Some people achieve excellent credit by paying their bills on time and not letting accounts get delinquent. When these individuals need to finance high-dollar items, like cars, the process is typically pretty easy with lenders competing for their business. However, that isn’t the case for consumers with bad credit or no credit.
Perhaps credit card holders got behind on a few payments, making their scores drop. Then again, maybe a person fell on hard times and had a car repossessed a few years back. That’s certainly something else that could impact their credit negatively. Of course, poor credit isn’t the only problem people face. Instead, no credit can seem troublesome on occasion for car shoppers.
How to Finance a Car with No Credit or Bad Credit
However, there is some good news. Even with no credit or bad credit, you can still get a car financed. Below are some ways to get car financing even if your credit’s not in the best shape.
Obtain a Loan
Some lenders focus on bad credit car loans specifically. Thus, if your score leaves a lot to be desired, don’t fret because all may not be lost. To help you find them, use a loan directory like Smarter Loans and have a look at who’s operating in your area. You can also check with local banks and credit unions to see if you meet the requirements. Then, if you do, you can submit an application and hopefully get approved for the auto loan.
Also, you may wish to apply with lenders who specialize in online transactions. With that alternative, you’ll just input your data into the fields and apply to determine if you’re approved.
Meanwhile, those with no credit should look for loan companies that work with first-time buyers. Of course, people have to start getting their credit up somewhere. So, seek out a first-time buyer’s program, as that might be the perfect solution to your no-credit dilemma.
Consider In-House Auto Financing
Another way to get financed for a vehicle with little to no credit is to find a dealership that offers in-house auto financing. You can probably listen to the radio or browse around online to locate one. These businesses often have commercials promoting how they are no credit and bad credit friendly. Additionally, you could always drive around dealership hotspots to see which ones are enticing buyers with no credit or bad credit to stop by.
Or are you looking for more trustworthy resources? If that’s the case, you can ask friends, family members, and co-workers about their recent in-house auto financing ventures.
Put Down a Hefty Down Payment
If money for a down payment isn’t a concern, consider shelling out a substantial amount upfront to get financed for a new ride. Some banks and other lenders won’t even consider giving out loans to buyers with no credit or bad credit without them first putting down a hefty deposit. So, the answer is yes, you can get financed for a car with less-than-perfect credit, but it may take a sizeable down payment to accomplish the feat.
Find a Co-signer
Is your credit lacking these days, and do you also not have a ton of money to throw around as a down payment? There could be a suitable alternative. If you know someone with excellent credit who will co-sign on a vehicle with you, that is an easy way to get car financing with no credit or bad credit. The person can be anyone you trust, like a parent, sibling, co-worker, or a good friend.
Just be sure to make all of your payments on time. The last thing you’ll want is to get behind on payments and have it impact the credit of the person who stuck their neck out for you.
Buy From a Family Member
Buying a car with no credit or bad credit can be challenging, but it doesn’t have to be. On occasion, family members will sell vehicles to their relatives. They often want a total sum upfront, usually in the thousands. However, it might be possible to purchase a financed car from a family member.
For instance, the seller might let you pay $500 as a down payment. Then, it depends on what the agreement is, but you could spend $100 to $300 or more each month making payments. Anyone who goes this route should make it a point to pay on time because relationships can take hits if issues develop.
Final Thoughts
Hopefully, you now know how to finance a car with no credit or bad credit. So, what are you waiting for? Don’t let bad credit or no credit stop you from getting a car. Start shopping around, and you could soon be riding around in the vehicle of your dreams.
