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How Old Do You Have to Be to Get a Car Loan?

In the United States you must be 18 years old to enter into a legally binding contract. Since a car loan is such a contract, you must be 18 in order to secure one.  Even if you have a co-signer, you can’t get a car loan in your name at 16 or 17 years of age, as you would still be regarded as a minor.  Once you do turn 18, you will still probably need a parent to co-sign the loan, as you will have minimal credit history.

Looking Ahead:  How to Improve Your Chances of Approval

Despite not being able to get a car loan without a guarantor, there are several things that you can do prior to your 18th birthday to improve your chances of getting approved when the time arrives.

  • You will need to have on a job for at least six months, preferably one year, prior to applying for an auto loan.
  • You should go to to get a copy of your credit report. Even if you have never applied for a line of credit in your life, someone else may have. After all, identity theft is on the rise for minors. You will need to clear up any problems before you apply for a loan. You will need the help of a parent/guardian if you need to dispute any errors.
  • You will need to be able to show a history of saving some of your money. Your chances of approval will increase if you apply for a loan at the institution where you have your savings account.
  • You should have twenty percent of the purchase price as a down payment. This is because you have no credit history and lenders want to see that you are vested in repaying the loan.

If you are denied an auto loan after you turn 18, consider a secured credit card. These cards will build your credit history and boost your score if used responsibly. Be sure to pay off any balance each month. A secured credit card is not the same as a pre-paid card. Pre-paid cards DO NOT appear on your credit report and WILL NOT boost your credit score.

Are you 18?  Ready to get approved?  Please consider applying online with us.  The application takes less than three minutes to complete, and we match you to the lender or dealer in our network who suits you best, taking into account such factors as your location, income, credit profile, and of course your age.

About the Author

The author has many years of experience in automotive finance and insurance. However, each consumer's situation is unique. It is best to contact a finance specialist for further assistance.
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