How to get a car loan with NO credit?

[Outlaw]

I'm trying to help a friend of mine out get a car loan on a new car. He has no credit, has never had a credit card or a previous loan. He's always done things cash, but, is tired of having older, unreliable daily drivers and would like to purchase a basic car like a Hyundai Accent, Nissan Versa, etc. as a "four wheels and a warranty" type vehicle for work, etc.

-He has been employed by the same company for over a year, and was with his previous employer for almost two years. Has pay stubs showing these terms of employment

-Roughly $1,800/ month in income.

-Has $1,500 to put down in cash and a trade-in of roughly $1,500-$2,000. Roughly equivalent to 15%-20% of the purchase price of the car.

-Has NO cosigner. His mom and step-dad do not have good credit.



I know he can't be picky in this situation, but, he's looking at the Accent and Versa due to their ridiculously low cost. (12,000-14,000 new) Anybody have any recommendations for him? I've set him in the right direction, but, I have never had to deal with a no-credit situation as I had a cosigner in good standing for my first car loan at 17.

Thanks guys!

Click to read more...

 

[Gone_2022]

With a no credit situation they are going to look for a larger down payment as he is a very high risk in their eyes. Without a cosigner that will be tough. He may get approved for a low dollar amount car but his interest rate is going to be far from favorable.

 

[Gone_2022]

If the car was 12k and he could save and with trade in put down 6k that might be enough since he would only be financing 6 grand or so at that point. But again the interest rate will be very very high.

Another option is if he has been at the same bank with his accounts for a while. Check with them? Since they can already see his accounts and deposit history they may be more inclined to lend the money

 

[RICH17]

Go tell him to get a Fiesta from Beast

 

[Outlaw]

He knows the interest rate will be high, he plans on refinancing the car after a year or so when he can show credit history from making timely payments.

I'll have him check with his bank.

 

[boostedguy05]

if it is a new car he is looking at they might be able to work with the bank and not screw him over.

 

[Outlaw]

Yeah, it's going to be a new car for sure. I told him not to even bother with a used car as the terms would be ridiculous if they were even offered.

I just told him to go get a bank account. He's had a re-loadable card from Chase for a while now but doesn't actually have an account.

 

[RICH17]

Let us know either way if he needs a co-signer. I am curious to the outcome

 

[Outlaw]

Let us know either way if he needs a co-signer. I am curious to the outcome

I will. He's pretty much guaranteed to get the Hyundai Accent because his Girlfriend's Uncle is the GM at a dealership. He told him that if he came in with a years worth of employment history and 15% down he could get the car. The reason I'm even posting this would be to try and get him through at another dealer to get a cheaper car. The Versa starts at 11,990 while the accent is 14,800. He does not give a flying fuck about what the car is as it will simply be four wheels and a warranty and he will be selling it when the warranty is close to expiration.

 

[Outlaw]

Yeah, just did a quick build and price.

2014 Nissan Versa S - AM/FM/CD Radio, A/C, 5-speed manual. $12,815

2014 Hyundai Accent GLS - AM/FM/CD Radio, A/C, 5-speed manual. $15,455

My attitude and what I told him was... If it's a car you literally don't give a shit about, get the cheapest one available. He's going to tint the windows and try and find a set of take-off alloy wheels from a higher end model of whatever he gets and that will literally be it.


Edit: Holy fuck, I didn't realize how cheap the Versa was. I'd like to go test drive one just to see how "bad" it really is for that price... That's one hell of a deal.

 

[wombat]

You really should send him to John if he's looking for a base ass model car. He should be able to get him into a Fiesta around that range. [MENTION=4923]The Beast[/MENTION]

Edit: Didn't read your post above yours...Either way, it's worth a shot.

 

[skeezer]

there's tons of dealers that will sell cars to people with no credit.

probably end up having to pay a shit load in interest though.

 

[Outlaw]

there's tons of dealers that will sell cars to people with no credit.

probably end up having to pay a shit load in interest though.

I told him to expect that, get a bank account and pay the car loan from that account for a year or so, then refinance with his bank.

 

[Freebeer187]

What would be a ball park estimate of the interest rate?

 

[Intel]

Yeah, just did a quick build and price.

2014 Nissan Versa S - AM/FM/CD Radio, A/C, 5-speed manual. $12,815

2014 Hyundai Accent GLS - AM/FM/CD Radio, A/C, 5-speed manual. $15,455

My attitude and what I told him was... If it's a car you literally don't give a shit about, get the cheapest one available. He's going to tint the windows and try and find a set of take-off alloy wheels from a higher end model of whatever he gets and that will literally be it.


Edit: Holy fuck, I didn't realize how cheap the Versa was. I'd like to go test drive one just to see how "bad" it really is for that price... That's one hell of a deal.

The newer Versa Note is at least nice. I haven't sat in the Versa S. The older ones are garbage imo except they have a surprising amount of rear legroom at least compared to my mazda 3.

 

[Outlaw]

What would be a ball park estimate of the interest rate?

My guess is roughly 15%. 10% at the low end, could be upwards of 20%.

I told him he's going to have to deal with it for the first year and just don't fuck up and get a good rate in a year or so with a refi.

 

[wombat]

What would be a ball park estimate of the interest rate?

When I had credit (not good) mine was 9.99% on a 10kish loan.

Less than a year later, I took out a 12k loan at 1.99%. None of my car loans since have been over 1.99%. Currently at 1.6% for my ST.

 

[Outlaw]

My Cobalt with cosigner was 3.9%
My Sierra with cosigner was 2.9%
My Mustang W/O cosigner was 3.9%
My Golf W/O cosigner is 1.9%

The suprising thing is I took out short terms on my ATV and bike... I'm paying 2.9% on them... I thought I was going to get FUCKED because they're not considered essential items... but I was wrong.

 

[RICH17]

I wish my credit was better. FML

 

[99PONTIACGP]

The car will be the best thing to get some credit.

My first car loan was 21% on a $9k loan.

 

[wombat]

The car will be the best thing to get some credit.

My first car loan was 21% on a $9k loan.

Holy ouch!

 

[99PONTIACGP]

I should also mention it was the very last one too.

 

[OffshoreDrilling]

try getting a loan from penfed.org

may have better luck with a credit union

 

[Outlaw]

try getting a loan from penfed.org

may have better luck with a credit union

I'll have him sign up for penfed. I'm going to sign up on there too, just to see how their rates are. I may refinance my car with them in the future because I've heard their rates are awesome.

 

[Miller's 06]

Yeah, just did a quick build and price.

2014 Nissan Versa S - AM/FM/CD Radio, A/C, 5-speed manual. $12,815

2014 Hyundai Accent GLS - AM/FM/CD Radio, A/C, 5-speed manual. $15,455

My attitude and what I told him was... If it's a car you literally don't give a shit about, get the cheapest one available. He's going to tint the windows and try and find a set of take-off alloy wheels from a higher end model of whatever he gets and that will literally be it.


Edit: Holy fuck, I didn't realize how cheap the Versa was. I'd like to go test drive one just to see how "bad" it really is for that price... That's one hell of a deal.

First post here, My name is Brandon Miller... Anyways, I work at a Hyundai dealership. If your friend and you want to come check out an Accent, let me know. We work with a lot of people. I actually sold my gf a 2014 Sonata, so I do believe in the cars, lol.