First Time Car Buyer - No Credit Auto Loans - What You Need to Know to Get a Loan!
First Time Car Buyer - No Credit Auto Loans - What You Need to Know to Get a Loan!
If you have never had credit, or if you have some credit but have never had an car loan, you may be considered a first time buyer. The Banks have different methods to determine if you are a first time buyer or not but usually with no credit or limited credit you are considered a first time buyer. If you don't have credit it may seem like a daunting task to just go out and get an car loan. There are a few things that you can do to get an advantage when dealing with a lender.
The easiest way to get established with no credit is to get someone with good established credit to sign on the loan with you. This is called a co applicant or a co signer. The banks can look up their credit and determine how they have paid in the past. They cannot do this with a first time auto loan buyer. If they determine that your co-signer is a worthy risk then you are home free.
The next best thing you can do if you are a first time buyer is to save up enough money to use as a down payment to make the auto loan less of a risk for the bank. If you can put 25 to 30% down on a car you have a much better chance of getting your auto loan because the loan amount will be low enough that if the bank needs to repossess the car, they will be able to sell it at auction and not lose their tails on it.