and time-consuming. It’s fundamental to be timely when it comes to paying your tax obligations, to steer clear of mandate penalties.
But it’s just the way in which things work, as there are benefits and disadvantages associated with each position. On that note, as a 1099 worker, you might encounter difficulties with getting a mortgage, as well.
However, the good thing is that, in spite of the difficulty, you might choose from various loans designated specifically for independent contractors. You just have to know where to look for them. And this applies to auto loans for 1099 employees as well.
When you are a 1099 employee, you are responsible for controlling all the projects you decide to work on. And this is one of the best things about this position. But this also means that you need to enjoy ultimate flexibility. And to do that, you most likely need a suitable car.
Essentially, as a 1099 employee, you have to attend various meetings. These meetings may be planned or unplanned. But either way, you need to be flexible and ready to attend them at any time of the day.
Having a car will make it easy for you to travel to on-site jobs and meetings whenever you are needed. But you need to invest in a car that is up for the task, a reliable vehicle that will address your long-term needs.
Depending on public transportation might seem like a decent option when you have a 9 to 5 job. And it might be more plausible, allowing you to save money. But when you are a 1099 worker, things are a tad different.
For one thing, since you set your schedule, you also have a high responsibility towards the persons that choose to hire you. So, if you are required right away, you must have the means to be there as soon as possible. Relying on public transport could limit you in this respect, making things complicated.
Did you know that, if you intend to utilize your car for business purposes, insurance write-offs might be a possibility? That is to say, you could compensate for a higher premium if you choose to write off your car insurance.
Nonetheless, it’s always best to discuss with a certified accountant about insurance write-offs. Only afterward should you make an informed decision in this direction. Still, if you do require a vehicle for your job operations, you shouldn’t encounter too many challenges while browsing for auto loans for 1099 employees.
Now to answer the most trivial question on our topic: are there specific auto loans for 1099 employees? The answer is negative. More specifically, there aren’t financing options that are specially created for 1099 workers.
Nevertheless, there are numerous loans that 1099 workers might qualify for – and this applies to visa holders that have the status of 1099 workers as well. Nonetheless, the main challenge that usually arises is that most banks are reticent to approving financing requests from visa holders.
That’s because they are perceived as high-risk borrowers. For one thing, they don’t have a credit history, which is a major impediment. Another thing that increases the risk of working with this category of borrowers would be that foreigners might leave the country at any time, which could complicate things.
In some scenarios, people in this position might not have the necessary paperwork to apply for auto loans for 1099 employees.
This is why it is important to collaborate with a lender that understands your needs and is willing to provide you with a customized offer. At Stilt, we embrace a more flexible approach to lending – we offer assistance to 1099 workers, and not only. We have also helped H1B visa holders in getting auto loans.
While many employees in the U.S. are vulnerable to losing their jobs during the current COVID-19 outbreak, no workers are more vulnerable than independent contractors.
In addition to working on a case-by-case basis without a necessarily steady income, independent contractors can rarely afford healthcare coverage in the U.S. This combination of lack of work and lack of insurance can be very dangerous.
And with the current COVID-19 outbreak and it’s highly virulent nature, getting sick can lead to independent contractors being unable to work. Moreover, their lack of healthcare can mean longer recovery times and time away from work or worse.
It’s incredibly important, now more than ever, that independent contracts take the steps and measures to ensure their financial safety and for a potential health emergency.
You might know by now that personal loans offer unmatched flexibility when it comes to the way in which you can use the money. That is to say, there aren’t so many restrictions. Therefore, you could consider applying for a personal loan with Stilt and use the money to purchase the car you need.
What you’ll most likely appreciate about Stilt is that our process makes everything easy and accessible: even if you haven’t worked with a US lender before. Here are the steps that apply when you want to get a personal loan.
Submit your application
Evidently, this is the first step you should follow. In comparison to working with a conventional bank, the application process at Stilt is to the point and easy to follow. And most importantly, you will get a quick response – in roughly 24 hours, you’ll most likely get an update.
There are cases in which we might need more information regarding your financial background or something else. In this scenario, we will request that right away.
Get the offer
After getting your application, we verify all the information included there. In addition, we verify the validity of the documents. Afterward, a promissory note is sent. You are expected to sign this.
Once you have agreed with the terms specified, we will proceed with the transfer of the money. Usually, it can take roughly two to three days until the money enters your account. This means you’ll be able to get your car in less than a week after applying for a personal loan with Stilt.
Start repaying the money
Of course, the final step would be starting to make repayments. To ease things for you, you can set the autopay feature. And if you do have the financial resources to repay the money you borrowed sooner than agreed in the loan terms, you may do that stress-free: we don’t charge prepayment penalties.
Pay in cash if you can
The likelihood of having the financial means to pay for the car in cash is minimal, especially if you’re looking for auto loans for 1099 employees. However, if you do have some cash at your disposal, you can always use that money.
This way, in time, you might save some money.
Compare different offers before making a decision
When they’re in the market for a car, many people get set on a specific model without even considering others. Of course, you need a vehicle that will address your needs. This doesn’t mean you should disregard the importance of comparing different offers.
This also means going to a range of dealerships. You might be surprised by the differences in pricing you might notice.
Do your research
Doing research is overlooked, which is why some people might end up making poor decisions when purchasing a car. Make sure you are acquainted with the real value of the car you intend to purchase. In this way, you will be 100% confident that you’ve made the right call.
Consider second hand over new
If your financial situation isn’t stellar at the time being, perhaps you should consider a second-hand car over a new car. If you do your research well, you might find a second-hand car that works impeccably at a fantastic price!
Be open to negotiations
And finally, if you do decide to get a second-hand vehicle, don’t hesitate to negotiate the price. You can always do that, especially if you notice that the car has a minor flaw or maybe more. However, to do that, you have to be really knowledgeable regarding the value of the car and current market prices.
In a nutshell, if you need a car, you should start comparing different auto loans for 1099 employees. But before you do that, make sure you do your homework in regards to the car you intend to buy as well. Don’t make any hasty decisions you might end up regretting later on, especially since a loan accounts for a major financial responsibility.