Getting a car loan - no credit history

[AmyWrites 593]

Banks have refused to give us car loans left and right because we don't have a credit history (got our first credit card a week ago), even though my husband is making well into a six figure salary. I don't know what to do. Any advice? I don't work so there's no point in having me apply for a car loan.

[apple21 953]

Cash?

[jfgk1987 303]

Well how much of a down payment is he willing to make percentage wise? Is the car new or used? You can get a cosigner for a loan. You can also buy a car outright (less ideal, I know) to keep for a few years until you build up enough credit.

Edited June 21, 2014 by jfgk1987

[AmyWrites 593]

Well how much of a down payment is he willing to make percentage wise? Is the car new or used? You can get a cosigner for a loan. You can also buy a car outright (less ideal, I know) to keep for a few years until you build up enough credit.

We're giving half down on the car, the car is new, and costs $25,000. I don't know anyone who has good credit to be a cosigner . I guess we can pay outright, but that's not an ideal option.

Edited June 21, 2014 by AmyWrites

[jfgk1987 303]

We're giving half down on the car, the car is new, and costs $25,000. I don't know anyone who has good credit to be a cosigner . I guess we can pay outright, but that's not an ideal option.

If you pay outright you end up saving on the interest charges you would have if you got a loan.

Your own bank won't even give you a loan?

EDIT: Try asking the bank "how much would you be willing to loan me?" as opposed to asking for a 12.5k+ loan. The loan would be greater than 12.5k, unless the 25k includes taxes and fees.

Edited June 21, 2014 by jfgk1987

[AtariBaby 17]

I have two suggestions for you.

1) Can you save up enough to buy the car outright? I have heard (but have never actually tried it) that if you go into a dealer and offer to pay cash for a car, but you want them to set you up with a car loan of at least one remaining payment, they'll make it happen. Make sense? Then you have credit. EDIT: my mistake; I thought you were looking to establish credit, but it appears you actually don't want to go ahead and pay for the car.

2) Go to yelp and find the highest rated credit union in your area. A credit union is like a bank, but it's a non-profit. They used to only represent certain groups, like firemen or teachers, but now most (though perhaps not all) are open to the public. A credit union, like I said, is a NON-PROFIT. They work for you. They will give you a clear path to getting a car loan. Don't take my word for it; talk to them on the phone or in person. It may not be immediate, but they will probably tell you basically that if you keep a positive balance or prove you are good with a secured credit card for a short period of time, they will give you a loan.

Edited June 21, 2014 by AtariBaby

[Avery Cates 1,141]

You're going to have a very hard time getting a loan without credit. Even renting an apartment in a non-shitty area you need at least a decent credit rating on.

If you have a long established relationship with your bank, talk to someone there and see how much they'd be willing to loan you, and then pay the rest in cash. Probably going to be your best, if not only, option.

[KayDeeCee 4,893]

~ Moved from Moving Here and Your New Life in America to Tax & Finances During US Immigration - topic is finances(car loan/credit) ~

[Gosia & Tito 199]

Banks have refused to give us car loans left and right because we don't have a credit history (got our first credit card a week ago), even though my husband is making well into a six figure salary. I don't know what to do. Any advice? I don't work so there's no point in having me apply for a car loan.

Seems like you need to shop for a new bank.

You would be surprised how much the loan requirements change from bank to bank.

Consider a credit union - their rates will often be lower and their loan requirments much more down to earth

[N-o-l-a 7,167]

Well, you could do what we did and pay 26k for a car with cash or you could buy a cheaper car in the mean time. There is no shame in getting a nice used car.

By getting a loan on a car you are paying more for it long term and with no credit history you aren't going to get a really good interest rate.

[AmyWrites 593]

We've talked about it and it looks like we're going with paying it off (or at least, most of it off) in cash. We've just gotten our first credit card so hopefully we'll establish some history there, and at least be able to rent an apartment. On Monday I'm calling credit unions around. I'm not keen on the idea of borrowing money but it seems like it's the only way to get a credit history.

New twist though: car dealer says he can't sell us the car without a license from that specific state. Anyone dealt with this?

[LORIEandPHIL 123]

I got a car loan from my local credit union without any credit history. It's at 8.5% so not great, but it is a good way to start building credit. I also got a secured credit card from them with no fees attached, (another good way to build credit). I agree with other posters, that credit unions are your best chance of getting a loan.

[Happytobe 164]

My husband just immigrated in November... With that being said, he was financed at a high interest rate with only $3000 down, and just his drivers permit (no co-signer). We are going to refinance after about 9 months to drop the payment down. That was through Toyota and Toyota Financial Services.

I'm really surprised that with half down, no one will finance you guys. Keep looking and good luck.

Edit: he had his job for about 5 months and he is on the apartment lease.

Edited June 22, 2014 by Happytobe

[Gosia & Tito 199]

We've talked about it and it looks like we're going with paying it off (or at least, most of it off) in cash. We've just gotten our first credit card so hopefully we'll establish some history there, and at least be able to rent an apartment. On Monday I'm calling credit unions around. I'm not keen on the idea of borrowing money but it seems like it's the only way to get a credit history.

New twist though: car dealer says he can't sell us the car without a license from that specific state. Anyone dealt with this?

It does take time to get credit history.

One way to do it is to take smaller loans and paying them off immediately so interest doesn't hit you. Same with CC, always pay off the balance.

I'd also explore keeping a deposit in a CD or other financial mechanism in the lending bank such that you get a lower rate and some interest in your favor to reduce the difference.

If all fails, I would then suggest, like others, to get a used car from 2-3 years back; you can get substantial price differences depending on brand/make; but be aware of maintenance expenses. For example, a BMW, Audi, Mercedes (and most other European cars) drop significant in value after 3-4 years; because maintenance is quite hihg and people drop them as fast as they can.

On your question about license fom that state, I'm quite certain your salesperson mihgt be wrong. I've purchase enough car in various states to tell that that is not the case. In fact, there has been times in which I've chosen to take registration in a given state as oppose as the one I'm residing. That said, I have a home in that state so I can give that address. Once the veihcle moves to another state then I re-register.

[Mela17 36]

Car loans are not easy to get. The dealership that we went to racked up 15 (!) credit inquiries on my report before someone agreed to take the loan on. I have about 3 years of credit history and I also have made payments on time every month on all my cards AND we bought a used car and only financed 6.4k. Another thing of note is that they didn't want my husband on the loan because his social security card still said "Valid for work ONLY with DHS Authorization" We just got that fixed last week.

I don't know about the in state drivers license but I only had a learners permit and they still let me buy the car.