In the US, you can buy a car at the ripe ages of 16 and 17. However, you need to wait till you’re 18 to be able to finance that car. This is because you can only take loans when you turn legal in the US.

Car Loan at 18

However, there are several problems associated with getting a car loan at 18. Let’s take a look at some of these problems before moving forward to their solutions.

Why Is It Difficult to Finance a Car at 18?

Several requirements need to be met before you can get a car loan at 18. Since an 18-year-old will have next to no credit and no experience with banking and financing, their position might seem vulnerable to lenders and banks.

You will need to meet a few requirements to be eligible for a car loan at 18.

1. Credit Score

At 18 years old, you will very likely not have a credit history. This can become a problem for you as lenders consider your credit history and score before offering you a loan. It is expensive to get a car loan at 18 with no credit history; sometimes, lenders might even refuse to give you a loan. You will also need to take loans to build up your credit, so the problem persists.

2. Stream of Income

All lenders assess your financial situation to determine how great of a risk you are to them. Someone with a good credit score and high income is less of a threat than an 18-year-old who is just starting with no credit and a poor job. Lenders want to see a steady income, at least somewhere near $2000, to grant you a good car loan. They might also require your work history details.

Getting a Car Loan at 18

Now that we’ve gone over the initial requirements of a car loan for an 18-year-old, let’s talk about how you can finance a car at 18. There are several ways to go about it.

1. Get a cosigner

One of the easiest ways to become eligible for a car loan at 18 and with no credit is getting a cosigner. A cosigner agrees to pay your dues in case you have trouble paying them. They don’t have to pay for you, but it relieves the lenders, and you become a lesser risk for investment. Thus, you can quickly get a car loan approved at 18 and good credit.

2. Pay a large down payment.

When you try to get a car loan, you have to pay some amount as a down payment on your car. However, at 18 with no credit, you might want to put down a more significant sum as a down payment for the lender to see you as less of a threat. Let’s say, if you manage to put down even 20% of the car’s price as a down payment, your chances of getting a car loan approved will increase significantly.

3. Budget your loan

Budgeting is crucial in all financial situations. Whether you have a good credit score or not, steady income, and great interest rates, you will still have to budget your payments to avoid any delays or mishaps. You might want to figure out your estimated monthly payment in case you get a loan. You can do this by using an online monthly payment calculator, giving you a loose idea of your payments.

Once you have a number, you can try saving up or budgeting to ensure that you can easily pay the monthly payments without any delays.

Other Costs To Consider While Getting a Car Loan at 18

There are several other costs along with your car’s market price that you need to consider while getting a car loan at 18. These are all payments that you will have to take care of; therefore, getting a car loan to cover them will be the smartest thing.

● Car insurance
● Fuel expenses
● Major and minor repairs
● Maintenance
● Insurance deductible


When you’re starting at 18, financing a car can be a tedious task. You should not shy away from asking for help or considering other car financing options such as BHPH dealerships or asking your parents for a loan.