Comments on: What’s The Best Way To Get Auto Financing With Minimal Credit History?

By: Shifty

Shifty — Fri, 03 Jul 2009 13:59:08 +0000

Many car companies like Honda & Toyota offer incentives for recent college grads, perhaps their in house financing (American Honda, Toyota Financial Svcs) also offer discounted finance rates. As far as being a first time buyer, many banks such as Cap One are going to need you to find a cosigner. Go to the dealer and if you have a 650 FICO (you must have SOME credit or else you wouldn’t have a score) you should fit into a first time buyer program offered by one of the many finance companies they work with as long as it isn’t a little Mom & Pop dealership.

By: Junglebo

Junglebo — Fri, 03 Jul 2009 13:59:08 +0000

honestly you might be better off just buying yourself a “beater”..
why?…a car is a depreciative propety….the longer one owns it..the less it is worth..the more one uses it..the less it is worth..
then on top it it..you want to “finance it”….
why?..just so you can be “upside” down in it..basically oweing more than what the car is really worth.
wouldn’t it be better..and cheaper… to own an older car and have it paid off..then to have a better looking car and be paying on it to hell freezes over???
it will take you more than like 4 years to pay off this car..but that time you’ll want another “new” car and will be caught in the same trap..

By: xxted_st

xxted_st — Fri, 03 Jul 2009 13:59:08 +0000

I’m surprised no one has said this yet, down payment is VERY convincing to a lender. If you can save up a few grand to put down, it lowers the lender’s risk if you default on the loan. It will also help you in the long run by making your payments lower and avoiding a negative equity situation if you want to trade the car early. I’ve been buried in a couple of cars and I won’t do it again.

By: fisherwo

fisherwo — Fri, 03 Jul 2009 13:59:08 +0000

I would join a credit union, and apply for a loan through them. Interest rates are lower, and they’re usually easy to deal with, and can help you improve your credit score, enabling you to get a vehicle. Since you don’t have work or credit history yet, I would wait for six months to a year before applying for a loan, at that point, your employment and credit should look much better, and enough time will have passed, that the credit union will know more about how you handle your finances. As long as you have transportation now, being a recent grad, you don’t need new bills, give it some time. Good luck.

By: pinkyism

pinkyism — Fri, 03 Jul 2009 13:59:08 +0000

get a loan
pay it back
then they will give you a larger one

By: Willis is my cat

Willis is my cat — Fri, 03 Jul 2009 13:59:08 +0000

The only way to get a low interest in auto financing with little or bad credit is with a co-signer. I know its next to impossible to get someone to sign on a car loan unless your parents or signifcant other is cool with that. Regardless of if they have better credit than yours, the 2 scores will mean more resources to obtain the funds (should you not pay back towards the vehicle’s lein.) So even if you and your co-signer had 600-650 credit beacons, combined together it would still offer you a better rate.
If that isn’t an option than there is one more thing you can do…
Buy a brand new car (it doesn’t have to be a cadillac! Kia or Hyundia have new brand cars that start as low as $9,000 and come standard with a 10 year 100,000 mile warranty!) New cars are easier to finance because most banks have an easier time lending their money to new car dealership that is selling vehicles at the standard MSRP (Manufacturer’s Suggested Retail Price.) And it is easier than financing a used car that a dealer can finagle the price to their liking (so the bank gets less bang for their buck AND SO DO YOU.) Another great reason to purchase new vehicles is that after only 6 months of ownership you can go back to that dealership and have them refinance your car at a lower interest rate (because your credit will raise substancially in that short period.) And then you are exactly where you wanted to be without begging for a co-signer to go on the title with you.
And in reference to the gentleman saying that you should buy a beater outright, he obviously has not been made ware of gap insurance, where for just a few hundred dollars on the loan, you can insure that if something happens to your car while you are making payments that the Gap insurance company is responsible in paying off the loan in full. In a 5 year period, you would be driving a paid off car and for the same amount that he spent buying beater cars that require extra out of pocket expenses to maintain and keep on the road.
Sorry it was so long… just something I know a lot about! Happy car shopping!