You can get a car loan with bad credit at your local dealership, but what about a bad credit auto loan without a cosigner? At Auto Credit Express, we can get you approved in minutes.
Just a few years ago, car lenders demanded that you have a good to perfect credit score to land an auto loan approval, and if you didn't have great scores, you better have a large down payment and a cosigner ready to go. Nowadays, some lenders are loosening the reins, and offering bad credit car loans to people that don't have a cosigner. And no, this isn't too good to be true!
A cosigner is usually a family member or friend of the person that needs a loan but doesn't have the credit to get one on their own. The cosigner must have a better score than the primary applicant, and be able to balance out their bad credit score. This person will be added as the co-buyer on the loan agreement, and if the primary borrower cannot afford the payments, the cosigner then becomes legally responsible to pay back the remaining balance on the loan. All timely and untimely payments are reported to both parties' credit reports and will either help – or hurt – their scores depending on whether the payments are made on time or not.
Where to Get No Cosigner Poor Credit Car Financing
In most cases, when someone begins the car financing process; they go straight to their local car dealership, they pick out a car, and apply for the loan. When you have bad credit and you don't have a cosigner the process is somewhat different. With damaged credit the first thing you should do is apply for a pre-approval online. This allows you to know exactly how much you can be approved for and gives you a piece of mind knowing that you won't be turned away at the dealership.
You should be working with dealerships that offer in-house financing and don't work with a third party finance company. These dealerships are able to construct a loan for pretty much anybody regardless of their credit history. While they suggest having a cosigner for your own benefit, they don't require one, and you will find the process is much easier.
These dealerships are often referred to as buy here pay here (BHPH) or rent-to-own car lots. Often times, they won't even run a credit check on you, and as long as you have a down payment you will be approved. The biggest downfall you will experience with these dealers is that, because they don't pull your credit report to approve you for the loan, they also usually don't report your payments to the credit bureaus. This means that in a few years when you're looking for a new car loan you will need to visit the same dealership – unless of course you took out a secured credit card or other type of financing to build credit.
Why These Lots are Helpful for Bad Credit Buyers
The best thing about financing a used car from a buy here pay here car dealer is that they guarantee your approval. All they want to know is that you make the money to pay your car note. They don't care about what your credit report says, and therefore, they don't care about you having a cosigner on the loan either.
The other good thing about BHPH dealerships is that they will work with your pay schedule to make the payments more affordable for you. This is extremely helpful because:
- Bad credit car buyers experience higher interest rates
- Your payments will be higher with no cosigner
If you don't – or can't – make one lump sum payment each month, you can opt for weekly payments that are consistent with your pay schedule from work.
Cosigners Can Make Your Payments Lower
Let's say you have someone that is willing to cosign for you, but you don't want to ask them to take on that big of a responsibility. You may want to rethink that decision. Having someone else on your loan with a good credit score has multiple benefits for you. For instance, you will experience:
- Lower monthly payments
- Lower interest rates
- Better chance of approval
Having a cosigner will give you a better chance at getting approved for a traditional dealership, and when you have a higher credit score on your application you are likely to receive a lower interest rate. This will not only make your monthly payments more affordable, but also reduce the total cost of the vehicle over the life of the loan.
Can You Finance New Cars with Bad Credit and No Cosigner?
While new cars are shinier, better looking, and cooler in the aspects of technology, they're also more expensive. This is why buyers that are experiencing poor credit scores are suggested to look at used vehicles over new ones. It's not that borrowers with questionable credit don't deserve to drive a nice new car, but because of the higher interest rates that they will experience on the loan, a cheaper used car is more affordable.
The last thing you want is to end up with worse credit scores because you started missing payments on your new car loan because it is just too expensive. You can find a nice, gently used, low-mileage vehicle that fits right into your budget that you can be instantly approved for without needing a cosigner, and you will be just as happy – if not happier.
As We See It
Experiencing poor credit is never a thing to look forward to, but you should also never let it ruin your financial life. If you have learned from your past mistakes, you can get into a great used car on your own without the help of a family member or friend. You don't have to have a cosigner or impeccable credit to qualify.
At Auto Credit Express, we have been helping people with damaged credit find a dealer in their area that will approve them for a car loan for over 20 years. To get started today, use our online car loan application to get your pre-approval. We will then set an appointment with the finance manager at one of our partnered dealerships near you, and you could be driving away in your new-to-you car as early as tomorrow!