If you have bad credit and no cosigner, can you still get a car loan? You can, you just need to find the right dealership to work with. Here at Drivers Lane, we can connect you with a local dealer that can help, but before we do that, we want to make sure you know which type of dealerships offer no credit, no cosigner auto loans.
No Credit, No Cosigner Car Dealerships
When you're talking about no credit, no cosigner dealers, it's likely referring to an in-house finance dealership. Commonly called buy here pay here (BHPH) dealers, these places offer car loans in-house, which means they're both a lender and a dealership.
No credit, no cosigner dealers are one-stop shops, and are a good place to get a loan if you have no credit or bad credit. The main reason why is because most in-house financing dealerships don't run credit checks, which makes it easier to get approved for financing.
Instead, they base approvals on your income. As long as you have a qualifying income, you shouldn't have an issue getting approved for an auto loan at this kind of dealer – regardless of your lack of credit and even if you don't have a cosigner.
When it comes to their income requirements, no credit, no cosigner dealerships look to see if you have enough income after bills to support a car and insurance payment. A good rule of thumb is to expect to need to make a minimum pre-tax monthly income of somewhere around $1,500 to $2,000 in order to qualify.
These dealers also aren’t concerned about the source of your income – you could have multiple jobs or government benefits and still meet their income requirements.
To prove your income, make sure you bring in a recent computer-generated pay stub showing year-to-date earnings if you’re a W-2 employee; recent tax returns and bank statements if you're self-employed, receive tip income, or are an independent contractor; or a benefit statement if you receive a government check.
Drawbacks of No Credit, No Cosigner Car Dealers
Sure, no credit, no cosigner dealerships make it easier to get approved for financing, but they come with some major drawbacks.
For starters, they usually don’t check your credit, which may mean they don't report your on-time payments to the credit bureaus. Unfortunately, this would mean you can't improve your credit score with an auto loan from one of these places. You're going to want to make sure to ask about their reporting practices ahead of time, as this can be a deal breaker for some buyers.
Another downside is the down payment requirement. In-house financing dealers almost always require money down, and there's no universal down payment standard they stick to. Instead, the amount of money down needed typically depends on the price of the vehicle you choose. Be prepared to make a down payment, and ask about their requirements ahead of time.
Finally, no credit, no cosigner car dealerships have a wide range of used vehicles on their lots, but you’re not going to find any new models. Inventory can range from hidden gems that are only a couple of years old to older cars with higher miles. Because you're going to be getting a used vehicle, it's a good idea to have a certified mechanic perform a pre-purchase inspection before finalizing your decision.
Find a No Credit, No Cosigner Car Dealership
Whether you choose to go through a no credit, no cosigner dealer or a special finance dealership, Drivers Lane can help you get connected to a local dealer that has the lending resources you need.
To get the process started, all you have to do is fill out our free, no-obligation auto loan request form. After that, we’ll get right to work matching you with a dealership in your area.