You know those places that say you can buy a car with no credit or bad credit? Well, you really can buy a car with no credit or bad credit, but you are going to fork over some extra cash, and you might need to spend some extra time actually looking around for a car. How do you actually get financed if you have bad credit or no credit?
First a quick recap of what is meant by “no credit.” This basically means that you have no credit history which means banks don’t know if you are able to repay your loans or not. This is slightly better than having bad credit because at least you have the benefit of the doubt of paying your loans back.
Either way, you are going to have to pay more interest and you are going to have to downgrade your car buying plans. Based on your income and other factors, you might not get financed for anything over 10,000 dollars over 60 months. This might sound like a nice loan, but you are going to get either a used car or a Hyundai Accent if you want to buy new. Nothing against the Accent, but its not a great car by any means.
The best way to go is to get yourself pre-approved before you go to the dealership. This is best in most cases anyway, but at least you will know what you are able to buy. There is nothing worse than getting to the dealership and not being able to buy the car you want because of rejected financing efforts.
Be patient if you have bad credit because most banks will probably reject you or force you to pay a really high interest rate. Be prepared to put down a little bit of a lump sum payment on the car as well because you are going to have to make up any difference in the amount between what the car is worth and the amount you are financed for.
Buying a car with bad or no credit isn’t impossible, but there are hassles to doing so. The good news is that if you pay off your loans this time you will have an easier time getting credit in the long run and will be able to afford the car that you really wanted all along. So make your payments and you won’t have the “no credit, bad credit” issue next time.