Obtain Your First Car Loan
advice for first-time car buyers: Plan for your car loan
before starting your vehicle search. Don’t let the first car
excitement turn into agony. Learn the 3 things that are
necessary for every first-time car buyer.
harder you work, the luckier you become.”
first-time car buyer should keep these words close to his
heart. Auto loan process is difficult for everyone. But, it
becomes a harrowing experience for first-time buyers because
of their ignorance and inexperience.
you are in the auto financing market for the first time, do
not worry. You need to take care of three important things
because they will ensure a successful car buying process.
of barter are over; the era of cash is forever.
cannot buy anything without cash. Even if you apply for a
car loan, you will be required to make a down payment. So,
it is important that you work-out your budget before buying
a car. You will need cash for the following things:
Registration fees and taxes
make sure that you are ready to assume the financial
responsibility of a car before searching for one.
the days of report card, the days of credit report begin.
like colleges and universities check your SAT scores before
approving your admission request; lenders check your credit
score before approving your car loan application. Your
credit score will determine your credit worthiness and help
lenders in deciding the interest rate. Ninety percent of
lenders opt for FICO score provided by any of the three
credit bureaus: Equifax, TransUnion and Experian.
credit bureau gives different importance to credit score
components. So, there are differences in each of your credit
score. And, every lender has the right to use a credit score
from any of the credit bureaus. So, it is important that you
concentrate on your credit score range and not your exact
credit score number.
you have not obtained any type of credit before, you will
not have any credit history. Following are the options for
car buyers with zero credit score:
Obtain a no credit auto loan program for your first car.
Ask your parent to assume the responsibility of the loan.
Build your credit score by obtaining a secured credit card,
department store card, etc.
Usually, a first-time car buyer has zero credit history.
This creates a risky situation for lenders. They don’t know
whether they can trust someone with no history of making
regular payments. It is for this reason that lenders require
someone with established credit history to co-sign you loan
Remember that a co-signer is different from a co-applicant.
A co-signer has no right on the ownership of the car whereas
as a co-applicant has equal right. You can ask your friends
or parents to become a co-signer.
you have trouble finding a co-signer, you can request the
lender for approving your loan application without a
co-signer. Although, no co-signer option should be
considered as the last resort because it is expensive.
So, these are the three things that should be kept in mind
before searching for your first car loan