Getting a No Credit Auto Loan

By Mitch Reynolds · Leave a Comment

Getting a no credit auto loan is actually easier than what many people think, and much easier than getting a loan if you have bad credit. You have several options when it comes to auto loans for no credit, so weight each option carefully and decide which one is best for you.

Your first option if you are looking for an auto loan no credit history is to actually build that history. I would recommend this option generally first, as it helps you build you credit and get the auto loan on your own. To achieve this, try applying for a credit card that is designed for people with no credit history—there are many such options out there (almost every company will have one), and are fairly easy to get. Then, after you get such a card, purchase some things with it, maybe carry a small balance (very important not to go crazy with the card, as this will actually hurt your credit rating), and pay it off. Simply making a few payments can go a long way to establishing your credit.

Second option for auto loans for people with no credit – get a co-signer. In order to get my first car I had to have a co-signer (my older brother). I decided to go with him for several reasons, which you should also consider before taking out an auto loan with no credit. First, he had spectacular credit (I think his score was close to 780). Second, he had good, consistent income from both him and his wife. Third, he had lived in his home for several years. These three attributes made him a low risk to the bank…and in turn made me a low risk to the bank and got me a decent rate on the car loan, and I didn’t even have to put any money down.

Still, some people might ask how to get an auto loan with no credit if neither of these options are available to you. In this case, then you are probably best suited to save as much as possible and pay as much as possible down towards the car, thus making you a lower risk to the lender since it will take much more before you could ever get upside down in the car loan. You should not have a problem finding someone to extend a no credit auto loan to you if you can make a 50% down payment, and should be able to find some decent options even if you can’t put down quite that much.