Can I Buy a Car Without a Credit Score?

Whether you have no established credit history or have only recently begun establishing a line of credit, it can be frustrating trying to buy a vehicle. Getting approved for an auto loan or financing plan can be extremely difficult if you do not have a solid credit history. However, there are several different ways you can purchase a car without a credit score.

Pay Cash

If you can afford purchasing your car in cash, you will not need to possess a credit score. Purchasing a car with cash will eliminate a monthly car payment and will only require you to hold a liability policy on your auto insurance. The downside to paying cash for your car is that you will not be able to build credit like you would when financing a car through a dealership or making payment toward an auto loan through a financial institution. You can pay cash for a car when buying from either a dealership or a private seller.

Use a Cosigner

A valid cosigner may be required for you to finance a car or take out a private loan. A cosigner may be any friend, family member or acquaintance with qualifying credit. A cosigner will sign the same agreement as you and will agree to take on the financial responsibility of the loan should you happen to default. Using a cosigner enables you to purchase a newer or more expensive car, or a car that you can simply not afford to pay for in full. It is important to note, however, that if you make late payments or neglect to make payments on your car, the credit of your cosigner will suffer along with yours.

Utilize a Large Down Payment

Putting down a considerable upfront payment toward your new vehicle can help you buy a car without a credit history. A large cash down payment may offset the risks associated with selling to a buyer without credit in the eyes of some sellers. Speak with the seller or dealer about your options regarding financing, under the condition you pay a certain percentage of the cost upfront in cash.

Considerations

Before deciding which route to take when buying your car, it is essential you take a long, hard look at your finances. Make sure you can realistically afford to buy the car you are interested in to avoid hurting your credit score before you even get a chance to develop a solid history. Buying a car that you cannot afford and then missing payments will have a negative effect on your credit.