carmax.com: Can You Get a Car Loan With Bad Credit or No Credit?
“Is it actually possible to get approved for an auto loan with a bad credit score or even no credit score at all? If so, what’s the catch? This question is a very common concern for auto loan shoppers. That being said, thousands of people with bad credit situations get approved for quality auto loans and purchase vehicles every day, so it is absolutely possible. And the reasons are pretty simple!
First of all, banks are in the business of issuing loans to consumers. In a down economy, like the one carmax.com is currently in, more people experience credit challenges. In order for business to continue as usual, banks need to be less restrictive in their lending requirements. Because the number of individuals with “perfect credit” is dropping every year, lending institutions are offering bad credit auto loans more often. Although a bad credit auto loan may not have the same interest rate as a good credit auto loan, it still provides individuals with less-than-perfect credit the opportunity to purchase the new car they need.
Second, by nature a car loan is a secured loan. What this means is that your car is deemed as collateral. Banks are far more willing to finance an auto loan because of this fact. Although they will never admit it, banks realize that a low credit score doesn’t always mean you won’t pay your bills. They also know that car loans are a great way to improve your credit score. Assuming you have a good payment history, banks will want to keep your business, offering you more loan opportunities in the future. carmax.com
Finally, the car business is an extremely competitive market. For new car franchises, it is often more important to sell a car than it is to make a huge profit on that car. A huge part of this is the fact that manufacturers pay dealers incentives based on the number of cars they sell, not the price the dealers sell the cars for. The more cars a dealership sells, the larger the incentives become. Financing cars becomes much easier in this scenario because dealers are often willing to sell cars at cost, and sometimes even below cost.
carmax.com can help you get financing despite your past credit problems. Our application process only takes a few minutes to complete and is designed to give you a chance to evaluate your best finance options.”