Buying a car without a cosigner is entirely doable, even if you have no credit or bad credit. While it may come with challenges, understanding your options and taking the appropriate steps can help you secure financing.

Your credit score will matter

Your credit score is critical in determining whether you can qualify for auto financing without a cosigner. It reflects your financial history and creditworthiness and directly influences your terms, such as the interest rate and monthly payment amount.

General credit score ranges:

• 300-579: Very poor

• 580-669: Fair

• 670-739: Good

• 740-799: Very good

• 800-850: Exceptional

Financing options when buying a car with no cosigner

There are a few avenues to explore if you don’t have a cosigner:

1. Subprime lenders

Subprime lenders specialize in working with borrowers with low or no credit scores. While they may approve you with a score as low as 400, their financing often comes with higher interest rates. Be sure to understand the car’s total cost as financed before committing.

2. Credit unions

If you’re a credit union member, you may find they have more flexible lending criteria than traditional banks. Credit unions often prioritize their members' financial well-being, making them a good option for first-time buyers or those with less-than-perfect credit.

3. Buy here, pay here (BHPH) dealerships

BHPH dealerships offer what’s called in-house financing, where you don’t directly deal with a third-party lender. However, BHPH financing often has higher interest rates and shorter repayment terms. Review their terms carefully to ensure it fits your budget.

Rebound strategies if you’re initially denied

If securing auto financing without a cosigner proves difficult, consider these alternatives:

Boost your credit score

• Pay bills on time to establish a positive payment history

• Reduce existing debt to improve your debt-to-income ratio

• Check your credit report for errors and dispute inaccuracies

Save for a larger down payment

If you can’t find favorable financing terms, postponing your purchase to save for a sizable down payment can make a significant difference (aim for 20%, if you can). A larger down payment reduces the lender’s risk. As a bonus, you’ll pay less interest over time.

Explore bad credit auto financing

Some companies specialize in providing auto financing for bad credit. While this type of financing may have higher interest rates, it can be an immediate solution if you need a car urgently, even if you’ve been declined elsewhere.

No cosigner, no problem?

While buying a car without a cosigner may come with higher interest rates and stricter repayment terms, it’s entirely achievable with preparation and persistence. Focus on improving your credit score, saving for a larger down payment, and exploring all your financing options to secure the best possible deal.

Going this extra mile may allow you to purchase a vehicle without relying on a cosigner. Start the process online with Credit Acceptance today to see if you pre-qualify for auto financing.