7 tips for first-time car buyers with no credit history
TRANSCRIPT
Just graduated from college?
Finally found a job where you
make enough to afford a car? If
you’re looking to buy your first car
but afraid your lack of credit will
get in the way, don’t worry – you
can still qualify for financing, even
without any credit history. Just
follow these steps…
The first thing you should do
before buying a new car is
request a copy of your credit
report from all three major credit
bureaus. Your car dealer will be
looking up your credit history, and
you want to make sure that your
credit score gives an accurate
representation of your history.
Since you don’t know which
bureaus the dealership will be
getting a report from, you want to
make sure all three are correct.
Before you buy a car, it’s important to know exactly what you can afford. Keep in mind that
monthly loan payments aren’t the only expenses you’ll have to pay – there’s also gas,
insurance, and maintenance. Be honest about your monthly budget; if you try to buy out of
your price range, it will cause a lot of problems down the road.
To estimate how much you’ll be paying
in auto insurance, get a quote online.
Keep in mind that a plan with a low
annual percentage rate (APR) will have
lower monthly payments, but will end
up costing you more in interest in the
long run. Shorter contracts tend to have
higher interest rates, but they often end
up saving you money overall.
It pays to do your research when shopping for
a car. Look for used vehicles or leasing
options that may help you save money, and
find out what special offers manufacturers and
local dealerships are offering on certain
models. Don’t just research the cars, either –
be sure to look into the warranty extensions,
protection plans, and other optional expenses
that dealers are offering, and figure out which
ones are worth the additional cost.
Having a family member with a strong credit history cosign on a car loan is often the
easiest way for new car buyers to qualify for financing. If you and your potential cosigner
are both confident that you can make your monthly payments and that signing a loan
together won’t damage your relationship, having an additional signature on your loan can
make buying your first car much easier.
When you go to buy your car, you’ll need to
provide at least six months’ worth of
paystubs/W2s to prove employment and
salary, proof of insurance, up to six personal
references, and proof of school enrollment
and graduation. If you don’t have the
paperwork to show your employment and
income history or haven’t started your new
job yet, have your employer write a letter to
the dealer that confirms your salary.
Congrats! You’ve qualified for a loan and found the car you want. Now all you need to do
before buying is to take your new car for a test drive. Even if you’ve fallen in love with a
car at first sight, do not sign anything before you’ve driven it yourself. If it doesn’t handle
how you want, find a car that does. You don’t want to get stuck with a car you’re not
happy with after all the work it took to get it.
Desert Sun Motors is committed to providing its customers with
the best service and prices on new and used vehicles. To learn
more about our cars, trucks, and SUVs, stop by our New Mexico
dealership or visit www.desertsunmotors.com today.