How to Finance a Car with No Credit
If you have been thinking about buying a car, you could assume that you will have a difficult time securing financing if you don’t have an established credit history. However, even though it is true that it can be easier for someone who has well-established good credit to purchase a car, this does not mean that you are going to have to find something that you can purchase in cash. Instead, consider these tips for financing a car with no credit. Some of these options can also work out if you have bad credit as well.
Save Up a Big Down Payment
First of all, you should know that having a big down payment to put down on your vehicle can be a good way to secure financing. Basically, this helps you secure a loan that you might not otherwise qualify for for a few reasons. For one thing, if you are paying for a decent chunk of the car’s price in cash, the lender will not have to loan you as much money. It also shows that you are financially stable, since you were able to save up money to pay for the down payment. Plus, someone who has invested a large sum of cash into a down payment on a car might be more invested in the idea of making their monthly payments to avoid a repossession. Therefore, if you can save money up for a down payment before you buy a car, this might help you get a loan. Plus, as an additional bonus, it can help you secure lower monthly payments on your car loan as well.
Work with the Right Lender
Some lenders actually specialize in helping people who have no credit or who have bad credit to purchase cars. If you find one of these lenders, you might find that it is actually fairly easy for you to purchase a car. These lenders might charge a slightly higher interest rate, but you can always look into refinancing your loan later on after you have improved your credit score by making timely payments.
Secure Financing Through the Dealership
Some car dealerships actually offer their own financing. Since the dealer will want to sell you the car if at all possible, he or she might still work with you if you have bad credit or if you have no credit at all. The only problem with this is that you will be “stuck” purchasing a car directly from the dealer’s lot rather than having the option to shop around. However, it can still be a good option for those who don’t have good credit scores or who don’t have credit at all.
As you can see, it is actually possible to purchase a car when you have no credit. If you follow these tips, you might find that securing a car loan for your vehicle will be easier than you thought it would be, regardless of the fact that you do not have a credit score.