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Can Companies Really Offer 100% Approval for Car Loans?

Posted by Auto Loan Solutions

You’ve probably seen the advertisements multiple times for car companies which promise no matter how bad your credit is, or even if you don’t have any credit, you can get approved for one of their car loans.

Just how legitimate is such a claim?

Being suspicious of such a situation is justified, even if you feel you’re in a bad position and might be desperate to get a car. Not understanding what these offers are really all about can put you in a tight spot or get your hopes up only for them to be dashed.

Loans for Cars

Getting car loans can be an incredibly nerve-racking experience. After all, you must expose all kinds of information to strangers, things that you might not like to think about too much.

If you think you’re the only one with less-than-perfect credit, think again. Plenty of people looking to get cars loans and other forms of financing feel anxiety because of past problems. Even if you’ve done everything to fix the situation, that record lives on for years later, essentially haunting you.

Getting approved for a loan with credit problems can induce anxiety.

This is what makes advertisements for 100% approval rating on car loans so effective. With a good portion of people who want to get a vehicle wondering if they’ll even be approved for financing, such an option can seem like possibly a good option.

It’s also normal to be skeptical about this kind of an option, since it might be a little too good to be true. Instead of just wondering, it’s time to find out for sure what the deal is with car loans where supposedly everyone will be approved.

The Promise

As you shop for car loans, you no doubt have come across dealerships or lenders who proudly declare that nobody is turned down. This can seem like a compelling option, especially if you’ve applied for credit elsewhere and have been denied.

It’s absolutely no fun going through the process of getting car loans. You must dig out key financial information, fill out long forms, and maybe even have uncomfortable discussions about past debts and mistakes you’ve made. The fact you’re dealing with strangers who don’t really know you but are actively judging how responsible you are makes everything that much more unpleasant.

If you know you have bad credit, or just think you do for whatever set of reasons, hearing that certain car companies offer 100% approval for car loans helps alleviate some of your anxiety. You don’t need to deal with a tiring, thorough loan application, only to have it denied.

That kind of a sure shot is hard to turn down, especially when you feel desperate.


You’ve probably also heard that each time you apply for a loan, the company will pull your credit, and that can actually hurt your chances of getting car loans in the near future.

These inquiries made by potential lenders can have a negative impact on your credit file. But, having your credit pulled by dealerships or lenders a few times as you shop for car loans and a car isn’t unusual. Lenders who dangle this promise of everyone getting approved through them will use this fear of credit inquiries as bait to get you to just apply with them and nobody else.

If you don’t shop around for the best terms and conditions on car loans, you can easily end up with a bad situation. Instead of giving into the panic, learn what these car companies that offer 100 percent approval for loans are really doing and why. It’s the best way to protect you so you’re not dealing with an unworkable or miserable situation later.

The Reality

Just to be clear, there’s really no way any company can approve everyone for car loans. Some people simply aren’t in a position where any lender will take a chance on extending thousands of dollars in credit for them to secure such a large asset.

Not everyone really qualifies for car loans.

It’s just impossible to finance anyone who wants to buy a car. While many people who think they can’t get approved for car loans in reality can, there are situations where even subprime lenders aren’t able to help someone. That’s just reality.

The Strategy

So why do these companies make the promise that everyone will be approved for car loans?

The answer is this is a strategy to draw in business. It’s a false promise designed for a very specific purpose.

Well, this kind of strategy really captures the attention of anyone feeling desperate. Whether or not you’ve actually had trouble getting approved for a car loan, or you just think you will, that desperation can cause you to consider doing things you otherwise wouldn’t ever entertain.

These kinds of ads are a type of cattle call. They can generate plenty of leads for the company, and that’s exactly what they’re looking to do.

Once you feel that desperation and then see a ray of hope, these companies now they have the upper hand. You’ll agree to things that absolutely aren’t a good deal because you’re simply not thinking clearly. This is an easy trap to fall into, and the company selling you this promise knows it.

The Deal

Once you respond to one of these advertisements where supposedly everyone will get approved, the company will start to figure out if you’re really a candidate for one of the car loans. Yes, that’s right, they know there will be people who contact them that they can’t help, despite making the promise that they will.

After you’ve been sorted out from people who have no chance of getting a loan, you will be offered a deal which isn’t very good at all. The company will try to spin things to make it seem like for your situation, you’re lucky to be approved for any car loans, let alone one like what they’re talking about.

If your credit is in really bad shape, the company might require you to go along with all kinds of conditions you might not like, but still agreed to follow. This could include a huge down payment, an interest rate which is far higher than you might even believe possible, big monthly payments on your car loan, or an extremely short term for the loan, like one or two years. The deal might even include multiple items from that list or all of them.

There are some companies that will approve anyone who has a job and a checking account. You’ll need to provide proof of those two items. Any negative items on your credit history aren’t considered, but instead the lenders just look at your current situation. Still, there’s a catch, just like with companies which are trying to weed out the bad credit risks in more traditional ways.

Just because you get the keys to a car doesn’t mean your troubles are over.

The bad news doesn’t stop there. In addition, the company might require that you take a car which doesn’t work for your needs. It might be too small, be extremely old, have obvious mechanical problems, or otherwise not suit you. You’ll be told that the car is just a temporary situation, something you can drive for a while and then sell later, once you’ve built some positive credit. From there, you supposedly can get approved for normal car loans and get something you really want to drive.

Objecting to any part of what the company will try to portray as a generous offer for car loans will lead to your application for credit being denied. Sent on your way, you’ll feel even more hopeless and filled with anxiety before, even though you just dodged a huge financial mess.

Pushing You Away

Instead of outright rejecting you for any car loans, one of these places which advertises it approves everyone will actually offer you a deal. But the loan terms are so bad nobody in their right mind would take them.

This is a strategy for the company to not look guilty of false advertising, while essentially pushing away bad credit risks. You might be offered something like a loan where you must put down $8,000 cash up front, plus pay $900 a month for two years.

Of course, there’s no way you can fulfill that kind of an agreement. While technically you haven’t been denied credit, it was offered with such ridiculous terms that essentially you were.

The Outcome

Getting into one of these situations for car loans can be financially disastrous.

Saddled with a bad loan and a car which doesn’t work, you’ll feel trapped. Many can’t keep up with the financial commitment and the company repossesses the car, plus puts a negative mark on the borrowers’ credit file. The more recent any negative history on your credit is, the more damage it does.

If the car suffers serious mechanical problems while you’re still paying on the loan, your finances could be stretched so thin you can’t afford to fix it. In that situation, you’re left with the decision to keep making the high payments on the loan or have a car you can actually use.

That’s not the end of the possible bad news. Often, you’re forced into paying too much for an undesirable car, with the promise you can sell it and get something you really want afterward. If you are able to fulfill the entire loan terms, actually selling the car you’ve been driving and getting a decent amount for it could be difficult. That means when you try getting any new car loans, you’ll need to save up money for a good down payment, because it won’t come from any equity in your current ride. In the meantime, you might be dealing with a vehicle which is falling apart, almost literally. Those repairs could quickly add up, worsening your financial burden.

This all sounds like a horrible situation, and it certainly can be. But you don’t have to surrender to these bad deals on car loans.

Improve Your Chances

Before you really think about looking at car loans, it’s best to know exactly what your situation is like at this moment. Armed with that knowledge, you have a better chance of getting into a manageable and reasonable arrangement, instead of something that will become overwhelming.


First off, you need to know just how much you can afford to pay for a car. That means drawing up a realistic budget.

Start by understanding exactly how much you make. The next step is to list out regular bills you pay every month like utilities, housing, other debts, etc. Calculate how much you spend on necessities like groceries, medical visits, household items, etc.

Your budget should include spending for fun activities. If you lie to yourself about how you go to the movies often, eat at restaurants three times a week, or whatever else, your budget won’t be realistic. This can lead to you easily getting into a car loan you cannot maintain.


You need to also know what your credit situation is like. There are two national credit bureaus in Canada: TransUnion Canada and Equifax Canada. Through the mail you can ask for a free copy of your credit file or visit the bureaus’ websites and make the request that way. To verity it’s you, you’ll need to send documentation as required by the bureaus.

Once you know what your credit report is like, you have a better idea of where you stand. If you find errors in the report, you can dispute them, which will help your chances of getting car loans.

Negotiating Terms

When trying to get car loans through any company, don’t be afraid to negotiate. Car dealerships are used to people pushing back against certain terms they offer, including the car’s price, interest rate on the loan, etc.

Feeling desperate can lead you to agree with just about anything offered. Knowing your credit situation can give you the confidence to try for the best deal possible.

When companies offer 100 percent approval for car loans, there’s always something interesting going on. Proceeding with caution is always a good idea. Even better, learn all you can about your financial and credit situation before you try to get a loan, so you know just what you have to work with.

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