Buy Own Car At 18 - Car Loans At 18 Years Old With No Credit

Although the minimum legal age to buy your own car is 18 years old, it is not easy to get a car loan for young drivers because of no credit history or income records. To buy a car for young adults, you need to lower you risk profile such that loan companies are willing to offer you a car loan at 18 years old with no credit.

Generally, you will be successful if you can provide a co-signer and a larger down payment especially if you are still a student and do not have full time employment. Nevertheless, by making regular on-time car loan installments every month, it is one of the best way to build a solid credit history and have easy access to personal financing such as credit cards, lines of credit, loans etc in future when you needed it the most. Hence, it is important you do not mess up your car loan at a young age.

More and more young adults are making money early while they are still schooling. Do not be surprised when they have a very respectable income record for over a year. This can be used for convincing the banks and credit union for an auto loan for 18 year olds.

When you apply at the bank for an automobile loan, you need to submit a credit application with your name and particulars, Social Security number, income records etc so that the loan officer can review your financial and credit status.

Besides a good income record, a clean credit history is often necessary as well to drive your own automobile. If you have been using a credit card for personal or business usage for some time, it will be sufficient as long as you do not have any late payment remarks. Otherwise, it may affect your chances of getting a bank car loan now.

A cosigner car loan for 18 year olds with no credit is the best option for buying a new car because of benefits such as easy approval at banks, cheaper rates, you save money in the long term. Your cosigner must have good credit scores, above 21 years old, have stable employment for over 2 years. He or she is generally your parents, older siblings or relatives and must be willing to take over your loan payments if you have financial difficulties. This can be a big risk because if you default on the auto loan, their credit scores will be affected.

Try to buy a cheaper car when you are only 18 years old with no credit. This will allow you to make a bigger down payment towards buying the vehicle and you have an easier time with future monthly installments. With lesser amount of money borrowed, the lenders are more likely to approve your application. This is because you will have more equity in the car from day 1 and are less likely to default. They can also claim back more money from repossessing the vehicle in the event that you cannot pay up.

If you are still turned down for a car loan, just keep building your credit history and save more money for a larger down payment. In a few months, you can try again with increased chances of buying your own car. Avoid any late payments or you will have problems convincing banks and lenders that you can really afford your own car at 18 years old.

There are also more and more automobile dealerships and banks offering a first time car buyer discount program on some conditions. For example, only new cars are allowed and the MSRP must be under $12,000. You usually need to pay a down payment of around 10% depending on your credit score.

If you do not want a auto loan cosigner, it will be quite difficult to buy a car at your young age even though your earnings can justify the purchase. This is just the way lenders work at the moment, because most 18 year olds have no income and no credit history and are just deem as high risk borrowers and drivers.

Another problem with getting a no credit check car loan for 18 year olds is that the interest rates will be several percentage points higher compared to using a cosigner. You will probably have to pay 20% APR or more, and for a new $12000 car loan over 60 months, this means a monthly installment of $530.

If you are willing to buy a cheaper or used car for under $2000, you may not even need a car loan as you can pay full in cash from your bank savings. There are other expenses related to owning a car which you may not have foreseen, such as maintenance, new accessories, auto insurance, extended car warranties etc. It is better to get a smaller car loan for 18 year olds with no credit and keep some spare money for emergencies.