How to Buy a Car Without a Cosigner

If you’re trying to purchase a vehicle with bad credit or no credit, many traditional lenders and finance companies may recommend or require a cosigner to receive credit approval. While a cosigner can increase your chances of getting approved for traditional financing, you can still get a car loan or vehicle financing without one.

First, let’s take a look at what a cosigner is.

What is a cosigner?

A cosigner is someone who partners with you on a credit application to help you get approved for financing. Since a cosigner agrees to apply for the loan or financing with you, they are equally responsible for the borrowed money. For example, if you purchase a car with a cosigner and are unable to make your monthly car payments, the cosigner is obligated to pay on your behalf.

What are the pros and cons of using a cosigner?

While a cosigner can help increase your chances of receiving credit approval for an auto loan or vehicle financing, there are advantages and disadvantages to having someone cosign on a credit application.

Advantages:

• Gives car buyers with bad credit or no credit the opportunity to purchase a vehicle
• Can improve your credit by enabling you to purchase a vehicle and then make timely car payments

Disadvantages:

• The cosigner’s credit history is at risk since he or she is equally responsible for the auto loan or financing.
• If you fail to make car payments, the cosigner will share the consequences.

Can I buy a car without a cosigner if I have bad credit or no credit?

Based on the points listed above, it appears that getting a cosigner carries more advantages for you and more disadvantages for the cosigner. If you’d rather avoid getting a close friend or family member involved in your financial affairs, it is possible for you to apply and get approved for financing to purchase a vehicle without a cosigner.

How can I get approved for auto financing without a cosigner?

If you are someone who has credit problems and is currently in the market to purchase a vehicle, you may qualify for subprime financing, which is financing available to people with low or no credit scores.

Credit Acceptance is an indirect subprime auto finance company that works with more than 12,000 participating car dealers across the nation to enable dealers to approve car buyers with bad credit or no credit for vehicle financing. After filling out a brief form on our website, we will connect you with three of our enrolled dealers in your area who can help you get approved for your next car purchase.

If you’d like to work toward improving your credit before you begin your car-buying journey, here are a few ways you can do that:

• Check your credit report and credit score
• Set a budget and save for a down payment
• Determine a monthly car payment you can afford, along with other car expenses (i.e. insurance, fuel costs, maintenance, etc.)

At Credit Acceptance, we believe everyone deserves a second chance to purchase a vehicle and improve their credit. Since we report to the three major credit bureaus, car buyers with bad credit or no credit have the opportunity to improve their credit with on-time car payments.

Start your auto financing pre-qualification today!