It’s possible to get financed for a used car with no credit check, but a down payment is almost always required, especially if you’re struggling with credit issues.
Who Can Help with This?
When you’re concerned about having your credit checked, it’s usually a sign that you’re concerned about poor credit standing in your way of auto financing. Even if your credit is bad, there are options to help you finance a car: specifically, subprime lenders that work through special finance dealerships.
If you’ve been turned down by one of these lenders and are still in need of a used car with a low down payment, you can turn to a buy here pay here (BHPH) dealer. These dealers finance loans in house, and typically won't check your credit. All they usually require for an approval is proof of income. You should be aware, though, that cars from a BHPH dealer are likely to be older used cars. You should also be prepared for higher interest rates.
BHPH Dealers and Your Credit
Taking out a car loan when you have bad credit can be an excellent way to improve your credit by making all your payments on time. Buy and pay here dealers don’t tend to run credit checks, which means they’re less likely to report your on-time payments to the national credit bureaus. Without these reported payments, making your loan payments won’t help you improve your credit the way a subprime loan can.
Also, at most BHPH dealers, borrowers are required to make their payments in person weekly or bi-weekly. Making these payments on time is important not just for your credit, but to avoid negative actions as well. Payments even one day late can sometimes result in repossession when you’re dealing with a BHPH dealer.
Buy and Pay Here and Down Payments
With bad credit, it’ll be practically impossible to find a lender – even an in-house lender – that’s willing to finance you without a down payment. At BHPH dealers, you’ll most likely need to put down at least your first payment, along with a down payment, but these amounts will vary. Typically, subprime lenders require you to put down at least $1,000 or 10 percent of the vehicle’s selling price. With buy and pay here dealers, you may be able to put down a smaller amount, but it depends on your dealer, the vehicle chosen, and your specific situation.
The Alternative Choice
It’s a good idea to know what’s on your credit reports, and to check your credit score before you start shopping for a vehicle. That way, there won’t be any surprises. If your reason for looking for a low down payment and no credit check is because you think you won’t be able to qualify for anything else, you may be surprised by the options available to you.
Here at Auto Credit Express, we work with an extensive network of special finance dealers who have subprime lending resources available to help people who are struggling with credit issues. If you want to find a lender in your area, without all the hassle of going from dealer to dealer looking for one who has the right lenders, fill out our free auto loan request form and we’ll help you with your search.