What if I Can’t Find a Cosigner for a Car Loan?

Get Car Financing
Even with poor credit.

By

Contributing Writer

Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.


, Contributing Writer - December 14, 2020

Often, bad credit borrowers are asked to have a cosigner to qualify for an auto loan, but what do you do if you can’t find one? You still have car loan options, you just have to know where to look.

Bad Credit Car Loans Without a Cosigner

Cosigners are a good way for borrowers to qualify for an auto loan when their credit score isn’t up to par. They attach their their good credit score to the loan to help the primary borrower meet the lender’s requirements.

However, not everyone has this resource. If you can't find a cosigner for a car loan, you can either wait until your credit score is better, or you can explore financing options for borrowers with bad credit.

There are bad credit auto lenders called subprime lenders. To meet their lending qualifications, you don’t need a perfect credit score because they specialize in assisting borrowers with credit issues.

Subprime is a classification of bad credit. If your credit score falls below around 600, you’re typically considered a subprime borrower. Borrowers in this range tend to miss the credit score requirements of traditional lenders, so alternative financing methods are a good next step to getting the car loan they need.

If you can’t find a cosigner and don’t qualify for traditional auto loans, this could be the route for you.

How Can Subprime Lenders Work With Bad Credit?

These lenders are indirect, and they’re signed up with special finance dealerships. This means you don’t meet with the lender, and you work with the special finance manager at the dealer.

For many traditional lenders, having a poor credit score is enough to get turned down for auto financing. Subprime lenders, on the other hand, look at more than just your credit rating. They request items from you that give them a better idea of your overall stability. Because these lenders look at your situation as a whole, your credit score is just one factor in the whole process.

To see if you’re ready for a car loan, they usually ask about your work history, income, living expenses, credit reports as a whole, and other things. They typically require items such as:

  • Computer-generated check stubs
  • Recent utility bill or bank statement in your name
  • Down payment of at least $1,000 or 10% of the vehicle’s selling price
  • Recent phone bill
  • Valid driver’s license
  • List of personal references

These are the most common items you can expect to need to qualify for a subprime auto loan. Depending on your personal situation, you may need more to give the lender a clearer picture of your circumstances.

Other Bad Credit Auto Loan Details You Should Know

To get a subprime car loan, you first need to find a special finance dealership. You submit all your documents there, and it gets verified by the special finance manager who sends it along to one or more subprime lenders. If you qualify for financing, the maximum car payment you qualify for is sent back to the dealer.

From there, you choose a vehicle that fits that payment, your needs, and the lender’s stipulations. You take delivery of your car and start your journey to credit repair!

Yes, you read that right. Subprime auto loans are reported by the credit bureaus, so your on-time payments improve your credit score. This is perhaps the biggest advantage to financing with a subprime lender, since you can boost your credit score for future purchases. A better credit score increases your chances of qualifying for better car deals and lower interest rates.

Finding a Special Finance Car Dealership

Not everyone has a family member or friend that can cosign an auto loan for them. However, you’re not alone, and you’re not out of luck for getting a car loan.

Here at CarsDirect, we work hard to match bad credit borrowers to dealerships that are signed up with subprime lenders. We want to help you too, so fill out our free auto loan request form. We’ll look for a dealer in your local area with bad credit lending resources, and there’s never an obligation. Get started now!

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, Contributing Writer

Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.


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