Millions of people buy cars every year, but not all of them have excellent credit. In fact, that may be the exception and not the norm. It is possible to buy a car with bad credit, and there are steps you can take to ensure you get the financing and the car you want.

For starters, you should understand that 80% of new car purchases, and about 38% of used car deals, involved financing in 2023, according to Time. That means lenders have the ability to finance buyers with all types of credit.

If you are willing to do some homework, there’s a very good chance that you can buy a car, even if you have bad credit or no credit. Here are some things you can do to get started.

Check Your Credit and Credit Report

When you apply for financing to buy a car, auto lenders and finance companies will review your credit history as part of the approval process (and to determine your interest rate, in some cases). Knowing your credit scores before you shop can help you deal with them.

Your credit report is a document containing personal information pertinent to your credit, your credit account history, credit inquiries and information gathered from public records, which may include bankruptcies and open or closed accounts. All of this is also distilled into a numeric score.

You can access your credit report for free once every 12 months through the three major credit bureaus, Equifax, Experian, and TransUnion, and see your credit scores for free using services such as Credit Karma.

Get Prequalified for Financing

Getting prequalified for financing tells you exactly how much you can borrow, and you can do it before you start shopping for cars. This allows you to negotiate with confidence when you visit a dealership. To get your financing in place quickly, pre-qualify online with Credit Acceptance. It’s a simple process that provides you with a great deal of information.

Reduce the Amount You Need to Borrow

The less money you have to borrow, the easier it will be to buy your car. One way to do this is to make a down payment, which is often required anyway. The higher the down payment provided at time of purchase, the lower the monthly payments are. In addition, the more money put up front, the lower you’ll pay in interest.

Another way to reduce the amount you borrow is to trade in your current vehicle. Existing vehicles can be traded in to the dealer, and the value can be reduced from the price of the newer vehicle. If you still owe money on the trade-in, in some cases you can carry over that negative equity into the cost of the newer vehicle.

Consider a Co-Signer

Having a friend or family member co-sign your financing can help you with your purchase. A co-signer is someone who is also responsible for the line of credit or financing plan, making it less risky for the financing company to underwrite. A co-signer should be a trusted individual.

Do your research

Once you have a better idea of your credit history and car financing options, you should research cars that best fit your needs and how much you may be able to spend. You can start by determining which brand and model is most suitable, and then decide whether to buy new or used. When you have these answers, you can shop around.

Part of that shopping involves finding a dealership that serves people with bad credit or no credit. Credit Acceptance works with more than 15,000 car dealers nationwide that help people with credit challenges get approved for financing. To work with a dealership in our network, first get pre-qualified online and we can connect you with dealerships in your area.