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Can you have two car loans at once?

I am currently financing one vehicle and use it to commute to and from work every day. I’ve been thinking about purchasing a second vehicle just for enjoyment. Can I get a second car loan before the first is paid off?

avatar
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Yes, you can legally have two
car loans
 at once—but it could be challenging to get approved for a second loan. 
A lender’s decision to approve you for a car loan is heavily influenced by:
If you already have one car financed, then your DTI is probably higher than 43%. This means that a second loan could make you over-leveraged and lenders are unlikely to approve your application.
Before you apply: Figure out your chances of success by calculating what your new debt-to-income ratio would be. Divide your monthly debt obligations (bills, rent, credit cards, other loans and debts) by your monthly pre-tax income. 
If you get approved:
Add the new car to your auto insurance policy
 and purchase
comprehensive
 and
collision
 coverage, which is always required by lenders on financed vehicles. 
MORE:
6 ways to save money when you buy a car
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