What To Know About Buying A Car With No Credit History

13 June 2016
 Categories: , Blog

Buying a car can seem almost impossible when you don't have any credit history. However, this isn't the case. Buying a car with no credit history can actually be done if you just know the right way to go about it. Here's what you should know about buying a car when you have no credit history:

  1. Be Realistic: When you are shopping for a car, it needs to be priced low enough that it's only taking out a small chunk of your monthly income. When lenders take a look at your monthly income, they will see that you are more likely to pay the monthly payment on a loan, which makes them more likely to approve you. Attempting to finance a car that is going to take up a large chunk of your monthly income definitely won't get approved, especially when you have no credit history to support your ability to pay the monthly loan amount. 
  2. Have a Down Payment: Another way to prove your responsibility financially to lenders when purchasing a car is to have a down payment ready. Besides, having a down payment can benefit you, as well. This is because it is going to significantly reduce the amount that you are paying for the car each month. 
  3. Find Programs That Can Help: There are a few programs that will help you finance a car when you don't have a credit history. For example, there is a first-time buyer program. This program will help you purchase certain models of vehicles. Just keep in mind that you will need a down payment, as well as a steady job to apply. The benefit of programs like this though is that you won't need a co-signer, which allows you to avoid having to ask a friend or family for help. 
  4. Find a Co-Signer: Of course, having a co-signer is never a bad thing. It just means that you will need to be sure that you are definitely paying the monthly car payment or it can negatively affect the co-signers credit. A co-signer with good credit history is best because this gives lenders reason to believe that no matter what, they will get the monthly payment they are owed. 

When you know these things about buying a car when you have no credit history, you can see that it's definitely possible as long as it is done in the right way and with a realistic mindset. Click here to learn more about car financing services.