Buying a car is a rite of passage, and owning a car is a necessity in many places. But it’s not always the most straightforward process. From researching different cars and taking test drives to comparing loan interest rates, it’s even more complicated if you’re going into the car-buying process independently.
Having bought my first car in July, the process was nerve-racking, especially as a fresh college graduate with minimal credit history and new employment. Ultimately, though, I found success with a local dealership that offered lower interest rates to recent college grads (a program that many dealerships have an equivalent of).
Even if you can’t find a dealership with a similar program, there are plenty of other ways to buy a car without a co-signer. As long as you meet a few qualifying criteria, it’s possible to get a reasonable deal on a vehicle.
If you have a family member or close friend with good income and credit, they may qualify to serve as a co-signer for your car purchase. When someone co-signs your auto loan, they provide the dealership with their financial information and pledge to take responsibility if you fail to make a monthly payment.
Having a co-signer can be a simple way to qualify for a good car deal, especially if your co-signer has an excellent credit history, but it doesn’t mean it’s the only way. If you don’t have anyone willing to co-sign your loan, you may still qualify for a car loan if you explore multiple lenders, make sure your credit and income are in good standing, and are open-minded about the type of car you purchase.
You don’t technically need a co-signer to buy a car. However, it can make you a more attractive buyer in the eyes of a lender, especially if you are a first-time buyer. If you have a limited or unfavorable employment or credit history, you’ll likely be deemed a risky buyer. Having a well-qualified co-signer reassures the lender that payments will continue to be made if you fail to do so for whatever reason.
While having a co-signer can be beneficial when applying for a car loan, it’s a big responsibility for the person co-signing, and sometimes even close family members or friends are unwilling to do it. Here are a few things you can do to improve your odds of successfully qualifying for a loan independently if you don’t have strong credit.
Credit unions can often be a good alternative to financing a car outside of an auto dealership or other lender. Many credit unions are known to have lower interest rates on loans and put a higher priority on flexibility and personal connection with their members compared to auto dealerships or other types of banks. However, be aware that some credit unions may still deny you if you have a limited credit history.
Even if you don’t secure a loan through your credit union, you can still get loan preapproval through your credit union. If you are preapproved with a low interest rate, you can use said rate as leverage with dealerships or other lenders as you shop around for a vehicle.
Read more: See our picks for the best credit unions of the year
If you have a limited or unfavorable credit history, there are a few options outside of a traditional auto loan through a dealership or bank. Several online and in-person financing options market themselves with having high approval rates, no credit requirements, lower down payments, or longer payment terms, which in turn makes monthly payments lower.
For example, online lender Carvana offers financing to any prospective buyer over 18 without bankruptcies and a minimum annual income of $5,100, so long as you haven’t defaulted on a Carvana loan in the previous two years. For those who want a more traditional dealership experience, CarMax Auto Finance accommodates most credit profiles and offers prequalification online.
Be aware that while you may get approved with no credit or poor credit, the terms will likely be less favorable compared to other options.
Another alternative to traditional financing from an auto dealership, bank, or credit union is taking out a personal loan. Personal loans can be used for almost any purpose and are given in a lump sum, which you then pay off in fixed monthly increments. Personal loans also give you the freedom to shop around from a variety of different lenders.
While taking out a personal loan to finance your car can be beneficial to some, it’s generally not the best option for an auto loan. Because personal loans are unsecured, meaning there is no collateral on the loan, they typically have a higher interest rate than traditional auto loan options.
Furthermore, personal loans are typically unsecured; that means they’re often harder to get approved for, requiring a high credit score and good credit history. So if you are already struggling to get approved for a car loan via more traditional methods, you might also find it tough to qualify for a personal loan. There are personal loans specifically for people with bad or no credit history, but those loan terms are usually much less favorable.
Still, personal loans can be a good option for some first-time car buyers. For instance, if you’re purchasing an older car or a used vehicle with high mileage, you may have trouble getting a traditional auto loan. A personal loan could be a good option to pursue if you don’t have enough cash to secure the vehicle.
Once you have secured your financing or loan preapproval for your vehicle, it’s time to start shopping. After doing your research on what type of vehicle you are interested in and what features you are looking for, here are a few other things to consider when thinking about what cars you’ll best qualify for as an independent buyer:
Many dealerships, as well as banks and credit unions, offer first-time car-buyer programs. While most of these programs don’t expect you to have a co-signer or an extensive credit history, many will still require you to have a good credit score, a good existing credit history, and proof of income. Shop around with multiple lenders to see which first-time buyer programs in your area offer the best interest rate and lowest down payment for the vehicle you want.
A three-year-old vehicle is, on average, around $13,435 cheaper than a brand new car, according to Edmunds — and is often easier to qualify for compared to a new car. By shopping for low-mileage used cars, you could find a vehicle in good condition that is both less expensive and slower to depreciate compared to newer models.
Just make sure you run an inspection before committing to a car to learn about any previous issues or accidents the vehicle has experienced, as well as any previous maintenance issues the owner had before you.
If you were previously a car owner or were gifted a car, you can trade in your older vehicle and put that cash back into your new vehicle. This can help you by allowing you to put down a larger down payment or lowering your monthly payments.
According to JD Power, someone buying a car can save $834 on a new car worth $42,000 by trading in their previous vehicle. The exact value you can expect on your vehicle depends on various factors, including the car’s condition, history, and depreciation rates.
If you don’t have a vehicle to trade in, you may have to put more money into your vehicle than you initially planned, either as a larger down payment to secure your car or by paying more into your car monthly. While experts recommend a down payment of 10% on a used car and 20% down on a new car, putting down a larger down payment can help you more easily secure the car you want.
As far as average monthly car payments, Experian’s 2025 State of the Automotive Finance Market report says auto loan payments averaged $745 per month for new cars and $521 per month for used cars. So expect to pay similar, or possibly even more, when buying your car without a co-signer.
Read more: How much you should save before you buy a car?
If, after approaching multiple lenders and looking at more affordable car options, you still aren’t able to secure a car with a price tag you can stomach, here are some long-term solutions you can pursue to qualify for the car that fits your needs:
Most car lenders want applicants with a credit score of at least 661 and a lengthy credit history, which showcases responsible credit usage and financial management skills. If you don’t urgently need new transportation, spending a few more months or even one or two years improving your credit score can greatly help you qualify for the car you want.
Showing proof of stable income and references to your current place of employment is also a big part of qualifying for the car you want. Most auto sellers want independent buyers to have a full-time income (or at least part-time streams that equate to full-time income) to make sure they will be able to afford the car’s monthly payments.
Read more: 7 ways to improve your personal cash flow
If you are unable to secure a car through a traditional dealer, consider buying a car through private sellers such as local used car sales, auctions, or online listings. If you secure a car through a private seller, make sure to do your research on the vehicle’s history and previous ownership.
An auto loan is a type of secured loan used to finance your vehicle. When you buy a car with an auto loan, the lender pays the seller the full amount once the loan is issued. Then, you make monthly payments to the lender over a several-month term (usually somewhere between 36 to 96 months), paying off the original amount plus interest. If you miss multiple monthly payments or are otherwise unable to repay your loan, your lender can repossess your vehicle.
While it’s definitely possible to buy a car independently and even qualify for a good deal, there are a few things you might have to accept:
-
Used car: Unless you have the money for a large down payment and high monthly payment, it might be most logical for you to invest in a more affordable used car.
-
Higher monthly payment or down payment: Many dealerships view first-time buyers as risky, so you may have to accept putting more money into your car, either initially or through your monthly payment.
-
Higher interest rate: If you don’t get bogged down with higher payments up-front, your lender could offer you a deal with higher interest rates. On the other hand, many first-time buyer programs actually offer lower interest rates to certain favorable buyers, such as recent graduates or those with full-time work.
This article was edited by Alicia Hahn.
