How to Get a Car with No Credit


Auto financing can be a lot tougher if you lack credit. But auto lenders have loosened the reigns and allowed individuals to acquire cars without credit. As an interested car buyer, you will first identify your vehicle of choice, compare prices, and locate a dealer. You will then be faced with the task of convincing the auto lender to give you the car without credit. You are not at a dead end. Getting a car without credit may be difficult, but it is achievable. This is how:

Get a Cosigner

Get a cosigner who has good credit and convince him/her to co-sign your car loan. In doing so, that person agrees to take the responsibility of making payments in case you default. He or she should provide the lender with some options for recovering the loan.

Your responsibility is to let that person know of all the risks involved. A cosigner has the same responsibility (as you) for the loan, and the loan can reflect on their credit report. The cosigner can be a sibling, parent, or spouse, but he or she should have a close relationship with you. Friends and family should be the first people to seek help from. If they are not able to finance your vehicle, they may be able to co-sign.

Gather and Organize All the Documents Detailing Your Financial History

Even though you may lack credit, chances are you have some payments that are detailed in documents. They include:

  • Utility bills
  • Rent payment history
  • Proof of employment history
  • A copy of a bank statement.

The lender may be willing to look in other places to verify that you can afford to make payments; therefore, you need to provide proof that can confirm your financial history. You will appear more creditworthy when you provide sufficient proof that you can pay a reoccurring bill.

Find a Loan That Suits You

Since it is highly unlikely that you will receive a loan from a bank, you can contact the dealership and inquire about the kinds of loan options they have. A dealer may have the capability of getting you a loan, but it can be expensive compared to a bank loan.

For such an arrangement, it is better to get a cheaper car as a first car. This is because the low-cost car will reduce costs and make it easier to obtain a loan. Going for an expensive automobile as a first car will likely increase the costs involved, and this will slim your chances of securing the car loan. It may also be a good idea to check with your employer to establish if your company has a relationship with a financier (like a credit union) who may provide loans to employees. If that is the case, your paycheck will be deducted every month to finance the loans.

Save and Increase Your Down Payment

It will be easier to get a loan when you can make a huge down payment. The best way to achieve this is to save enough until you can pay for a reasonable portion of a car’s total cost. Settling a huge part of the vehicle’s cost will increase your likelihood of being approved for a loan.

Don’t bother looking for a no credit check personal loan.  Unless your car is under a few thousand dollars lenders will want to take a look at your credit profile to ensure your credit worthiness.

Final Thoughts

Getting a car loan with no credit may not be the easiest thing to do. However, with some creative thinking and some help from some trustworthy sources, it is something that is achievable.