Short Answer: You can get a car loan with a repossession on your record, but you generally must wait until at least a year has passed after repossession. Below, we detail how to get a car loan after a repossession, along with a list of lenders that accept loan applications if you have a repossession on your record.
How to Get a Car Loan After a Repossession
A vehicle repossession will generally stay on your credit record for up to seven years. Since almost all car lenders check your credit report, the repossession will affect your ability to get a car loan, but it is still possible to get a car loan after a repossession.
Whether you seek a car loan from a bank or non-bank lender that works with applicants with poor credit, it is generally most difficult to obtain an auto loan if your repossession occurred within the past year. It’s best to wait at least one year after repossession to be able to successfully apply for another auto loan, according to loan referral services CarsDirect and Auto Credit Express.
In the course of our research, we found that it is generally easier to obtain a car loan from a non-bank lender that specializes in assisting applicants with poor credit. Note that it is challenging to get a car loan if you have multiple auto repossessions on your record unless your repossession was included in a bankruptcy.
Credit Score & Other Requirements
All of the banks and non-bank lenders we contacted said that applicants with poor credit, including those with repossessions on their records, can apply for car loans. Note that “poor” credit is considered to be a credit score of around 600 or below.
Lenders consider several different factors in determining whether to approve an auto loan, including the applicant’s credit history. If you are approved for a car loan with a repossession on your record, lenders may require you to have a co-signer or put down a cash deposit. They may also charge you a higher interest rate.
Lenders That Offer Auto Loans After Repossession
Below, we provide a list of lenders that accept auto loan applications from borrowers with a prior repossession. Note that there is no guarantee that these lenders will approve your car loan. We confirmed the information below by calling corporate customer service representatives for each of these companies.
Banks and Credit Unions
- Policy: Considers over 200 factors when processing auto loan applications, so you may receive a loan offer even with a past repossession
Navy Federal Credit Union
- Policy: The bank’s decision is based on the applicant’s entire loan application, including the credit record.
- Policy: Offers direct auto lending as well as indirect lending through partnerships with several dealerships
Auto Credit Express
- Policy: Referral service; matches you with special finance lenders at dealerships and specializes in working with people with poor credit
- Policy: Referral service that partners with auto dealers; customers with poor credit who use CarsDirect rather than going directly to the auto dealer have a higher possibility of being approved, customer service representatives told us.
- Policy: Direct lender; works with borrowers with all types of credit
Note: See our previous research for more information on the Carvana buying process.
- Policy: Direct lender; accepts applications from borrowers with poor credit or no credit history
For more on obtaining an auto loan, see our research explaining the credit tiers for auto loans.