Our News

We hear this question a lot, “how do I buy a car with bad credit?”  It can feel like a daunting task to purchase a car with poor or no credit.  According to Equifax, the average credit score in Missouri was 705 in 2024.  However, a large percentage of Americans can’t qualify for traditional credit on cars because of either not having a good enough score, or not having a score at all.  What options do you have if this applies to you?  Keep reading to find out!

Key Takeaways

• Bad or No credit individuals can purchase by cash, through a Buy Here Pay Here (not recommended), or using a program called Guaranteed Financing
• Guaranteed Financing is the preferred choice for low and no credit purchasers.
• Never Say No Auto specializes in Guaranteed Financing, but also offers traditional financing and cash options for those that qualify.

Photo by Gustavo Fring: https://www.pexels.com/photo/close-up-photo-of-a-thumbs-up-4895414/

How traditional loans work

For good credit individuals, traditional financing is a typical route taken from either a major dealership or bank/credit union.  Traditional credit loans on cars from dealerships follow market interest rates and can range from 4-8 years in duration.  These are the most common types of automotive loans on cars, and are typically what you see advertised on new car commercials.  The big catch? Experian says to qualify for these loans, you need at least a 661 credit score or above. That automatically disqualifies 25% of Americans who have credit scores between 300 and 649.

Options for Low or No Credit Individuals

If traditional loans aren’t an option, you still have several ways you can buy a car, including:

1. Cash,
2. Buy Here, Pay Here, or
3. Guaranteed Financing

Keep reading to see which option is the best for you!

Cash

Cash can be a great way to purchase a car.  Saving up and paying for a car outright can be both a badge of honor and a smart financial decision.  You don’t have to worry about repossessions, late fees, or an increase to your monthly budget, because there’s no payments!  Also, you stay within your designated budget for a car because you can’t buy what you don’t have.  

The big downside with paying cash is that it doesn’t improve your credit score.  Also, since the average used car price is $25,128, that can take quite a bit of time to save up.  Not everyone has the luxury of waiting a few years to purchase a car.

Buy Here, Pay Here

Purchasing a car from a Buy Here Pay Here (BHPH) can seem like a good choice.  You buy the car from the same place you make your payments, so you can familiarize yourself with the location and get to know the people that you’ll be dealing with.  

However, BHPHs usually have very high interest rates, which can extend the life of the loan beyond a traditional car loan.  These interest rates are included in the sale price of the vehicle, so you can’t refinance for a better rate or even benefit from paying off your car early.  Payments are usually made weekly for these vehicles, and cars can be repossessed if even a few payments are late or are behind. In addition, BHPHs don’t report payments to credit bureaus, so if you go with this option, you’ll likely be stuck at a BHPH forever…

Guaranteed Financing

A third option is a type of Guaranteed Financing program, like the one we have at Never Say No Auto.  These programs are offered by third party banks and are designed to work with people with low and no credit to help them purchase a car, follow through with the loan, and build credit along the way.  This can be the best option for a buyer who wants to improve their credit score while driving a great car.

Depending on the situation, these programs can carry some higher interest rates than traditional loans, but more often than not beat out BHPH rates by a large margin.  These programs most effectively function exactly the same as traditional lending.

Summary of Options for Low and No Credit

Cash

Pros

• No monthly payments
• No going over budget

Cons

• Doesn’t build your credit score
• Takes time to save

BHPH

Pros

• Buy car from same place you make payments

Cons

• Doesn’t build your credit score
• Very high interest rates

Guaranteed Financing

Pros

• Builds your credit score
• Designed for low credit/no credit situations
• Looks and feels exactly like a traditional loan

Cons

• Can have higher interest rates than traditional credit loans

The Winner for Low and No Credit Customers? Guaranteed Financing

To take advantage of immediate purchasing power along with being able to build credit to not stay in a less-than-ideal situation, a Guaranteed Financing program is the perfect solution.  With its ability to offer reasonable interest rates, the ability to refinance, and this type of credit gives you the look and feel of a traditional loan, without needing the credit to qualify for it.

At Never Say No Auto, Guaranteed Financing is our specialty.  We offer Guaranteed Financing on all of our retail inventory, giving our customers power in purchasing, regardless of credit history.  We also have great relationships with banks for traditional financing, as well as the option to let customers purchase the car of their dreams with cash.  This means more ways for you to have a reliable car—regardless of credit circumstance.

Curious to see what you can qualify for?  Apply for financing at either of our locations today! 

Want to pay a different way?  Browse our inventory to find your next vehicle.