So, you just turned 18! Well, congratulations are in order, and do you know what the best part about being 18 is? You can get your own car now without a co-signer. Legally an adult now you get to enjoy the perks of being an 18-year old. So, what does it take to buy a car as a fresh 18-year old? You probably don’t have any credit score or credit history. You might be wondering what can be done to make the process easier, faster, and smoother.
A Blessing in Disguise
There is one thing that many adults don’t seem to realize, and that’s how amazing it is to have a blank, untainted credit history. Most 18-year-olds think that having no credit is a bad thing, but that’s not the case. If approached correctly, even if you are not making a ton of money, you can still turn that into good credit. Don’t listen to those who say you cannot get your own car. We are here to give you some good tips and advice on how to get a good and reasonable car loan.
What Makes a Good Credit?
One of the biggest issues 18-year-olds face in the purchase of a new car is the lack of information. They are told that good credit is equal to good payment history only. To make things clear, here are a few things that equal to good credit.
- Paying off loan
- Keeping your credit card balances at a minimum
- Don’t have a ton of accounts
- Timely payments (You need to keep track of your payments)
- Correct use of credit card
Here are a few things that can destroy your credit:
- High balances
- No payments
- Late payments consistently
- Multiple accounts
Getting a Car Loan at the age of 18
We hope you have now realized that you don’t need to have a car purchased before in order to get a new car. In simple terms, “Pay-on-time” that’s the whole point. People that don’t have a credit history can get a car loan, but you will also face a few obstacles along the way, and we are here to tell you how you can get around them.
Having a stable and steady source of income is everything when it comes to getting a car loan. A steady income is an indication to the car vendor that you will be making timely payments and will never be late. You can easily get an income by showing your past bank statement.
Consider Getting a Consigner
If you are worried that you cannot get a car because you don’t have a good credit history, any need to worry and there is a way out. Having a cosigner at your side can help you get an amazing deal on the car loan. In most cases, it is usually the parents that become the cosigner. Remember, having a cosigner is a blessing, and you don’t let them regret their decision. As an adult, you need to start taking responsibilities. These people are helping you out in need.
Large Down Payment
Making a large down payment will make you less of a risk, which usually makes a car lender give you a better deal on the vehicle. So, you might be wondering what makes a huge down payment? Well, normally you pay around 10% of the whole price. But if you want to make a huge down payment, pay at least 30%, 40% or even 50% if you can. This will make your request stand out more.
Look at In-house Financing Options
This concept is called the buy here, pay here concept. You will have to work with the dealer in order to determine what you are able to afford. With their relaxed credit views, they’ll utilize any history you might have, even blank. They will also make use of the down payment, job/income status to calculate how much loan you can get. You will be shown cars that reside within your range, and hopefully, you will be driving off a new lot with your new to you car. You will then have to pay a monthly amount to pay for the loan.
Going an Extra-Mile
Some adults are more likely to go the distance and take extra steps to learn how to manage money. Regardless of how boring it may sound, this is a skill that will stay with you for life and help you everywhere. Here is how you can be a better candidate for the car loan.
Take a good hard look at the budget you currently have. As an adult, you might have a student loan to pay, which is more important and holds the most priority. When you know that majority of your money is going somewhere, you need to be careful about deciding when to buy the car rather than adding burdens on your shoulder.
Get a car that suits your budget rather than going for something more extravagant. Remember, your dream car can wait. Remember to also store some cash away for emergencies such as a mechanical issue or wreck. At 500 Below Cars, you get a 12-month unlimited mile warranty with your purchase, which is always good reassurance.
Learn about the car cost and for how much time you will have to pay for it. Think carefully about what the future holds for you and whether you will be traveling somewhere in that time period, making it difficult for you to drive. If there is a huge payment in the foreseeable future, then you need to wait on getting a car.
500 Below Cars have some great options to help you get the vehicle you need quickly. It doesn’t matter if you have a credit history as we go off stability. We can recommend the right package for you and might get you the car you’ve always wanted. If you are looking for a good car for yourself, be sure to get in touch with us by filling out our in-house financing form.