Thinking about getting a car loan? You’ve probably heard a few things that made you stop and reconsider. Maybe someone told you it’s impossible without perfect credit. Or that getting a loan through a dealer means you’re being ripped off. These kinds of claims get repeated a lot, but most of them are either exaggerated or completely false.
Car loans are not as complicated as some people make them sound, but the myths around them can definitely make things confusing. Let’s clear a few things up.
Myth 1: You need a perfect credit score
This is probably the most common one of all. People assume that if your credit score isn’t spotless, you’ll automatically be rejected. That’s simply not the case.
Lenders understand that most people don’t have a perfect financial history. A missed payment here or there, or a bit of credit card debt, doesn’t necessarily stop you from qualifying. In fact, many lenders focus more on your current ability to repay the loan than on what happened a few years ago.
It’s true that a better score may get you a better interest rate. But having less-than-perfect credit doesn’t mean the door is closed. You just might need to be more flexible with terms or shop around a bit more.
Myth 2: You must have a long job history
One of the most common questions people ask is: Can I get a car loan with a new job? The good news is that starting a new job doesn’t automatically rule you out. Lenders look at more than just how long you’ve been in your current role. If you have a stable employment background, consistent income, and the ability to repay the loan, that’s often enough. A few recent payslips, a signed contract, or bank statements can usually support your case.
So, while being in a job for several years might help, it’s definitely not a requirement. What matters more is whether your current income supports the loan amount you’re applying for.
Myth 3: All car finance is the same
This is another one that leads people to make decisions without understanding the options.
There are several types of car finance, and they work differently. Some allow you to own the car outright from the start, while others are structured more like a lease. You may get the choice to buy at the end, or return the vehicle and move on.
Not knowing the difference can cost you. For instance, signing up for something that looks cheap upfront might lead to expensive penalties later. Or you might find out too late that you don’t actually own the car at the end of the agreement.
It’s always worth taking the time to compare and understand the structure of what you’re signing.
Myth 4: You can’t pay off a car loan early
A lot of people think once you’ve signed up for a car loan, you’re stuck with it for the full term. That’s not usually the case.
Many lenders actually allow early repayments, either partially or in full. Some might charge a small fee, but others don’t charge anything at all. It depends on the agreement.
If your income improves or you come into some extra money, being able to pay off your loan early can save you interest and shorten your repayment timeline. You just need to check the terms upfront, so you’re not caught off guard.
So no, you don’t have to ride it out to the final payment. Flexibility is more common than most people realise.
Myth 5: It’s cheaper to buy outright
Paying cash feels good because it’s simple and quick. No debt, no paperwork, no ongoing payments. But that doesn’t always mean it’s the most cost-effective choice.
If paying in full empties your savings or leaves you with no emergency fund, that can put you in a worse position long-term. Plus, car loans allow you to spread out the cost, and in some cases, the interest you pay is very low compared to the benefit of keeping your cash on hand.
You’re not always better off by avoiding finance. Sometimes, keeping your money working elsewhere while you pay off the car gradually makes more sense.
Myth 6: Pre-approval means you’re locked in
Getting pre-approved is useful. It gives you an idea of how much you can borrow and what rate you might expect. But it’s not a commitment. You’re not locked in.
If you change your mind or find a better deal elsewhere, you’re free to walk away. Pre-approval simply helps you negotiate and avoid surprises. It’s a smart step, not a trap.
In fact, it can be a helpful tool when dealing with dealerships. You’ll know your upper limit and avoid being upsold into something you can’t really afford.
Don’t Let Bad Advice Drive the Decision
Car loans aren’t scary or mysterious. But the myths around them can make people feel like it’s a risky or hopeless process. That’s why it’s so important to ignore the noise and focus on facts.
If you’ve been hesitating because of something you heard second-hand, check if it’s actually true. Speak to a qualified advisor, do your own research, and remember that many people are approved for car loans every day, even with less-than-perfect circumstances.