No Credit/ Bad Credit Car loans

Well I need a car. My transmission is going out and it will only last a week or two more.

I OBVIOUSLY need a car, lol. But I'm a 20 year old with no credit  but a Kohls Charge Card and some student loans that are deferred. I have no cosigner  because both my parents have horrible credit.

I was looking on line at places like rapidcarloans.com and stuff like that. Are those trustworthy?

I assume you have a job?  If so, ask if they have a credit union.  Sometimes you have to pay a small initiation fee but they offer really good rates. 

If you walk into the dealer with your own financing, you will most definitely get a better deal.  The other thing you may have to be prepared for is a larger down payment.  Generally if you have little/no credit history or bad credit, you may be expected to put as much as 20% down. 

Other than those options, perhpas hit your rich uncle up for the money!  Good luck!

Well if my dad loans me the 1500 dollars until i get my  refund check then I can put 1500 down on 6000 dollar car which is a little more then 20 percent..but wont they still want a cosigner?

And I have three jobs. But None as fancy as having a credit union.

But...u didnt answer about the badcredit/no credit type of loans. Are those good or ripoffs?

The summer before my senior year of uni I had bad credit but had a full-time job at a psych hospital. I was able to get a brand new car, no problem, from a dealership. I went to two dealers in my hometown (a medium-sized city and was told I needed a cosigner) but I wanted to do it on my own. I went to uni in Kentucky so I contacted a couple dealers there and was told they could get me in a car that week. My interest rate was a bit high but my payments weren't that bad. The thing that sucked was my car insurance because I was used to having basic coverage on an old car. If your car is financed you have to have full coverage until the payments finish, I believe. 

h,mm..guess I will make phone calls to a few smaller places. Hopefully someone there will take me

a) get a credit card (at some point--- you need to build credit.  you dont need to use it or put on a recurring bill, like your um car payment :) and set up auto pay to pay it each month immediately.  Your score is based, in part, on your debt to available balance ratio).

b) credit unions are usually based on locality or place of work.  for example, i could be a part of a credit union in my home state because i lived in the specific county, and because i joined a long time ago, i can stay with them.  because of this-- and 20 years with them and my parents with them etc-- they financed my mortgage-- despite my very poor credit.  you may find one based on local or job type, etc.  as a student, i was eligible for being a party of my college's credit union.

c) whomever said credit union for car loans is RIGHT on the money.  try that!  and second, just because you have LIMITED credit does not mean you have no credit.  go run a credit report and get your FICA score.  That will give you a better idea of what you are looking at.  Yes, at your age and your likely low income, you are looking at a higher interest rate and maybe a higher dp-- but-- knowing where you stand in regard to other borrowers will help you get the best deal.  Also-- you can look at buy here/pay here lots (higher interest rates/up the b-u-t-t/but have a car because i have to have one/type of lots), but i think you are better off trying to get a conventional loan OR finding enough cash to get a cheap car (i.e. 3K can get you a lot).

GOOD LUCK!!

Original Post by drea99:

a) get a credit card (at some point--- you need to build credit.  you dont need to use it or put on a recurring bill, like your um car payment :) and set up auto pay to pay it each month immediately.  Your score is based, in part, on your debt to available balance ratio).

b) credit unions are usually based on locality or place of work.  for example, i could be a part of a credit union in my home state because i lived in the specific county, and because i joined a long time ago, i can stay with them.  because of this-- and 20 years with them and my parents with them etc-- they financed my mortgage-- despite my very poor credit.  you may find one based on local or job type, etc.  as a student, i was eligible for being a party of my college's credit union.

c) whomever said credit union for car loans is RIGHT on the money.  try that!  and second, just because you have LIMITED credit does not mean you have no credit.  go run a credit report and get your FICA score.  That will give you a better idea of what you are looking at.  Yes, at your age and your likely low income, you are looking at a higher interest rate and maybe a higher dp-- but-- knowing where you stand in regard to other borrowers will help you get the best deal.  Also-- you can look at buy here/pay here lots (higher interest rates/up the b-u-t-t/but have a car because i have to have one/type of lots), but i think you are better off trying to get a conventional loan OR finding enough cash to get a cheap car (i.e. 3K can get you a lot).

GOOD LUCK!!

Yea I'm really concidering one of those buy here pay here lots. I know the interest is out the b-u-t-t..but hey..it will build my credit and I will have a car for relativly cheapish.. giving me good credit to buy a "real" car when its time.

I'm looking at a max of 1500 downpayment but thats gonna be more then 20 percent of my 5-7 thousand dollar car so hopefully that is good enough.

And about the credit union. I bank with Max Credit Union "mymax.com" if anyone is interested. I applied online for a 8000 dollar loan. Hopefully since me and my mom..who is on my account..have been banking there for YEARS they will help me out. And my student loans are thru them.

ALSO..i tried applying for a credit card through them but they said I needed a cosigner I think. I didnt put too much thought into it at the time so i didnt ask too much.  Where do I get a credit card that doesnt require one. I was thinking about paying my utilities on it and then paying it back right away. Something cheap but...still something.

I suggest buying a new car, but one of the ones from a previous year they havent sold yet. A lower cost new car - not super expensive. Because these are new with warranties still - and dealerships need to rid of them you can find the best deals there.

Bad credit, no credit used car places charge INSANE interest and can require larger downpayments.

If you have no credit (and not bad) you can still walk into a dealership that offers 0% or 2/3/4k cash back and demand 0% interest, yes demand.

Some dealerships will almost laugh after running your credit and be like, oh no, best we can do is 10% - at which time you immediately walk out. 9 times out of 10 they will come after you. Majority of time they will "check with their financing company" or some other b.s. and call you back.

When 1 dealership, it doesn't matter which one, Ford, Chrysler, Honda, whatever - when one of them call you back to agree to the 0%, you call the other dealerships and say, "So and so at such and such dealership has agreed to give me 0% with $x down, but I would really rather buy a car from you."

They will probably have to call you back. Someone else will say yes.

Remember: if you buy a used car, and pay on it for 3 years without a warranty, and after 2 years it breaks down, you will need to find the money to fix it PLUS keep paying your car loan - this is a horrible situation that gets most people repossessed. Some things on a used car are not worth fixing because the cost to fix is now worth more than the car's value.

You are young and your options that make the most sense for your financial freedom later would be: pay cash for an older used car and have no loan, or buy a new car with full warranty for less than like $12k at 0%

Check out this story - it is also so much help.

Hyundai or Kia have cheaper new cars.  You'd be surprised what a dealership can do.  Just because you have little credit doesn't mean you can't be approved.  Go to a dealership.  Know what you want so they don't try to rip you off... take a friend with you.  Seriously, try the traditional route first... you'd be surprised.  The dealership will work with you to get financing.  If you pay your bills on time (that includes cell phone bills, uni bills, your Kohl's card bill) you may be able to get a car loan from a dealership (they do their loans through the big banks) without a cosigner.  Seriously.  I got my first car loan at 22 years old.  Try.  You have nothing to lose.  Assuming you need a cosigner is a good way to get ripped off by a nonreputable dealer.  Go to a big dealership and try.

I went to one of those bad credit, no credit used car places and the payment on the car was going to be like $425/month. When I went to a regular dealer I got a brand new car for $256/month. And I was 20, like you OP. 

Unlike the poster two posts before me said, I HIGHLY doubt you'll get 0% on a loan with no credit. 

Original Post by alibsam:

I went to one of those bad credit, no credit used car places and the payment on the car was going to be like $425/month. When I went to a regular dealer I got a brand new car for $256/month. 

Unlike the previous poster said, I HIGHLY doubt you'll get 0% on a loan with no credit. 

 I didn't say they'd get 0%.  I said they'd get financed....

You posted while I was typing, michachu. I corrected my post. 

I was in the same boat you were.. needed a car, had no cosigner, credit wasn't spectacular and i had ZERO dollars that I was going to put down for a down payment. I went to a Nissan dealership just to see my options figuring they would laugh in my face when I said 'What can I look to get if I wanted to give you ZERO down right now?' .... but because of the market right now they are desperate to get people buying/leasing new cars so I was able to walk out that day with a brand new 09 Altima. My monthly payment is higher than normal (because it is the typical $199/mth payment but then also $200 a month for what would have normally gone down as at the down payment) but because I needed a car right away I don't mind the higher payments - I would have had  to have been putting that money aside every month for a down payment anyway, now I just pay it with the payment and was able to get my car right away.

I had a hard time getting a loan on my own from my bank because I had no history of installment loans (even if you have a history of credit banks tend not to issue you an installment loan without a history of payment on one ie another car loan, mortgage etc).. it was a vicious circle that frustrated me to no end (how am I suppose to establish a history of installment loan payments if no one will give me my first installment loan?!) but the dealership obviously has pull with the banks (the bigger/more reputable the dealership the better) and obviously were able to work something out.

Car dealerships do not care what financing you get - it doesn't effect them at all. 0% $2k cash back etc etc.

Their only job is to get you to buy a car. They do not finance it themselves, they have a seperate company that does that. If you buy a car and default on the loan the dealerships dont care - because they already got their money.

Because their only job is to SELL the car, especially now, they will bust their ass to try and get you financing, and if you say 0% and they come back with even .5% that is still fantastic.

Do not let them box you in to a monthly payment ever. Do not take a 72 month loan to get lower payments if you get a warranty for only 3 years.

I have done this, and I have gone with friends to help them do this. It will take effort to go to all the main dealerships, and then patience while they figure things out, a few days to a week - but it is completely possible, with zero down, no cosigner, to get 0% with no credit (bad credit idk anymore, still could a  couple years ago)

So as I said before, get a cheap used car. You can find a $2k car with maybe a 6 month warranty (because you will not find a $6k used car with much more warranty than that) and it might last much longer or have very cheap things need to be fixed.

OR, get about the cheapest new car you can.

While I agree that a dealership is probably your best bet, I would be wary of all car salesmen! (or women) They are always looking out for themselves and not your best interest.  Do some research on the car you want to purchase and go in armed with knowledge, facts, printouts, etc.

Also keep in mind that when dealerships say "all credit applications accpeted!" it means that they do have outside financiers that will get you loan, even if it's at an outlandish interest rate.  Hold out for the lowest intersest rate you can get.  I mean, who wants a 72 month loan at 18% interest? Not good!

Is the only thing wrong with the car the transmission?  Because it would be cheaper to fix and then save your money for a good car.  You could get a different car and it could have problems too.  I do not recommend getting into debt with a new car even at 0%.  Newer car = more expensive for insurance, tags, and taxes.  At 20 years old, with deferred student loans and not much credit, working 3 jobs, I would recommend that you keep what you have especially if the only problem is the transmission. 

Buy here/pay here places don't neccessarily report to the credit bureaus - so it's not likely to help your credit to make use of them.

I agree you probably have a fair chance of getting financed at a dealership - especially if you have 1500.00 to put down. I would consider buy here/pay here a last resort.

Carmax does a great job of vetting automobiles and getting financing for marginal buyers - am sure Autoway would be good for that as well.

Original Post by kdh1221:

I suggest buying a new car, but one of the ones from a previous year they havent sold yet. A lower cost new car - not super expensive. Because these are new with warranties still - and dealerships need to rid of them you can find the best deals there.

Bad credit, no credit used car places charge INSANE interest and can require larger downpayments.

If you have no credit (and not bad) you can still walk into a dealership that offers 0% or 2/3/4k cash back and demand 0% interest, yes demand.

Some dealerships will almost laugh after running your credit and be like, oh no, best we can do is 10% - at which time you immediately walk out. 9 times out of 10 they will come after you. Majority of time they will "check with their financing company" or some other b.s. and call you back.

When 1 dealership, it doesn't matter which one, Ford, Chrysler, Honda, whatever - when one of them call you back to agree to the 0%, you call the other dealerships and say, "So and so at such and such dealership has agreed to give me 0% with $x down, but I would really rather buy a car from you."

They will probably have to call you back. Someone else will say yes.

Remember: if you buy a used car, and pay on it for 3 years without a warranty, and after 2 years it breaks down, you will need to find the money to fix it PLUS keep paying your car loan - this is a horrible situation that gets most people repossessed. Some things on a used car are not worth fixing because the cost to fix is now worth more than the car's value.

You are young and your options that make the most sense for your financial freedom later would be: pay cash for an older used car and have no loan, or buy a new car with full warranty for less than like $12k at 0%

Check out this story - it is also so much help.

this sounds good..but even without a cosigner?

Original Post by akgal:

Is the only thing wrong with the car the transmission?  Because it would be cheaper to fix and then save your money for a good car.  You could get a different car and it could have problems too.  I do not recommend getting into debt with a new car even at 0%.  Newer car = more expensive for insurance, tags, and taxes.  At 20 years old, with deferred student loans and not much credit, working 3 jobs, I would recommend that you keep what you have especially if the only problem is the transmission. 

its  falling apart slowly. No part in putting money into it. Its oil leak is insane and I have to put oil in it every week