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Car loans for employees who rely on tips

Car loans for employees who rely on tips


There are thousands of hard working Canadians who rely on tips to make up for a low salary. Waiting staff to concierges, door staff to valets, there are many worthy professions where tips make up a significant part of your take home pay.

So what do you do if you need a car loan?

Much depends on how you manage and document your tips.

Car loans and tip income

Qualifying for a car loan depends on your credit score, current circumstances and the affordability of that loan. If you can prove beyond reasonable doubt that you can pay the loan, you can qualify for one.

Staff who rely on tips are no different. The main challenge is proving it.

  1. If you declare all your tip revenue to the Canada Revenue Agency, you should have sufficient documentation to prove income.
  2. If you document your tips every day with your employer or other employees, that may be taken as proof by a lender.
  3. If your employer keeps a formal record of tips and lets you access your part of it, you may be able to use that as proof of income.

For non-subprime lending, you won’t always be asked for proof of income. Most of the lenders we work with here at Car Nation Canada will request this as a formality though.

If you rely on tips for your monthly income, you should prepare to prove how much and how reliably your tip income is.

Bad credit car loans and tip income

For subprime lending, proof of income is always required. It’s not personal. Lenders just have to make extra sure that you can comfortably afford the loan and that it won’t put you in any financial difficulties.

If you have a less than ideal credit score or are in the process of rebuilding it, be prepared to have to document your tip income.

If you can prove your tip income, you should be fine. If you cannot prove your tip income, the tips will either be discounted from the loan affordability calculation or you may be refused that particular loan.

Don’t let a reliance on tips prevent you applying for a car loan. If you get the tips and can afford the loan, we can find you one.

Visit your nearest Car Nation Canada location to learn more about car loans for employees who rely on tips.


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