I have absolutely no credit. How can I buy a car?

Question

I'm 19 and haven't had time to build up any credit. And I have don't know anyone who could cosign for me. So I'm probably stuck with a buy here pay here place, aren't I?

Answer 1

No. Avoid buy here, pay here places at all costs. You will only end up paying twice as much for a car that you will likely tire of and have other maintenance costs as well. Buy a car off an individual, hunt classified ads, shop eBay, visit the back lots of reputable dealerships (lots of times trade-ins that are over 10 years old can be bought very cheap before they are cleaned up and put on the used lot) ...or get a credit card and checking account to build up credit and save up until you have enough money to start making payments on a new car.

Answer 2

Not necessarily. If you have a regular job and no bad credit, a lot of the time you can go to a smaller used car dealer and get financing. Check around. I'm sure that you can find someone who will lend you money against a sum what late model car. Just be care full not to allow them to jack the payment up, so you can't afford it and end up not being able to keep the payment up. Before you settle on any car check around and see if you can beat the interest rate down some. Even if the payment is a little bigger, with shorter terms ( less payments to payoff), you may be able to get the interest down some, which means you will be actually paying less for the car in the long run. Remember this, The less # of payments and the less the interest rate the less you are going to end up paying for it. (Do not let anyone take advantage of you. If you are not sure about a car, insist on having a mechanic check it out. It will save you money later. Your mechanic, not the dealerships)

Answer 3

No.....buying a car on credit is a good way to build your credit.

Check with a very small community bank to see if you can get a loan. You will need to pay part of it in cash, so you need to have some money saved up.

Most banks won't give car loans for less than 8 or 9 thousand dollars, so you will need to at least get a car for that much.

You MUST have a job and prove you can make a car payment.
A $10,000 loan will probably require monthly payments of $215 per month for 5 years.

Car loans are not difficult to get. Don't get fooled into taking a high interest rate, either. Just because you don't have credit doesn't mean they can charge you a 10% interest rate.

Answer 4

Have you had a checking account for a good amount of time? Your bank may give you a loan if you have done business with them for a while. However, you would be considered "high risk", and if they did approve you for a loan, the interest rate would be extremely high, and you would end up paying much more than the car is even worth just in interest. Unfortunately, at your age and with no credit, it's not likely you will be able to get a loan without a cosigner. But if you have a steady job and have been responsible with your checking account, your bank may decide to take the risk on you. Just go talk to a loan officer.

Answer 5

My first suggestion would be to save up your money and pay cash for a cheap newer car. Drive this while building your credit. Then save money for down payment and purchase a newer car.

If you must purchase a car right away, I would suggest finding a Buy-here Pay-here lot. They normally do very little credit checks and since the cars are cheap, normally only take a year or so to pay off. These can help you slowly build credit and will solve the problem of not haivng a car if you do need one right away.

Answer 6

Do you really need a car right now? Think creatively and maybe you can wait until you save up a down payment or enough cash to buy a car. In the mean time see if your bank will give you a credit card with a $200 or $300 limit so you can establish some credit.

Answer 7

Check with the car dealer and see what they would require for someone in your situation, and without a co-signer. If you have a job and a bank account, sometimes a letter of verification from the bank saying that you are a customer in good standing will help you when trying to finance a car. Bring your payroll stubs from your employer too, so they can tell you how much you can qualify for. You could also save up some cash and make a larger down payment than what is required. The less that you have to finance, the better your chances of getting approved are. Good luck!

Answer 8

There are plenty of dealerships these days that will work with you even if you have no credit. They will definitely require you to have a job and at least a small down payment, and I'm sure they'll want some references from you, but I hear commercials for car dealerships (mostly Kia) all the time that say that if you have a job and $199, you can get into a car. Just try to stick with a car that is very affordable, because they will definitely be checking to see if you're going to overextend yourself. Good luck!

Answer 9

Stacey,
I work for a Chevrolet dealer, Unless you have a good amount for a down payment it will be very difficult for you to get an automobile loan on your own, and the intrest rate may be very high. You must be open to a entry level car ( Cobalt or aveo). and you must have a full time job. Dont listen to those commercials you see on tv, late at night about how they can get you into an automobile,.the buy here pay here place are not going to help you est. any credit...they do not report to the credit breaus....Mike

Answer 10

at a VERY HIGH interest rate!! save up the money if you can. loans from car dealerships are bad news! if you have the time, work on building up some credit first by taking out a small loan from a bank, or applying for a credit card (and not using it!).