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The First-Time Car Buyer Program: Everything You Need To Know

Last updated 03/14/2024 by

Benjamin Locke

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Both lenders and car manufacturers offer first-time car buyer programs to help people with little or no credit history obtain auto loans. First-time car buyer programs will generally make you put some sort of down payment on your car and could charge you interest exceeding that charged for a standard auto loan. Although first-time car buyer programs are geared toward people with minimal credit, you may need to show full employment, provide a cosigner, or do both to qualify for one.
Unless you live in a major city with great public transit like New York, then a car is probably vital to your ordinary life. Cars and automobiles are so standard in American life that only 8.3% of households do not own a vehicle. You need a car to see your family, travel to work, pick up your kids from school, or drive around aimlessly as a form of transcendental meditation. Those with poor credit history who need to get back on the car ladder, or those with no credit looking to get their first car, should consider first-time car buyer programs for their car loan.

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What is a first-time car buyer program?

A first-time car buyer program is an auto loan program offered by either lenders or car manufacturers. It enables people to obtain car loans who may have bad credit or no credit at all. Although first-time car programs are easy to qualify for, loan approval could be denied. Thus, it’s best to have an idea of what the guidelines are before applying.

How the first-time car buyer program works

In every loan situation, there is a lender and a borrower. It’s the same with the first-time car buyer program; however, the lenders could be different.

Key program providers

First-time car buyer programs are offered by two sorts of entities:
  • Lenders
  • Manufacturers
Here’s a breakdown of the programs offered by various lenders and manufacturers:
Program type: institutionProgram source: entity type
Credit UnionLender
Let’s take a closer look at some of the lenders and manufacturers that offer first-time car buyer programs.


There are a multitude of different lenders that have special programs for first-time car buyers. Among these are banks, credit unions, and alternative lenders.


Some large banks will have a first-time car buyer program, just as they provide traditional auto loans. Chase, for instance, has a special first-time car buyer program that gives approval in 2–3 hours, but the car must be from a dealership in the Chase network. Many times, loans from banks will be the most difficult to get officially approved, in contrast to credit unions or alternative lenders.

Credit unions

Various credit unions around the United States offer first-time car buyer programs, such as University Credit Union, Members Choice Credit Union, and First U.S. Community Credit Union. There are numerous state and local credit unions, such as Houston Federal Credit Union and Arizona Financial Credit Union, that offer some version of a first-time home buyer program.

Alternative lenders

Alternative lenders, or lenders that are outside of the traditional lending system, also offer different first-time car buyer programs. These first-time car-buying programs from alternative lenders can come from a variety of places. Carvana, the online used car dealership, offers a first-time buyer program loan, and so do auto-loan-specific alternative lenders, such as AutoPay and myAutoloan.


Auto manufacturers offer first-time car buyer programs because it helps them in two ways.
Firstly, by making their cars more accessible, they boost their sales and, ideally, boost their bottom line, which leads to a good report for shareholders. Secondly, people are often quite loyal to car brands and, thus, a first-time buyer program could make someone a customer for life. Some of the more popular first-time car buyer programs through manufacturers are:


The Ford First Time Car Buyer Program offers a low down payment (usually $500), but the borrower must be able to prove an income of at least $2,000. They also offer decreased monthly payments, as well as an option for people with no credit history at all.


Toyota has a first-time car buyer (FTCB) program where you are not allowed to have no credit history, but where a minimal credit history will do. You will need three references to qualify, a FICO score of 610, and a high enough income to cover basic living expenses and vehicle payments. Robert Lutzero, an automotive engineer and founder of, thinks Toyota’s Corolla is the way to go with their FTCB.

Things to consider regarding first-time car buyer programs

Let’s review several factors you should take into account when looking into available first-time car buyer programs.

Credit score

If you have a credit score lower than 699, then expect to pay higher interest rates than you would if your credit score were above this level.

Credit history

Credit history is complicated when it comes to first-time car buyer programs. This is because you will need to show a credit history of fewer than 12 months to qualify as “first time.” In addition, whereas some lenders will want to see at least some credit history, others will offer loans with no credit history at all.

Loan term and loan value

The standard auto loan consists of a monthly payment lasting 84 months, but this could be shorter under the FTCB. There might also be limits on the amount you can borrow, regardless of the car. For instance, the Toyota loan program lets you finance a max of up to $25,000, regardless of the car’s down payment and value.

Down payment

Most first-time car buyer programs will require that you make a certain amount of down payment. This can be 10%, 20%, or as little as $500, as offered by Ford’s FTCB program. You should make your down payment large enough to ensure you will be financially comfortable making your monthly loan payments. Getting together the down payment for your purchase using a first-time buyer program might take some effort, but the more you put down, the easier your life will be going forward.


Almost all FTCB programs will require that the borrower be employed. As this is “the first time,” lenders or manufacturers assume that the applicant will not have a rich employment history. Sometimes, an employment history of as few as three months will suffice, but you will need a certain amount of monthly income.


Having a cosigner is not a requirement for an FTCB program, but it can lock in low interest rates and a better deal. A cosigner could be a parent, friend, or random person you met on the side of the road holding a sign explaining that his FICO score is 800.

What else to consider for the first time buying a car?

So you know you need a car, and you know you will be a shoo-in for the FTCB program. What else must you consider?

Pro tip: don’t scrimp on insurance

Insurance is a must to legally drive almost anywhere in the United States. (Proof that you can afford to be self-insured suffices in one state. And paying for a “surety bond” can substitute for insurance in a small number of states.) However, it’s crucial you don’t cut corners on the insurance provider, according to Jared Staver, a founding attorney of Staver Accident Injury Lawyers.
Due to FTCB programs being geared toward people with low income, it might be tempting to skip out or scrimp on insurance. Don’t do it! It is better to not have a car than to drive around without insurance — at least according to Jared Staver, founding attorney of Staver Accident Injury Lawyers, P.C.:

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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Type of car

So, which is the best, most reliable car to buy for the first time? It really depends on whom you ask. Michael J. Mallis, an attorney and partner at Kisling, Nestico & Redick, LLC, thinks that, regardless of the brand, research is key.
Talha Atta of, in contrast, thinks it’s all Nissan Nissan Nissan.
For most of us, the type of car we buy and the car-buying process are reflections of our personality. However, for first-time car buyers, other considerations also need to be taken into account.


What credit score is needed for a first-time car buyer?

There is no credit score required for an automotive-secured loan like the FTCB program. However, FICO scores of 699 and lower will incur higher interest rates and a higher down payment, and could possibly cause your loan to be denied without amazing employment or a cosigner.

What credit score do I need to buy a $20,000 car?

$20,000 is at the lower end of expense when it comes to cars, so there are many loan options for people wanting this type of car. There is no definite credit score needed, but those with fair credit or poor credit might need to pay more in interest and make a larger down payment.

Does financing a car build credit?

Yes, car financing builds credit, just like when you take out any type of loan and pay it back on time. The key is to never miss a car payment and have some extra emergency funds saved up in case you run into an emergency or lose your job. You might even be able to get a much better APR (annual percentage rate) on your interest rate when you make your next car purchase.

Key takeaways

  • First-time car buyer programs are offered by both lenders and car manufacturers to help people with little or no credit history obtain auto loans.
  • Lenders that offer first-time car buyer programs can be credit unions, banks, or alternative lenders. Large manufacturers, such as Toyota and Ford, also offer first-time car buyer programs.
  • Credit history and credit score will all be taken into account and determine your loan terms. You are not guaranteed approval, especially if you are employed and might need a cosigner
  • When looking at buying your first car, don’t skimp on the insurance, and don’t go too crazy with your car choice. Choose something reliable.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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