Elly asked in Business & FinanceCredit · 8 years ago

First time car buyer, no credit..any tips?

Ok im almost 22 and as far as I know have zero credit history. I want a new Mazda3 ive researched and thats the car I want. I plan on putting 3 or $4000 down but idk how to go about the whole process of purchasing a car. I make a lil over $1400 monthly, after my bills I have roughly $800-900 as spending money and ive had my job for about three years now. Do I need a cosigner? How do I negotiate?

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  • 8 years ago
    Favorite Answer

    Auto finance is what I do for a living and there are 10 different things that are considered in a vehicle loan by the lenders.

    1. Term of loan, the shorter the better.

    2. Age of vehicle, 6-years old or less for most lenders.

    3. Miles on vehicle, 50,000 or less for most lenders.

    4. Amount to finance verse N.A.D.A. wholesale value, the lower the better.

    5. Credit score 550 or above, the higher the better.

    6. Credit profile, 3-open accounts including 1 installment loan paid at least 12 times for at least $150.00 a month.

    7. Down payment, $1,000.00 or 10% of sales amount for most lenders.

    8. Monthly income, at least $2,000.00 gross.

    9.Time on job, 2-years for most lenders.

    10. Time at residence. 2-years for most lenders.

    All of these things must meet the lender guidelines to be approved.

    With you being only 22 years old with no credit you most likely will need either a co-signer or qualify as a first time buyer on your own.

    Try your own local bank or credit union first and if that doe's not work find a large dealer that advertises Special Finance and go talk to the Manager, they will be able to help you.

    Source(s): Finance Manager for a car dealer for over 11-years.
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  • 8 years ago

    With no credit, you will probably need a co-signer. If you belong to a credit union, check into getting pre-approved for a car loan -- you can do that with your bank as well but a credit union is usually more willing to work with limited credit history. That way you will know exactly how much car you can actually afford. If you only make $1400 per month, you probably can't afford a new car.

    Dont' string out the payments over a longer term to make the payments smaller. Four years is the max you should finance a new car. Anything longer than that will put you so upside down on the loan. You end up paying a ton of extra interest just to cut a few bucks off the car payment.

    Remember that in addition to the car payment, you have to pay for full coverage insurance, registration, and routine maintenance. don't overextend yourself for that pretty new car.

    Source(s): BD
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  • Kim
    Lv 4
    8 years ago

    if you have enough of a down and can afford the monthly payments they will give you the deal. no credit is not bad credit

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