Can my 20 yr old son buy a car without me as a co-signer?

Question

He has worked at Walmart for a year and has a down payment. He drives a junk truck to work every day and needs to buy a car soon. I can co sign, but would rather he do the purchasing on his own. He has no credit history.

Answer 1

As with the others, it'll be a challenge. How much does he have to put down? 20% down is a good start, but with no credit history, he's what the creditor's call a "credit ghost."

Many times it's harder to get a loan with no credit, than it is with a poor credit history.

My parents wouldn't cosign for me until I was almost finished with college....

18 months with a cosigner, and perfect payment history, you are considered "safe" by the creditors as a rule.

You can try to have him apply for a loan at any dealership, and see what happens. I know in Maryland, once you run a credit check, you have (30 or 60 days) to shop. It won't keep dinging your credit.

New cars are easier to get loans for than used, because they have more equity.

Creditors look at debt-to-income ratio and payment history mostly....he's probably going to be lacking in both. But, the size of his down payment will help the most.

By you signing, you'll help his credit. BUT, you also need to have good credit for him to qualify, AND you must be willing to take on that risk. If he defaults, you're responsible.

Good Luck!!!

Also...from my experience...credit cards alone didn't help customers qualify for car loans that much...Student Loans, Mortgages, larger personal loans, or unfortunately, a cosigner did...

Answer 2

Since he has no credit history, he should probably open up a credit card account a few months prior to applying for a car loan. He could purchase a couple of inexpensive things during those couple of months and pay the balance off right away each time. That way the auto creditor will see a history of positive credit. With a good credit history, it's more likely that he'll not only obtain a car loan without a co-signer, but he should get a better interest rate as well.

Good luck.

Answer 3

I do not know what area you are from but in our area which is St.Catharines Ontario Canada there are a few small lots that do in house leasing on cars that are about 2 years old and up .However we also have Henley honda that has really good used cars some only 6 months old and also new Hondas .They do an in hous eapproval that is like a lease with a 2 payment buyout at the end .You can also pay off early to either get into a newer car at their lot or to just pay off .To get into a newer car you take the car back pay 2 payments and get something newer . To just pay off you make 3 payments and the buyout .They also count towards your credit rating . Most areas will have 1 or more edealers that offer this you just have to look around at the dealers . Most of the easy approval places advertise and all they really care about is if you are employed now . It takes some leg work but after that you are driving .

Answer 4

He would need a co-signer unless he worked with a bank that knew him very well. I suggest he buy a car that he can pay cash for, even if it is a $1,000 car. You can buy very depedable transportation (it may not be pretty) for not a lot of money. If he can't afford to pay cash can he really afford a payment? If you co-sign you would just be setting him up for future troubles. Really, if he could find a 1996 something or other with 50,000 to 70,000 miles he would be much better off. Could he get a second job delivering pizzas or something until he saved enough for a newer car? Remember...the borrower is slave to the lender!

Answer 5

He's going to need to establish a credit history before any one gives him a loan ! Tell him to get a credit card from his bank and use it for one year ! This will establish a solid credit history and then he can get a loan with out a co-signer !

Answer 6

With no type of installment history, he won't qualify for the best rates. Also, how much does he make at W-mart? That is going to be a factor as well. Believe it or not, car loans are harder to get than anything else. People have even qualified for houses before they have good rates on a car. So...he'll be paying a higher rate, or not getting a car. Also..interest rates on new cars are lower.

Answer 7

yes he can only problem they will probally want 30% down payment on a new car , if he buys a used car probally the same i would recommend that he buys a car off the street or look in the paper , he should try to open a retail credit card and juyst spend the minimum on it to build up his credit, any dealer will need a co signer if the dep. is too low

Answer 8

It would probably be hard for him to get someone to finance a person with no credit history and if they did his interest rate might be pretty harsh because he has no credit. It would probably be best for him if you co-signed the loan and in 2 or 3 years he will have excellent credit and he will be able to get another car on his own.

Answer 9

Maybe, has he any credit, a credit card, borrowed for funiture.

Of course a walmart job is normally lower paying so he would be limited on the amount he can borrow. Also what type of car,new or used, what level of interest rate is he able to pay?

there are buy here / pay here lots everywhere that will let you have a car if you have a job.

At his age, with little credit, it will be harder, and the interest rate would be higher

Answer 10

Jamie D. is right
The borrower is always slave to the lender, just as my mother told me never buy a car unless you have half in cash. It is better to buy a $2000 car, pay half and be two full car payments ahead b/c things do happen. No one ever thinks they will lose their job, or find another job it is better to keep it save and keep your credit free. As long as you loan money you are slave to the lender adn you could do somthing that could make your credit down for the rest of your life. Will you have to co-sign? Yes.. Credit card companies use co-signs for their highest risk customers the ones least likely to pay.If your son fails to pay the loan will be on you.