Driving for Uber or Lyft could make it tough to get a car loan for your next car
(KUTV) Michael Robbins drives for the ride-share company, Uber. He told his credit union as much when he went to get an auto loan to buy a new car. He says he was shocked by how the lender responded.
"They turned me down due to the fact that I drive for rideshares," he said. "Initially they told me, due to insurance issues and business license issue."
Michael says he protested, but to no avail.
His calls to other lenders got similar responses, he says.
“They just said this is our policy and that's just the way it is and we aren’t going to change it," he said.
Michael banks at, and was first rejected by, America First Credit Union. In an email, PR & Community Outreach Manager Nicole Cypers clarified AFCU’s policy. In short, AFCU’s Vehicle Loan Procedure considers people who drive for Uber or Lyft to be their own business owners. Their policy forbids vehicle loans for Uber or Lyft drivers, "on a personal account but they can be considered under a business account following business lending guidelines,” Cypers writes.
Those guidelines include getting a business license in order to get a business loan.
But then something changed.
Two weeks later, Cypers wrote that AFCU has decided to change its policy.
"Your inquiry into lending for vehicles for Uber and Lyft drivers, gave us an opportunity to review our lending policies and to research these types of loans," Cypers wrote. "We found out that most cities do not require Uber and Lyft drivers to have a business license. This will allow us to process these types of loans as consumer auto loans, giving us more opportunities to serve our members."
AFCU's new policy may be unique. Several news reports confirm what Michael says he was told by many lenders: they will not give customers a loan for a personal car if they plan to drive for Uber or Lyft.
Michael says he hopes other drivers learn from his experience.
"The financial institutions are basically discriminating against that industry," he said.
Rideshare driving is a growing industry. Some city and state rules, as well as business policies, don't always jive with the service. Friction between certain cities and their municipal codes and the rideshare companies has been widely reported around the country, including in Salt Lake City.
In 2015, Utah governor Gary Herbert signed a bill that created statewide regulations for ridesharing companies.