How to Buy a Car (Without Credit)
- 1). Save. If you don't have the credit to get a car loan, you may have to pay cash if you want to buy a car. As with most other purchases in your life, the best way to accomplish this is to save. If you already have savings, you can tap into your savings or investment accounts to pay cash for your car. If you don't yet have the savings, you may have to postpone the purchase of your vehicle until you have enough money.
- 2). Negotiate. If you have bad or no credit, don't tell the dealer this upfront. Also, don't try to get a lower price by suggesting you will pay cash upfront. Try to negotiate a lower price without resorting to your means of paying for the car. Although it may seem counterintuitive, most dealers would prefer if you didn't pay with cash, but rather financed your car so they can make money on your interest payments. Work hard to negotiate a lower price before you let the dealer know you will be paying in cash.
- 3). Tap the value in your existing car. If you can't get financing or pay for your car with savings, see how much value you can get out of selling or trading-in your existing car. Usually, you can get more for your vehicle by selling it to a third party, but you still may be able to get a good deal by trading in your car directly to the dealer, particularly if you have an in-demand car. If your existing car is worth enough, you won't have to pay anything for your new car
- 4). Work out a payment plan with the dealer. If you don't have the credit to get a traditional car loan, you may be able to work out a private arrangement directly with the car dealer. This is generally more likely if you are willing to pay off the entire amount of the vehicle in a relatively short time, or if you deal directly with the owner of a small or independent dealership.
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