When you don’t have credit, lenders will be reluctant to trust you, which can make buying a car very difficult. However, that doesn’t mean that you should buy a beat-up old car off Craigslist or accept the ridiculous financing terms offered by Buy Here Pay Here dealerships. Buying a car with no credit is both possible and probable. In fact, it’s easier than you might think! If you do a little homework, you’ll be able to find a quality vehicle for an affordable price with very reasonable financing options. Although it sounds too good to be true, it’s undeniably attainable, especially if you follow the tips we’ve listed below . . .
Buying a Car with No Credit
Assess your finances. First, you need to determine what you can afford. Look at your bank account and your salary, crunch some numbers, and figure out how much money you can put toward a down payment as well as what you can afford to pay on a weekly or monthly basis. This will give you a great guideline when you begin shopping.
Aim to get a great deal. If possible, you’ll want to find a contract with a shorter term to avoid as much interest as you can. With that idea in mind, how far can you comfortably and realistically stretch your monthly allowance for your new car? You can also save money by putting down a larger down payment, so that you’ll need a smaller loan. So, do you need this car right away? Or could you wait a few months to save money for your down payment?
Avoid taxes and fees wherever possible. Many dealerships aimed toward people with low credit or no credit tack on inconvenient fees like upfront sales taxes, license fees, and personal property taxes. When you combine these with awful financing terms, you get an abominable deal. Look for dealerships that can help you avoid these pesky taxes and fees.
Find a reputable rent/lease-to-own dealer. If you can’t pay for a car in cash and you want to avoid the hefty interest rates of Buy Here Pay Here lots (and who can blame you?), look for a rent-to-own or lease-to-own car dealership. The company that you choose should have great customer reviews online, offer exceptional customer service, and have appealing perks. Your approval will be based on factors like employment history, household income, and length of residency, not credit score. Once you’re approved, you can select a vehicle, start making payments, and eventually (once you’ve made the final payment) the car will be yours.
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