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Can I Get A Second Car Loan If I Already Have One?

Last modified: Sep 29, 2022

Can you finance two cars at once? Yes, you can have two car loans at the same time.

But how do you qualify? Your credit history, proof of income, and other key components will be important factors the lender considers when giving you more than one loan.  

So, Can I Get a Second Car Loan if I Already Have One? Buckle up and keep on reading!

Second Car Loan Requirements

The requirements for a second car loan are the same as for a first car loan, which include the following:   


The ability to cover the extra monthly payments is an essential requirement for a second car loan. Your debt-to-income ratio (DTI) will be calculated based on your credit score’s interest rate and repayment conditions.  

Lenders want to see that you can afford the loan before they approve it, and your DTI is a key metric in this determination. A high DTI means you’re taking on a lot of debt and may risk defaulting on your loan. 

Keeping your DTI low demonstrates that you can handle the extra payments without too much strain. The amount of auto loan debt accumulated by Americans is alarmingly high, crossing the $1.2 trillion mark in January 2020

Auto loans one and two, and any mortgage, personal loan, or credit card payments, will be included in your monthly debt service obligations. Both the interest rate and the term significantly influence how much you must pay each month. The DTI restrictions become less stringent as your credit score improves.


Interest Rate

Max DTI>

Super prime (750 +) 3.5% 55%
Prime (700 – 749) 7.5% 50%
Near prime (650 – 699) 12.0% 45%
Subprime (550 – 649) 17.5% 40%
Deep subprime (549 -) 24.0% 35%

The table above shows that if you want to get a car loan with a 650 credit score, the average interest rate you can expect to pay is 12%. On the other hand, if you have a credit score of 750 or more, the average interest rate you can expect to pay is only 3.5%.

Credit Score   

This is an important factor when you want to get a second car loan. A high credit score means you're a low-risk borrower, leading to a lower interest rate on your loan. A low credit score could mean you won't be approved for a loan or will end up with a high-interest rate.    

If you need to improve your credit score, there are a few things you can do. You can start by paying your bills on time, keeping your credit utilization low, and adding positive information to your credit report. You can also get a copy of your credit score and review it for errors.

If you follow these tips, you'll be on your way to getting a second car loan at the best interest rate possible.    

Payment History on Other Loans

This shows them how responsible you are with your money and whether or not you are likely to make your payments on time. If you have a good payment history, it will show the lender that you are reliable and likely to repay your loan. This will make them more likely to approve your application and give you a lower interest rate. In the US, the average monthly mortgage payment is about $1,030. 

However, if you have a bad payment history, it could mean that you are not trustworthy and may be at risk of defaulting on your loan. The lender may choose not to approve your application or may give you a higher interest rate.   

Can You Have Two Car Loans With Bad Credit?

When you have bad credit, it's still achievable to secure a second auto loan, but the chances are slim. If you qualify for the initial round of financing, your low FICO or Vantage score and poor payment history shouldn't be a barrier.    

What will hold you back is your capacity to fund a deposit while keeping your expected DTI below 35%. Furthermore, those with credit ratings near or below 550 should stay with one car rather than stretching themselves too thin by purchasing another.   

How Will Your Credit Score Be Impacted? 

A few things will be taken into consideration when looking at someone's credit score, including how much debt they have and how well they are managing their debt.

If someone is financing two cars at the same time, it will be looked at as a high-risk move. Having two car payments will add to someone's overall debt, and it will be more difficult to manage.   

Also, if someone with two car payments missed one payment on either car, it could have a negative impact on their credit score.     

How About Getting Two Cars Under One Auto Loan?

In theory, it’s doable to finance two vehicles with a single loan, but such an approach is so inconvenient that most drivers who wish to acquire multiple cars at once will choose not to use it. But the consequences of a car wreck can be nerve-wracking, especially when your car gets labeled “total loss,” and you desperately need a car. It all comes down to who owns the title at each stage and the consequences of default.    

Car lenders hold the title to each vehicle until you pay off the whole amount you owe. Two car repossessions at once might be catastrophic. Knowing this, having one loan for every car gives you greater financial flexibility and protection.  

Other types of loans allow you to take possession of the car titles right away. But these options have other limitations.  

Personal Loan

These loans are installment contracts that don't have anything the lender can take away if you don't pay. This means the lender takes a bigger risk when lending money, so you can expect to pay higher interest rates. It's also harder to borrow enough money to buy two cars with a personal loan.

Home Equity Loan

Home equity loans use the value of your real estate property as security—provided you are a homeowner, and the balance on the existing mortgage is low enough. However, if you cannot make your monthly payments on time, you may lose your home to foreclosure. And if you already have a lot of debt, taking on more could put you in over your head.

Bottom Line

So, can you have two auto loans? Yes, you can.

Just be sure that you can afford the payments on both loans and that you are not putting yourself in too much debt. If you’re thinking about taking out a second car loan, it’s essential to shop around for the best interest rates and terms.

And finally, make sure to read the fine print before signing any contracts.


How many car loans can you have at once?

You can have as many car loans as you want at once in the US, but it's not advisable. Multiple car loans mean that you're taking on more debt and are less likely to be able to pay each loan off on time. This could lead to penalties, higher interest rates, and a lower credit score.

Can I have three car loans at the same time?

You could certainly have three car loans at the same time, but that doesn't mean you should. You would likely find it challenging to keep up with the payments on all three loans, and you could wind up in a lot of financial trouble. In addition, because you already have two loans, it may be difficult to obtain approval for a third.

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