I am 19 years old and I'm buying a new car for myself. I have no credit and no one will be co-signing the vehicle for me. I'm not exactly sure how all of it works but I know I have enough money in my account to purchase the car without having to finance. I don't know if the dealership will sell me the car because I have no credit history regardless of the fact that I have enough money to pay for it. Is it possible for me to just buy the car with cash though I don't have credit?
2007-04-30 18:10:31 · 8 answers · asked by Lisa N 1 in Business & Finance ➔ Personal Finance
Yes, you can pay cash. It is the best thing to do because you dont want to pay interest on a depreciating asset. Dont spend too much money on a car. Maybe you should consider a used car that is 1 or 2 years old with low miles.
2007-05-01 01:55:04 · answer #1 · answered by richkvegas 3 · 0⤊ 0⤋
First, are we talking new car or used? What kind of price range? I'm going to have to disagree with everyone here that has said don't use credit if you can pay cash. Yes, it's true, you will get a much better price if you pay cash...but the fact of the matter is that you need very desperately to establish good credit, and the sooner you do that in life the better. Example: I began establishing credit the day I turned 18 and I'm currently paying 8% interest on a USED car loan through my bank.
I also happen to manage a buy here pay here car lot and I see the other end of the spectrum...if someone walks into the lot with no credit, they are paying 24.9% period. The interest is not such a huge issue on small purchases like used cars, but later in life when you buy a house, etc, 1% difference in interest is going to be around $85 a month on a $100,000 house...that's over $30,000 extra in interest over the length of the loan just from that one percent.
Credit scores are becoming increasingly important and I think it's going to be the most valuable possession you have over the course of your life. My best advice to you is to buy a relatively cheap car ($5,000-$10,000) and take out a loan for it. If you have the money to pay for it, please keep that money set aside in a savings account or invest it...who knows, if you do well you may even make enough on your invested money to cover the interest on the car. 100% make your payments on time or ahead of time every time and extend the loan out as long as possible (make sure you negotiate this at the start). This will give you the best possible start on your credit score, and likely save you hundreds of thousands of dollars in interest over the course of your life.
2007-04-30 20:11:07 · answer #2 · answered by Zeph 1 · 0⤊ 0⤋
Yes. You don't need credit if you have cash. You do need to be well informed about how much to pay for the car. Go to Edmund's and Kelley Blue Book for some idea of invoice and list prices on the car. Also, check recent ads for similar new cars in the newspaper. Depending on the car, the actual selling prices may be below invoice before rebates. Take a friend with you whose job is to make you leave the dealership if they start trying to rip you off. Agree on a a code word and you must agree to leave right away if your friend uses the code word. Car dealers can be incredibly high pressure. Remember, there is no such thing as a deal good today only. Good luck.
2007-04-30 18:20:49 · answer #3 · answered by Joe 5 · 0⤊ 0⤋
Yes! If you use credit when you have no credit history to purchase a car, you will pay a very, very high interest rate.
You might offer to put 50% down in cash and finance the balance over 3 or 4 years. This way you may qualify for a decent interest rate (5-7%).
DO NOT let them talk only about 'monthly payments'. YOU want to talk only about the purchase price and the APR (annual percentage rate) for the financing. And no 'added finance charges', fees, or any other extra charges. READ the FINE PRINT before you sign the contract!
P.S. It may be wise to talk to your bank FIRST about a car loan, rather than risk getting 'reamed' by the dealer.
2007-04-30 18:22:29 · answer #4 · answered by Doctor J 7 · 1⤊ 0⤋
No, you can't pay cash for a car with no credit. Nobody accepts cash. What kind of a question is that?
2007-05-01 00:46:47 · answer #5 · answered by Big R 6 · 0⤊ 0⤋
the best way to buy a car is with cash. dont get something you cannot afford. there are plenty of cheap cars out there to get you started. if you cant pay cash, dont buy... last words of advice.
2007-04-30 18:26:38 · answer #6 · answered by amdollar 3 · 0⤊ 0⤋
The bank wants the copies of your title and such to verify ownership. Do not sign or release the title or vehicle to him until you have the cash in your hand or transferred into your account.
2016-05-17 22:10:22 · answer #7 · answered by ? 3 · 0⤊ 0⤋
You're an idiot.
2007-04-30 18:21:42 · answer #8 · answered by jcb74672 1 · 1⤊ 0⤋