How to Purchase Two Cars With One Payment

Secure your financing before you visit the showroom.
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When buying two cars, you may want to avoid the inconvenience of dealing with two payments each month. However, the typical auto loan works for one car that it uses as collateral, so you'll need to seek alternative credit sources if you don't want to take out another auto loan. Some options include using personal loans, home equity loans or credit cards, as well as taking out two auto loans that you later consolidate. In any case, you'll need to meet the lender's requirements to qualify, so your income, credit score and existing debts need to allow for financing the cost of two cars.

Getting a Personal Loan

If you want a single payment for two cars, seeking a personal loan is the most common option. When you get this kind of loan, the bank provides the money for you to use as you wish as long as it's not for illegal activities, and the loan is usually unsecured, unlike with auto loans. Generally, you can find personal loan terms ranging from one to seven years depending on the bank, so you can have some control over the payment amount and interest paid over time.

As with car loans, interest rates and maximum loan amounts vary according to the bank, your income and your credit situation. Personal loan interest rates tend to be higher than for auto loans but less than for credit cards. The Motley Fool mentions that a common maximum personal loan limit is $100,000. You'll want to research banks since this limit can be less than half that at some institutions, and you'll want to check loan fees since they can get subtracted from the available funds.

You can apply for your personal loan through an online bank or brick-and-mortar lender. When applying, you'll need to consider the total cost of the two cars – including fees and any extras – to request enough loan funds for the purchases. Once they approve you, the bank usually deposits the funds in your bank account. You can purchase your two cars using cash, checks or electronic transfers and make a monthly payment as your lender requires.

Paying With a Credit Card

While it can be an expensive option due to the higher interest rates credit cards tend to have versus other loan options, you could possibly use a credit card to buy two cars and have just one payment to make. However, this requires having a credit card with a high limit and available credit to cover both purchases. Further, your dealer may have policies that limit the use of credit cards for vehicle purchases. This option often isn't available for car purchases from private parties either.

If you pursue this option, you may want to contact your credit card issuer beforehand to make sure they'd approve purchases that large. You'll also want to consider the interest due and find a way to pay off the vehicle purchases to avoid paying too much over time. Due to these issues, using a credit card is more common for vehicle down payments versus the whole purchase price.

Using a Home Equity Loan

If you've owned a property for some time and established significant equity, you could consider a home equity loan to finance two cars. You'll need to shop around for a lender since they vary on how much they let you borrow against your home's equity. Even if you paid off the mortgage, you usually can't borrow more than 95 percent of the current property value. But if available, you can benefit from a lower interest rate than personal loans and credit cards.

As with a personal loan, you'll need to go through an application process that considers your income and credit and may require additional verification. Your loaned funds can go to your bank account or come as a check that you can use for the car purchases, and you usually get 10 years to pay it back. You'll want to be sure to keep up your payments since your home would serve as the collateral with this option.

Buying Separately and Consolidating Later

Even if you do get separate auto loans, you could try to consolidate them later to get a manageable single payment. At the same time, a consolidation loan allows you to combine other debts like credit cards and personal loans so you can potentially get a better interest rate, improve your credit score or at least have an easier time keeping up on payments.

Consolidation loans are often personal loans with similar interest rates and payment terms. The lender will assess your finances, employment situation and existing debt to determine whether you qualify. If you do, they may send money to pay off your creditors for you, or you may need to send the payments yourself.

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