It’s true…lenders like to see a strong credit history. So what do people do who have no credit history? Is there anyone who specializes in no credit auto financing? In fact, some lenders do have programs set up for first time buyers, but they are few and far between and most people will not qualify. The best way for a person with no credit to get financed is to come up with a co-signer. A co-signer will help to make the process of securing financing much easier and will allow you more options in car buying. With a co-signer, you are more likely to get a loan from a bank or credit union. You can then go out and shop for your vehicle like a cash buyer. You are able to go to the dealership or private party of your choice and purchase the vehicle of your choice.
In the instance that you do not have a co-signer, your options are less varied and you will probably have to pay a much higher interest rate. Unfortunately, while this is more expensive, it is the only way to establish your credit and begin to create a credit history. Even so, there are still some rules you should try to follow if you are trying to secure no credit auto financing.
Some Basic Rules
The first rule of thumb of no credit auto financing is to purchase an inexpensive vehicle. Since you do not have any credit, your interest rate is likely to be high. The more expensive your vehicle, compounded with your interest rate, the higher your monthly payment. It makes no sense to purchase an expensive vehicle and add on a high interest rate. Your goal here is not to pay an arm and leg for a vehicle, but to buy an inexpensive vehicle and begin to establish your credit. If you do this successfully, the next vehicle you purchase can be that “dream car” you have always wanted. It is not the time to purchase your dream car while obtaining no credit auto financing,as your interest rate will very likely be very high.
In understanding that you should purchase an inexpensive vehicle, it is best to avoid luxury auto dealers such as Lexus, BMW, Mercedes, etc. You should look for a local car dealer in your area that specializes in poor and no credit auto financing. These dealers specialize in financing people with no and poor credit and can be instrumental in helping you to establish your credit. The dealer will offer to finance you, as long as the vehicle you purchase is one of their cars. The dealer essentially becomes both the seller and banker. It is important to make sure that the dealer you purchase your car form reports your payments to the credit bureaus.
Use a Company that Specializes in No Credit Auto Loans
Another option is to apply for no credit auto financing through an auto finance company for no credit such as BlueSky Auto Finance. In applying through the BlueSky website, you will be notified immediately if you have been approved from a direct lender. If approved under this circumstance, you will be allowed to go shop for your vehicle like a cash buyer. In the instance that you are not immediately approved from a direct lender, BlueSky then sends your information, if available, to a dealership in your area who is willing to work with no credit auto financing. The dealer will then contact you to come down and discuss your financing options, and to show you the cars available to you. In either case, you are not locked into any contract in applying through BlueSky Auto Fiance. We merely show you what options are available to you.
For more information in applying for auto loans through BlueSky Auto Finance click here.