How to Get a Car Without a Cosigner: The Best Way in 2023

a sheet on a clipboard that says car loans without cosigners

When it comes to financing a car, having a cosigner can often make the process easier, especially for individuals with limited credit history or poor credit. However, not everyone has access to a cosigner. In this guide, we will explore the best ways on how to get a car without a cosigner in 2023. 

We’ll discuss alternative options, steps to take, and important considerations to ensure a successful car-buying experience.

How to Get a Car Without a Cosigner
– Table of Contents – 

1. Understanding the Role of a Cosigner

2. Exploring Options to Get a Car Without a Cosigner

3. Steps to Take When Getting a Car Without a Cosigner

4. What to Expect When Buying a Car Without a Cosigner

5. Ditch the Cosigner and Get Your Car Today

6. FAQs

Understanding the Role of a Cosigner

A. What is a Cosigner?

A cosigner is someone who agrees to be legally responsible for the car loan if the primary borrower fails to make payments. 

Failure to make payments is called default. 

Having a cosigner provides additional security to car lenders, as it reduces the risk of default. They are often used by people with bad credit or no credit history to increase their chances of getting approved for a car loan. 

B. Why Do You Need a Cosigner?

Lenders use credit scores to assess the risk of lending money to borrowers. 

A good credit score indicates that a borrower is a good risk and is likely to repay the loan. A bad credit score indicates that a borrower shows much instability and poses a higher risk of default. 

If you have bad credit or no credit history, you may not be able to get approved for a car loan on your own. 

This is where a cosigner can help. 

A cosigner with good credit can improve your chances of getting approved for a loan.

C. Benefits of Having a Cosigner

Having a cosigner can help you secure a car loan with better interest rates and terms. 

Lenders often consider the cosigner’s credit history and income when assessing the loan application. This can increase your chances of approval and improve the auto loan terms.

D. Pitfalls of a Cosigner

Having a cosigner can be great, but it’s not always feasible. 

By getting someone to agree to cosign with you you’re now responsible for yourself and them as well. 

Since they have promised the auto loan provider that they will pay up in the event you don’t, anything you do affects them too. This means if you pay late or miss a payment, your credit score will be negatively affected.

It can be hard to have that level of pressure hanging over our heads.

Luckily, there are options available on how to get a car without a cosigner.

Exploring Options to Get a Car Without a Cosigner

While having a cosigner can be beneficial, it’s not the only option for obtaining a car loan. Here are alternative approaches to consider.

A. Building Your Credit

Building your credit is crucial when aiming to get a car loan without a cosigner. Start by checking your credit score and taking steps to improve it, such as paying bills on time, reducing outstanding debts, and using credit responsibly. Over time, a stronger credit profile can increase your chances of approval.

B. Save Up a Large Down Payment

Saving for a down payment demonstrates your commitment to the car purchase and reduces the loan amount needed. Lenders may be more willing to approve your loan application if you provide a substantial down payment.

C. Exploring Alternative Lenders

Traditional banks and credit unions may have stricter lending requirements, but alternative lenders specialize in serving individuals with less-than-perfect credit.

This means that they are fully prepared to take someone on with no cosigner. 

Research online lenders, peer-to-peer lending platforms, or lenders that specifically cater to buyers with lower credit scores. 

One big option is to find a local car dealership that offers in House financing on a case-by-case basis.

D. Buy Here Pay Here Dealership for the Win

Buy Here Pay Here (BHPH) dealerships offer in-house financing on a full-time basis. 

This means they provide loans directly to buyers without relying on traditional lenders. It also means that since they specialize in it, they are prepared to do it with anyone who comes through their doors.

These dealerships are more flexible in their approval process, making it easier to get a car loan without a cosigner. 

Our own used car dealerships specialize in this form of non-traditional used car financing. We have a 97% approval rate and have fine-tuned our program to allow 4 of every 5 of our customers to successfully make it through our program.

This means they pay off their vehicle and are able to move on to a better stage of their lives. 

Steps to Take When Getting a Car Without a Cosigner

a man taking a step towards an arrow that leads to a car without a cosigner
Taking steps to get a car without a cosigner

Once you’ve explored your options and decided to get a car loan without a cosigner, follow these important steps:

A. Check and Improve Your Credit Score

Before applying for a car loan, check your credit score and review your credit report. Identify any errors and take steps to rectify them. Pay down outstanding debts, make payments on time, and maintain a good credit utilization ratio to improve your credit score.

Tips for Improving Your Credit Score

There are a few things you can do to improve your credit score:

  • Make all of your payments on time and in full. This is the most important thing you can do to improve your credit score.
  • Pay down your debt. The lower your debt-to-credit ratio, the better your credit score will be.
  • Keep your credit utilization low. Your credit utilization is the amount of credit you’re using compared to the amount of credit you have available. Try to keep your credit utilization below 30%.
  • Get a credit card. A credit card can help you build your credit history. Just be sure to use it responsibly. This means only use it if you have the money already and pay off your full balance every month. 

B. Set a Realistic Budget

Determine how much you can afford to spend on a car.

Take into account factors like your income, expenses, and other financial obligations. 

Setting a realistic budget will help you narrow down your options and avoid financial strain.

C. Research and Compare Different Car Loan Options

Research various auto lenders and loan options to find the best fit for your needs. 

Make sure to compare interest rates, loan terms, and fees. Consider factors like loan duration and monthly payments to ensure they align with your budget as well.

How to Find a Lender That Will Work with You

There are a few things you can do to find a lender that will work with you if you have bad credit:

  • Ask around. Talk to your friends, family, and coworkers to see if they know of any auto lenders that are willing to approve people with bad credit.
  • Do your research. There are a number of websites that can help you compare car lenders and find the best deal. A quick google search can provide you a list to start with. 
  • Shop around. Get quotes from several different used car lenders before you choose one.

D. Get Preapproved for a Car Loan

Getting preapproved for a car loan can give you an advantage when negotiating with used car dealerships. 

It shows that you are a serious buyer and provides a clear understanding of your budget. 

Submit loan applications to multiple lenders to compare offers and choose the best one.

Our own used car dealerships have an online application that helps customers get preapproved for a bad credit car loan without a cosigner. Make sure to take the time to fill them out and give yourself negotiating power. 

E. Test Drive and Inspect the Car

Before finalizing the purchase, always test-drive the car. 

Even the most reputable used car dealers purchase cars and miss a few items. Their people are human after all. 

A test drive can give you a great idea of the broad condition of the used vehicle. However, since you are likely not a technician it would be wise to have it inspected by a trusted third-party mechanic. 

A test drive allows you to assess the car’s performance and comfort. A professional inspection ensures there are no hidden mechanical issues.

It’s a big purchase, don’t skimp on making sure it’s the perfect vehicle for you. 

What to Expect When Buying a Car Without a Cosigner

If you’re able to get a car loan without a cosigner, there are a few things you can expect:

A. Higher Interest Rates

You’ll likely have to pay a higher interest rate. Lenders charge higher interest rates to borrowers with bad credit.

B. Large Down Payment

You may have to put down a larger down payment. A down payment is a portion of the purchase price of the car that you pay upfront. A larger down payment can help you get approved for a loan with a lower interest rate.

C. Limited Choices

You may have to limit your choices. 

Auto lenders may not offer you the same loan terms or interest rates as borrowers with good credit. 

This may limit your choices when it comes to buying a car.

If you opt into purchasing at a buy here pay here dealership, the inventory they carry will be what is available to you.

While our used car dealerships carry over 150 in stock, not every buy here pay here car lot is set up like that. 

D. Closer Relationships

Bad credit car lenders that approve people without a cosigner are typically more involved in the loan process. This means they will keep more frequent contact with you.

They take a closer approach to helping you through the loan and ensure you stay on top of your payments.

Since it is a higher-touch loan, there are more account representatives for a certain amount of loans. This means more communication and a warmer relationship with you.

They will get to know you on a more personal level and work with you further.

E. Flexible Terms

Bad credit car loans without cosigners are more flexible.

They are made to help the borrower make it through the loan as quickly and pain-free as possible.

Since the account reps get to know you more, they are able to work with you on a more intimate level. This means they may be able to help you budget and arrange payments based on your pay schedule so you never fall behind. 

Ditch the Cosigner and Get Your Car Today

a beautiful road with sky blue and orange leading to get a car without a cosigner
ditch the cosigner and get your car today

Obtaining a car loan without a cosigner will require more effort and consideration. 

The good news is that by focusing on building your credit, saving for a down payment, exploring alternative lenders and buy here pay here dealerships, and following the necessary steps, you can successfully get a car without relying on a cosigner.

Remember to approach the process with patience, research, and a clear understanding of your financial situation.

Don’t think that just because you are in a tough position you should accept whatever someone throws your way. 

You have options available to you, so ditch the cosigner and go find the best. 

How to Get a Car Without a Cosigner
FAQs – 

Can I get a car loan without a cosigner if I have bad credit?

Yes, it is possible to get a car loan without a cosigner, even with bad credit. Explore alternative lenders, build your credit, and be prepared to provide a down payment or pay higher interest rates.

What is the minimum credit score needed to get a car loan without a cosigner?

The minimum credit score required varies among lenders. Some lenders have strict requirements and will only accept 650 and above. Others specialize in serving buyers with lower credit scores but will not go into the deep subprime range. This is where buy here pay here dealerships really shine. They do not focus their bad credit auto loans on credit scores.

Are there any disadvantages to getting a car loan without a cosigner?

One potential disadvantage is that without a cosigner you may face higher interest rates. Additionally, your options for loan terms and car selection may be more limited. However, with careful research and planning, you can find favorable loan terms.

Can I trade in my current car to reduce the loan amount?

Yes, trading in your current car can help reduce the loan amount by applying its value as a down payment. The trade-in value will be subtracted from the purchase price of the car being purchased, lowering the loan amount needed.

What are some of the best lenders for people with bad credit?

There are a number of car lenders that offer auto loans to people with bad credit. Some of the best lenders for people with bad credit include:

  • Subprime Car Lenders
  • Private Secured Lenders
  • Buy Here Pay Here Dealerships

What are some of the things I should look for when buying a car with bad credit?

There are a few things you should look for when buying a car with bad credit:

  • The price of the car. Make sure you can afford the monthly payments.
  • The condition of the car. Get the car inspected by a mechanic before you buy it.
  • The warranty. Make sure the car comes with a warranty.

Shameless Plug –
Contact Us Today to Get Approved For Your Pre Owned Vehicle

If you’re in the market for a used car, truck, SUV, or van, and you’re worried about your credit score, we are here to help

Our buy here pay here financing is designed to help you get the pre owned vehicle you need and improve your credit in the process. 

Contact us today to learn more about our selection of pre owned vehicles and bad credit car financing options.

Additional Resources To Help On Your Journey

We love to share the wealth! Here are some resources and trusted vendors that we personally use. They can help you take care of your vehicle as well as keep your credit and finances in tip-top shape:

Car Parts

High Quality and Affordable Car Parts: Advance Auto Parts

High Quality Dash Cams and Car Accessories: Rexing USA or VanTrue or Nextbase

Car Audio & Sound Systems: Econon 

Easy Key Replacement & Programming DIY: Car Keys Express

High-Quality Orignal and Custom Car Lighting: LASFIT

Quality Car Parts/Accessories (mats, covers, assemblies): Oedro

Premium Car Detailing Supplies: Chemical Guys

High-Performance Car Parts & Air Filters: KN Filters 

High-Performance Parts: Max Speeding Rods

Speed and Performance Parts: Spectre Performance

Air Intakes: Airaid

Original & Aftermarket Wheels: OE Wheels LLC

High-Quality Tires Of All Types: Priority Tire or Discount Tire

DIY Car Extras

In the event your dealer doesn’t provide you a history report: VinAudit

To learn to recondition your old car battery: EZ Battery Reconditioning

For DIY Ford vehicle repair: Ford Shop

To learn to take some knicks out of your car’s paint: High Quality Car Spray

If you find yourself in need of a car rental: Discover Cars

If you’d like to see what public car auctions are like: Gov Auctions or Gov Seized Auction

Personal Finance & Credit

To help you improve your credit: Axion Credit Repair or Coast Tradelines

For a DIY credit repair course: DIY Credit Repair

To help you get free of debt and increase your credit: What Lies In Your Debt?

If you’re in a bind and need cash quickly: Bad Credit Loans or Cash Advance

For personal loans of higher quantities: Fortuna Credit or Personal Loans

For a high cash-back credit card (make sure you only use it as if it’s a debit card!): Laurelroad 

We will keep sharing all of our vendors that we have a great experience with. Only the ones we see align with our values as time goes on, both locally and nationwide.