How to Finance a Car if You’re a College Student


If you’re fresh out of school and on your way to college than often times you don’t have any established credit. This can work against you when you’re buying a car but may also need one wherever you may be going. Most campuses are centrally located and everything you need is right there in and around your dorm room.

When you don’t have any established credit history it may be tough for you to get an auto loan. If you don’t have a job it can be next to impossible. You still have a few options though as you adjust to your new life on campus.

1. At 18 years old most people don’t even understand what credit history is. Most of our parents have never taught us anything and the school systems don’t either. There are two big purchases you’ll make over your life time. One of them is a house and the other is a car. You’ll most likely need to take out a loan if you want to buy either one of the two. The way they will loan you money is dependent on your credit score. Your credit score is determined by how timely you make your payments, how much money you have down, your job history and your current living situation. In other words, how well you manage your own finances determines how much companies will loan you and at what interest rate they will do so.

2. When you’re on your way to college you don’t have much time to establish credit history. If you haven’t done so one of your best options is to get your parents to co-sign for you. If your parents co-sign you can be responsible for the payments but they’ll be more likely to loan you out a newer vehicle for lower payments if your parents are on the loan. Most parents have established job history, credit score, proof of income and stable living situation. Also, they have a combined income which bodes well for when banks look at the loan and decide the interest rates they will give you.

3. There is a way you can both finance a car and give yourself a gigantic credit boost. There are special finance departments in some dealerships but they only take on certain loans. Your best shot at getting financed while also boosting your credit score fast is going to a buy here pay here dealership. Buy here pay here is a used car dealership that helps people get financed for a car if they have bad credit, no credit or ghost credit. Most of them have more relaxed lending options and they don’t use a one size fits all. They will often finance you even if you have no job history to speak of or if you don’t have any credit either. They will also finance you if you have bad credit such as missed payments, previous repo, a legal judgement or bankruptcy.

It’s important that when you go to a buy here pay here dealership that they report your payments. If they don’t report your payments don’t buy from them as it isn’t worth your time. Buy here pay here loans are short term so you’ll own the car much faster. In less than 3 years, before you graduate college, you’ll have established quite a bit of credit history. Your credit score will shoot thru the roof just in time for when you graduate. Not only will you have established credit once you graduate but also plenty of job opportunities.

Most college students don’t know this and it gives you a big head start when you’re about to start out your life, especially if you have student loans to pay off. If you have any questions on how buy here pay here works give us a call at 303-623-1926. We finance good people with bad credit and have been helping people in Lakewood, Denver, Aurora, Thornton, Northglenn, Longmont and Colorado Springs get an auto loan for almost 25 years.

Back to top