It’s easy to feel discouraged after an auto loan denial, but there’s no reason to panic. Just because you were denied in the past (or even today!) doesn’t mean you’re out of the running just yet. They are ways to improve your chances of getting approved for a car loan – it can help to work with the right lender for your situation.

Common Auto Loan Denial Reasons

It’s not always possible to qualify for an auto loan every time you apply for one. Your current personal situation, income, credit history, and even the vehicle you want to finance can all influence your chances of getting approved for a loan.

Two of the most common auto loan denial reasons are a lack of income and a poor credit score. Here are some ways to combat these and increase your chances of getting approved for vehicle financing after denial.

Problem: Not Enough Income

To qualify for a car loan, you need to meet income requirements. A stable income is a key component of getting approved for vehicle financing. Additionally, many lenders also have work history stipulations that require you to be at your current job for at least six months to one year.

The specific income requirements vary depending on the type of lender you’re working with, and how much you're hoping to finance.

Generally, if you bring in a monthly gross income of around $1,500 to $2,500, you’re likely to meet the income requirements of many auto lenders if you’re aiming for a modest vehicle. Having stable work history helps, too.

What’s Next? Consider a Joint Auto Loan

What’s Next After an Auto Loan Denial?The amount of available income you have matters as well. If your income is tied up with other obligations or loans, or your monthly income doesn’t make the cut, consider a joint auto loan with a co-borrower.

Co-borrowers help you meet income requirements by adding their income to yours, and if approved, the loan is called a joint car loan. Most lenders prefer life partners and spouses as co-borrowers since you can prove that your resources are pooled together. Instead of just your name and the lender’s name listed on the vehicle title, the co-borrower’s name is listed, too. This means you both have obligations to the auto loan and get equals rights to the vehicle. Co-borrowers can often help borrowers get into larger loan amounts.

Problem: Bad Credit

Your creditworthiness is defined as your ability to borrow money, and your credit score serves as a way for lenders to make a quick judgment about your past credit history. Borrowers with a credit score around or below 660 are generally considered bad credit borrowers.

With a credit score in this range, it can be tough to find a lender willing to work with you. Traditional auto lenders put a lot of stock on your credit reports and score. If your credit history isn’t quite up to snuff, it can mean getting denied for vehicle financing.

What’s Next? Consider Special Financing

There are lenders willing to assist borrowers with less than perfect credit, though. If you work with a special finance dealership that’s signed up with subprime lenders, your credit score is only one piece of the equation.

Subprime lenders look at your situation in terms of income, down payment amount, work history, living expenses, financial and residential stability, and other factors. Instead of just relying on your credit score to make an auto loan approval decision, a larger picture of your financial situation is considered.

Many subprime lenders have first-time buyer programs too since they can tell the difference between no credit and bad credit. They also assist borrowers whose credit score has dropped due to setbacks such as bankruptcy and repossession.

Not Sure Why You Were Denied Auto Financing?

If you’re not entirely sure as to why you can’t get approved for an auto loan, ask the lender that denied your application. Lenders are required to let you know why they denied you, most often in the form of a letter. If you applied for vehicle financing with a direct lender, you may be able to ask them in-person and discuss what your next options are.

Don’t be afraid to ask questions about how you can improve your chances of getting approved. Everyone’s situation is different, and some lenders don’t work with borrowers with unique credit situations. Many traditional auto lenders prefer borrowers with clean reports, and even with a good credit score, there may be something in your credit reports that a lender can’t work around.

A good way to prepare yourself for a car loan is to check your credit reports and scores. You can request a free copy of your credit reports from This is a trusted government website, and you can request all three of your credit reports from Experian, TransUnion, and Equifax. These credit reporting agencies could report different information, so be sure to review all three to see what lenders are seeing when you apply for new credit.

Taking the Next Step

Even when you’re prepared with sufficient income to pay for a vehicle, and you know what’s on your credit reports, bad credit can still get in the way of your next auto loan. If this is the case for you, it may be time to look for alternative lending options.

Here at Auto Credit Express, we want to make it easier to find the subprime lenders that are equipped to assist with unique credit challenges.

Over the last two decades, we’ve maintained a nationwide network of special finance dealerships. Get on the road to vehicle financing by filling out our free car loan request form. We’ll look for a dealer in your local area that has bad credit lending resources.