Cars and Social Security Disability

If you are approved for disability benefits through Social Security, you likely want to know if you can keep one or more cars. The answer depends on which kinds of disability benefits you will be receiving.

People approved for Social Security Disability Insurance (SSDI) benefits qualified as a result of their disability and the number of work credits they earned before they became disabled. Since these benefits are not based on your existing income, Social Security Administration (SSA) does not care about what you own or the value of the things you own. Whether you have one or ten cars in your possession, the number of vehicles you own will not impact your disability benefits.

To get approved for Supplemental Security Income (SSI) benefits, on the other hand, finances matter. SSI is a needs-based program, and to qualify, you must have extremely limited income and very few assets/resources. If you are unmarried, you cannot have more than $2,000 in assets, and if you are married, the limit is $3,000.

As a general rule, you are allowed to own one car and receive SSI benefits; if you are married, you are only allowed one car per couple. SSA considers car resources, but the agency understands vehicles are important for many people’s transportation needs. Since cars are considered resources, however, owning more than one could disqualify you for benefits because SSA does not believe more than one car is necessary for transportation.

Technically, you can own more than one car, but it is very difficult to do so and remain eligible for SSI benefits. SSA cares about the equity that you have in a vehicle, so if you have little equity in a second car, you might still fall under the SSI asset restrictions. If you own two cars, but one of them is cheap, SSA will exclude the more expensive car and look only at the equity you have in the cheaper one.

If a second car is owned by someone who does not live with you, it will not count against you. If you co-own a second car with someone, SSA will only count your share of that car as an additional resource. And if you think that one of your cars has been incorrectly assessed and is overvalued as a result, you can get your own appraisal and submit a written copy of it to your SSI worker.

What if you are receiving SSI benefits and wish to purchase a car? Lenders may be reluctant to finance someone who relies solely on SSI for income, and your odds of getting a car loan decrease even more if you have a bad credit score. But it is not impossible.

First, check your credit score, and make sure that your information is correct; if not, take the necessary steps to correct the error immediately. Next, if your poor credit score is situational, such as the result of medical bills, tell the lender because it will show that your score is low, not because you neglected payments on purpose, but because of something that happened to you outside of your control. Lastly, try to save up what money you can for a down payment because more money paid upfront will likely get you a better interest rate on the loan.

Please note that if you borrow money to get a car, any funds that you do not spend that month will count toward your SSI resource limit and may result in a temporary suspension of SSI benefits until you fall back below the asset threshold.