Financing a Car: How to buy a New Car without Credit History

Having a credit history can affect you especially when you want to finance a new car. A lot of conservative lenders for new car loans do not accept buyers without a credit history. It’s their way of verifying your financial resources and how you are able to pay your dues. On the other hand, there are some situations where a buyer can finance a new car without any credit history. If you are looking for a car shop that does not require a credit history, here’s the most basic steps to do:

1. Take time to go to car shops that do not require credit history.

With the emerging market of no-credit lenders, there are a lot of lenders today who particularly get in touch with no credit or bad credit at all. More knowledgeable lenders are accepting that there is a no-credit market and they are making efforts to cater this specific market type.

2. Present specific information about your status as a borrower.

As a borrower without credit history, adding more and specific information on your application to finance a car can open many opportunities to you. You can present assets and proof of income since there are lenders that will take assets as collateral. Additionally, you can also present your status as a student or military, because there are lenders who are offering car loans to students and concessions to a military member. These can be helpful to you in terms of negotiations.

3. Contact with particular car financing services.

In today’s market, there are some businesses that specialize in associating buyers of new car with lenders who will be supporting their credit status. If your car loan application has been rejected by some conservative lenders, then you can usually get help from since they often contact with third-party car loan lenders.

4. Think about informal lending agreements.

If the options above do not work for you to finance a car, then you can think about going to a private lending agreement with a small dealer or lender. That particular dealer can help you finance a car, but at a higher interest rate and a credit history is not needed. Even though this step is considered as a risky one, there are borrowers who still take this step. They just seek help from a cosigner to be able to assist your finances. In addition, the people involved in this kind of agreement should pledge to have full disclosure.