Can I Get Financed for a Second Car Loan?

by Anita
(Greensboro, NC, Guilford)

Question: Can I get financed for a second car loan? After this year I have one more year to pay off my car. Can I finance another car due to the fact that I need a larger car for my daycare business? I do not want to trade in my car I have now. I just want to know can I finance another car?

Answer: Hi Anita,

Yes, it is possible to get financed for a second car loan, but there are a few things that can make this process a bit tougher than just getting one car loan.

Lenders take on more risk loaning on a second vehicle and the way that they look at it it is much easier for a customer to walk away from one of the loans, because the customer has another vehicle to drive if they give one back to the bank.

The lenders will look much closer at your overall credit, which typically needs to be above average in order to get a decent rate on a second loan.

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They will also look closely at your overall Payment to Income (PTI) and Debt to Income (DTI) ratios. Basically they want to be sure you can easily afford your other obligations plus both your car payments.

One good thing here is that your current car loan is nearly paid off. Most lenders will view an existing auto loan that has between 4-6 payments remaining (varies by lender) as paid off. So they may not even factor your current vehicle when deciding on giving you the second loan.

Depending on your overall credit I would think that a credit union would probably be your best bet as they tend to be more lenient in situations like yours.

They will also tend to listen to your situation more than a traditional lender will. Plus, they will more than likely be more flexible seeing as you are self employed. I wouldn't tell them that the vehicle will be for business purposes however. Don't lie, but just don't volunteer the information.

Take a look at Money Aisle's Lenders. They work with a couple hundred lenders nationwide and many of them are credit unions.

You will want to know your credit score in order to accurately get rate quotes, but you won't have to apply to check rates.

Good luck getting your second car loan and please don't hesitate to get back to me if you have additional questions.

Take care,

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