Can You Buy a Car with No Credit?

Get Car Financing
Even with poor credit.

By

Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


, - December 15, 2017

Buying a car is an exciting time. But if a borrower has no credit, it’ll be a lot harder to get financed. Credit scores and histories help lenders gauge borrowing behavior based on how someone has handled credit in the past. How can a borrower approach this dilemma?

Car Buying Options

According to Experian, one of three major credit bureaus, 11 percent of Americans have no credit file. These people are known as “credit invisibles,” and may find themselves in a tough situation if they plan to buy a car.

Lenders approve or deny applicants by evaluating their credit histories. When there isn’t one to work with, lenders are naturally more wary. However, a borrower can increase their approval chances with a few strategies. Some options are:

  • Find a cosigner – Most lenders recommend someone with no credit history obtain a cosigner for an auto loan. Cosigners must have good credit and be willing to sign their name on the loan. They’re putting their credit at risk, so make sure both the primary borrower and cosigner understand the potential risks before signing.
  • Increase down payment – Lenders typically require a down payment if a borrower has no credit. The more money down, the better the chances of getting approved. Down payments also provide borrowers with several money-saving benefits, so get saving!
  • Don’t settle – Savvy consumers should shop around for auto loans and not agree to the first loan offered. There may be additional options if the borrower’s situation is unique, such as being a recent graduate. Discuss what options are available with multiple lenders to find the best deal.

So, it’s very possible to buy a car with little to no credit history. Just be aware that it’ll take some extra steps and more time. It’s important to know what specific steps to take as a borrower with limited credit, and how to get the best deal possible.

Bottom Line

It isn’t going to be an easy process for someone with no credit to finance a car, but your chances are better when you work with the right dealership.

CarsDirect works with an extensive network of special finance dealers who can help people in challenging credit situations, even people with no credit. Let us connect you with a local dealership. Get started by filling out our auto loan request form today.

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


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