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Publish Date - September 11, 2020

Author: Mike

Categories:   Tips & Insights For Car Buying    Auto Loans & Financing    Buying & Selling Cars    Types of Car Loans   

Car Loans for Uber Drivers. What You Need to Know

Everyone’s heard about the benefits of becoming a rideshare driver. It pays well, you have your personal schedule, you can drive/work as much as you want, you get uber insurance or rideshare insurance and off you go.

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Everyone’s heard about the benefits of becoming a rideshare driver. It pays well, you have your personal schedule, you can drive/work as much as you want, you get uber insurance or rideshare insurance and off you go.

However, before one can qualify, your car needs to meet the specifications laid out by the rideshare company. Now, this often requires people to take out a loan to either get their own vehicle up to snuff, or even buy a new ride.

And, here is where car loans come into play. It is possible to get several types of loans as an Uber driver, but each option has its own pros and cons. While people generally opted to finance a whole new car entirely through Uber, this option was recently closed.

In this article, we will bring you the latest information on what you need to know about car loans for rideshare drivers and the different types that you should be considering. Let’s get into it.

Can you get a car for Uber on finance?

Since Uber drivers have been struggling to pay off their monthly payments and interest rates from car loans, Uber had cut the financing program back in 2017. They also ditched the leasing program a year later, in 2018, because they lost a reported average sum of $9K per vehicle they leased through their Xchange program.

Some Uber Marketplaces allow Uber driver-partners to rent, lease, or finance a new car very quickly. Reportedly, the process can be done in several days. However, people are often interested the most about financing a car directly for Uber because it naturally means purchasing that vehicle for good, and they can go higher with the sum than they usually would with a personal loan.

And, even though it was a big commitment, if you were looking for a long-term solution, this one was the best. So, how can we get around this problem? Currently, there are a few types of loans for Uber drivers out there.

Types of car loans for Uber drivers

If you are an Uber driver, working and living in the US, and you have a fair credit score range, there are a few options.

  • Carvana has no minimum credit score and offers a car loan for 1 to 6 years at 3.9% to 27.9% APR, but you have to have over $4000 annual income and no active bankruptcies. And, you must be over 18 years of age, obviously.
  • Monevo Auto Loans asks for a minimum credit score of 500 and offers a car loan at 3.99% to 35.99% APR between 3 months and 12 years, but you must be a legal US resident, so many who moved to America on a working visa do not qualify.
  • Car.Loan.com has perhaps the most flexible rates. They ask for a minimum credit score 300, and their APR rates and loan term periods all vary depending on the lender, but you must be a US citizen with a current US address, and you must be employed full-time (guaranteed fixed income is a must).

These are all personal loans, and they are notoriously hard to get, but it is what it is. There are online loans that were quite approachable back in the day, but many have tightened their requirements long ago. However, you will probably get a response about your loan status and availability very quickly, while it lasts for ages with the banks.

Fast cash, title loans, and payday are also up for consideration, but they are extremely limited regarding the amount. However, these might be a good option if you are tweaking your vehicle to meet the requirements for Uber work. You need your car to be:

  • Less than fifteen years old
  • Have four doors
  • Room for four passengers or more
  • No obvious cosmetic damage, missing pieces
  • Good overall condition
  • Can’t be a rebuilt, reconstructed, salvaged, or custom-built vehicle
  • No taxi or other commercial paint jobs

Is car rental for Uber also available?

Renting a car to work as an Uber driver is still very available and quite the popular choice, but it is not a long-term option. It has several drawbacks, like the fact that you can’t customize the vehicle, and you can’t use it for purposes other than driving for Uber.

Insurance for Uber Drivers

If you are renting a car for Uber, you must be a listed insured driver. However, suppose you own one or have financed it through a personal loan. In that case, insurance won’t be a problem because the conditions Uber has for vehicles are usually higher than most insurance companies impose.

Some of the praised companies with the best quotes for insuring Uber as well as Lyft drivers are listed below with their Insurify composite score beside the names:

  • USAA (94)
  • American Family (88)
  • GEICO (87)
  • Allstate (86)
  • Erie (85)

Avoid subleasing cars

Subleasing cars also became a trend nowadays because it lets the owner treat its vehicle like a real estate of sorts. They can rent it while they pay off the loan, and many drivers share the vehicle, meaning the car is driven in double shifts.

This may seem like a good idea, but insurances have rules that go directly against this, and if anything bad happens, your loan won’t recognize the other person involved, only the one named in the contract.

If you want to become an Uber or Rideshare driver then you are likely one of the millions of people that could benefit from taking out a car loan so you can hit the road in a vehicle that both looks the part and is comfortable for both you and your customers. However, it’s also vital that your car is up to scratch so it meets the criteria laid out by your rideshare driving company.

If you’re one of the many people who are in need of an upgrade, consider taking out a car loan with the information laid out above in mind.