Getting a car loan is harder than ever these days, especially if you don’t have any credit or have any bad credit at all.  Even one late credit card payment can keep you from getting a car loan.  But you need transportation, what can you do to get a car if you can’t get a loan?

The first thing anyone who has ever had trouble financing a car will tell you is don’t give up.  There are financing companies who will work with you if you have no credit.  Don’t take the first denial to heart, it happens to the best of us at some point in our lives.  If you can’t get the first car you had your sights on, move on to the next lot and try again.

If you don’t have any credit at all, you may want to first apply for a credit card in order to build your credit.  Get your credit card and use it a few times, make your payments a week in advance and pay a little more than the minimum each time, but leave a balance on the card.  Some creditors prefer to see that you are making monthly payments rather than paying your credit cards off each month because somehow they think this shows more responsibility, even though most of us know that the opposite is true.  Wait about three months and try for a car loan again.

This trick works for some people, but not for everyone, especially if you have had any credit problems in the past.  You may need to secure a co-signer.  This can be a parent, grandparent, close friend, or anyone who has good credit.  A co-signer is someone who signs the loan note with you in order for the loan company to have someone to fall back on in case you default on your loan payments.  They will go after the co-signer for the payments instead.

It is difficult to find a co-signer for many people because those with good credit are afraid that if you can’t make your payments they will get stuck with them.  And if they can’t pay for your car, their credit will be ruined as a result.  If you can’t find a co-signer, and it becomes obvious that you won’t get a car loan through traditional financing, the next course of action is to begin looking for a good used car at a Buy Here Pay Here type of lot. 

Buy Here Pay Here lots are used car lots that offer in-house financing.  In other words, you take your car payment to the lot and drop it off every week or two weeks.  Rarely will they allow you to make monthly payments, they want their money more often than that.  They will finance almost anyone at Buy Here Pay Here lots as long as you have an income.  But these are the bullies of the industry, too.  If you are one day late on your payment, some of these lots will repo your car without warning.  These lots are a great last resort option, but don’t be late with your payments!