No Credit Check Auto Loans with Repo

by Mack Bartlett

Listen closely. It doesn’t exist. There’s no such thing as a no credit check auto loan, with our without a repossession on your record.

Of course, that doesn’t mean you can’t get financing. You’re operating under the assumption that because there’s a repo in your recent past a lender won’t touch you. That’s not the case, but that doesn’t mean they’re not going to check your credit before they give you a loan. Why is that? Because your credit goes beyond just your Fico score (which I’m sure is pretty awful, but don’t feel bad – that’s just about everybody these days). Prospective lenders are going to look at your credit history to get an idea of whether they should treat you as anything other than a really bad credit score.

They’re going to look at:

  • how much credit you’ve had in the past (both number of credit lines as well as total available credit on things like credit cards, etc)
  • how many late payments you’ve had on those credit lines (although typically they’ll only go back 24 months)
  • what your current outstanding balances are (including judgments, active credit lines, home loan, etc)

Make no mistake, if someone gives you an auto loan (even relatively small $5000 auto loans) after you’ve had a repo, they’re going to stick you with some ridiculous interest rate. I’m talking upwards of 20%. But that doesn’t mean they won’t give it to you at all. They likely will give it to you. But before they do, they’re going to look very closely at your provable income and your current monthly payments on other loans.

After all, whenever you had your repo, it wasn’t because you were flush with cash and just decided to stop making payments, was it? Probably not. Whether it was unemployment or some other emergency cash issue in your life, you didn’t have the money to stay current on your car payment. So the big tow truck came in the night and hauled it off to auction.

Here’s what your new lender will need to see:

  • most likely at least 30 days of pay stubs
  • a letter from your employer (on company letterhead) saying that not only are you still working there, you will continue to be employed by the company for the foreseeable future

Once you’ve proven the income, the lender will add your new payment to existing loan balances, calculate the total payments as a percentage of your gross and net income, and make a decision about whether you can handle the payment. If he feels like you’re likely to make your payments on time, he’ll give you the loan and courteously charge you 23% interest on it. And if you’re dumb enough to default again, he’ll repo your car, keep all the money you’ve already paid him, and sell the car to somebody else who’s on the hunt for no credit check auto loans after their repo.

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