The excitement of purchasing a new car can fuel lots of activity. You find yourself noticing every model on the road and comparing it to your mental check list of pros and cons. You spend your weekends cruising car lots to find exactly what you want. When you find the right car your dreams of ownership are complicated by the need for a car loan. Don't despair. There are ways to buy a car without having credit.
Save a large enough down payment. One of the ways to counteract a lack of credit is to up the ante. If the normal down payment in your area is 10 percent of the purchase price and you have no credit, you might need to offer 20 percent down to entice the lender to take a chance and finance the rest for you.
Call or visit your chosen lending institution to discuss the situation. Sitting down with the banker and explaining your desire to purchase a new car can open the door to some good advice and maybe even a commitment on her part to make it happen. Take notes and be prepared to follow her advice so she can see that you are serious about getting that new car.
Take over someone else's lease. Though credit ratings are factored into vehicle leasing decisions, the requirements are often less stringent on a lease than on a purchase according to LeaseGuide.com, therefore, you may be able to get into a vehicle now, and exercise the option to buy it later.
Obtain a co-signature. In many cases, the lender will be willing to give you a loan for a new vehicle if someone who has a positive credit history is willing to co-sign on the loan. Co-signing means if you default on your payments, the co-signer will be equally responsible for making them, so if you ask for someone to co-sign, be very sure you are going to be able to make the payments for the life of the loan.
Pay cash. If you cannot convince a lender to take a chance on you and you do not have a co-signer, you can always pay cash for the vehicle. If you have saved enough to get close to the asking price, don't be afraid to negotiate price with the dealership or seller. Many times, if you offer a cash price that is less than the asking price you will drive away with the vehicle because the seller won't have to worry about defaulted payments or the car getting wrecked and not being paid for once you give him the cash.
Ask to see the total car price. Wells Fargo Bank recommends focusing on the bottom line and what you will pay out over the length of the loan to determine if it is a good deal for you. They also recommend checking the insurance rates for the vehicles you are interested in and adding that payment into the total monthly cost of owning the vehicle, to know if you can afford to make the purchase.
- Go to AnnualCreditReport.com to obtain a free copy of your credit report. Check for errors and contact the agencies listed to request changes to any incorrect information that is on it.
Candace Webb has been writing professionally since 1989. She has worked as a full-time journalist as well as contributed to metropolitan newspapers including the "Tennessean." She has also worked on staff as an associate editor at the "Nashville Parent" magazine. Webb holds a Bachelor of Arts in journalism with a minor in business from San Jose State University.