How to Finance a Used Car with No Credit History

August 27th, 2015 by

Learning how to finance a used car with no credit doesn’t present as many problems for Somerset, Johnston, and Providence drivers as people first assume. There’s nothing worse than finding the right model only to be denied for a loan based upon your lack of established credit, but there are a number of ways you can bypass that hurdle completely.

Traditional Options

There are a few strategies to be aware of when it’s time to finance a used car with no credit, and they are easier to use than most people think. Somerset, Johnston, and Providence residents may:

    buy_here_pay_here_car

  • Find a Co-Signer: If you can convince someone with good credit to co-sign with you, it will drastically increase your chances of acceptance. Your co-signer would act as a guarantor in the event that you were unable to make payments.
  • Increase The Down Payment: Not the most popular option, but you may find it necessary to use cash for a larger initial payment. On the positive side, your loan amount and monthly payments will be reduced, too.
  • Find a Suitable Loan Program: You might be able to find lenders with programs tailored specifically to your needs. For example, many programs exist for buyers who have just graduated college or are enlisted in the military.

If you’re not able to take advantage of any of the above options, then it’s time to consider Buy Here Pay Here (BHPH) financing.

Buy Here Pay Here

BHPH is a useful alternative to finance a used car with no credit. As the name implies, it simply involves arranging the loan and making payments at the dealership where you found the vehicle. The benefit of the BHPH option is the convenience of a one-stop shopping process, since all financial matters are taken care of by the dealership.

Most importantly, loan decision are often approved by dealerships since they value your business; credit history just isn’t as much as an issue with BHPH if you can demonstrate a steady income and provide a permanent address. This is also a perfect way to build a solid credit history. Maintaining a strong relationship with a dealership will position you to obtain more advantageous loans and lease rates further down the road.

Come to Shannon Motors to Find First-Rate Financing

Shannon Motors has dealerships in Somerset, Johnston, and Providence, so finding your used car couldn’t be more convenient. We’re also proud to offer BHPH financing to help you build a strong credit history. For more information about your best financing options, contact our sales experts today.

Posted in Car-Buying Advice