that you’re a poor risk to an auto lender. A substantial down payment—atleast 20 percent—will make your chances substantially better.
TIP: There are often first time programs for new car buyers.If you’re buying a new or Certified Pre-Owned (CPO) car, manymanufacturers offer first time borrower programs through their in-house, (^)
“captive” lenders. Read the fine print online or call and ask a financemanager at the dealer(s) you’re planning to visit what the stipulations are, (^)
both regarding your credit, and if you need to be a recent graduate or such.This will help you avoid wasting time if you wouldn’t qualify anyway. But
don’t let them pull your credit bureau or take any personal info.
COSIGNERS
A cosigner can make all the difference on getting a good interest rate on acar loan—or getting one at all. Cosigners can be a spouse, significant other (^)
or close relative. Lenders look much more closely at cosigners than theyused to before the meltdown, so they need to have good debt-to-income
ratios and high credit scores to be helpful. The cosigner is an equal in theeyes of lenders and credit reporting agencies, so a car loan affects their
DTI ratio too. And any late payments you make will affect Because of these factors, it is harder in my experience to get someone to their credit. (^)
cosign than it was a decade or more ago. Banks are especially leery of so-called “straw purchases” where there’s no stable relationship between the
cosigner and prime borrower.