So you have never bought anything on credit. Also, there are no claims or outstanding bills against you. In that case, you may think that you have a good credit score. After all, there is no negative claim against you, right? You could be well within your rights to think that you are doing rather well when it comes to your credit score. Now, as bad as it sounds, this is not the truth. This probably implies that you do not have any credit score at all and in such cases, you may also have to go for cheap auto insurance with no credit check.
Things To Know Before Buying a Car Without Credit
The first thing that you need to do in this regard would be to go for a loan pre-approval as that would be your best bet at getting a good rate of interest on the repayment of the loan. Along with that, you must also look for insurers that offer direct auto insurance with no credit check policies. If you do not have a good credit score it could be hard for you to get pre-approval for a loan. Still, it would be worthwhile to shop around a bit and see if you can get any lender who would be willing to work with you.
In this context, you may also have to save money to make a big enough down payment on the loan. In fact, this could be applicable for no credit check auto insurance as well. This is because in situations such as these dealerships usually expect that you would do so for them. For that matter, they may also ask you to make as high as a 50% down payment on the value of the car that you are buying on loan. It is always a good idea in these cases to put down as much money as you are able to.
In the kind of credit situation that you are in you should expect a high APR (annual percentage rate) for paying the loan back. However, if you can get a cosigner for the loan the rates could come down. This is especially when the cosigner has a good credit record. In fact, in countries such as Canada, this rate can exceed 30% as well! This is because when you have no credit score you are essentially grouped together with people who have a bad credit record. However, you would have to work hard if you are looking for car insurance with suspended license.