Get Good Credit if You Want to Buy a Car
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17 Comments so far
leave a commentHow about you just buy a car you can afford… with CASH! Don’t FINANCE a DEPRECIATING asset. Think about how silly that sounds. Then, take what you’d normally pay towards that silly car payment each month and save it up. Then when you are ready for your next car, use THAT CASH to buy it. Novel idea! Thanks Dave Ramsey.
We just bought a car — using cash. No need to worry about monthly payments (except to ourselves), interest rates, or credit scores.
Automate your savings and, before you know it, you’ll have the cash too.
The other side of this is to just save and pay in cash. Once you start the process of paying for your car in cash, you typically don’t stop. Not only will you pay less in the long run, you will feel better knowing that you OWN it instead of PAYING for it.
I’ve been using creditkarma.com to monitor my score for free. It pings the credit institutions on a regular basis (but not often enough to affect the score) and it seems to do a great job.
@jason yeah, erm. that’s nice and all.
but most people have to drive to work to get that cash… to buy the car… that will allow them to … drive to work.
That is what automated savings is for. Instead of starting with paying for a full car, start by paying a larger and larger down payment. Eventually you will pay for it in cash. Once you do that, pay what you would for a car payment into a money market. At the end of 5 years, you could buy a better car with the trade in value plus the cash you saved. It is that easy if you are disciplined.
I don’t appreciate that Mint is collecting advertising money to guide its users to an ethically questionable company.
Check out http://consumerist.com/5064518/yet-another-reader-scammed-by-freecreditreportcom and http://www.consumeraffairs.com/news04/2008/01/freecredit.html for information on freecreditreport.com’s business practices.
I also have an issue with the link to FreeCreditReport being hidden behind a TinyURL so that it’s harder to see that users following it are being routed through DoubleClick.
Leases and purchase loans are simply 2 different methods of automobile financing. One finances the use of a car ; the other finances the purchase of a car. Each has its own benefits and drawbacks
Financeinformant.com
What Bryan said is a good point: AnnualCreditReport.com is the place you want to go for your legislatively-mandated annual free credit report…. and they’ll let you check your FICO score for just a couple dollars.
The other place? Not good.
If buying a high-end car that plan on taking for leisurely Sunday drives, then save up enough money to cover the total cost – if the Cars are not a necessity, why bother with a loan?
Regards,
Rose.
This article is BS, because It’s easier than ever to get a car loan. They can’t afford to have a surplus of cars sitting on their lot. Like the article said, the average American has a score of 3-700. What’s going to happen if they only hand out the loans to the people with credit scores of 700 and above? It’s not going make the economy better.
Actually, the average american credit score right now is below 600. In fact, I think about 85% of credit scores are below 600.
One thing with loans that many people realize is that if they creditor can, at any time, call the entire amount of the loan due for any reason. The best thing to do is to just pay for it in cash if at all possible.
Funny that the people saying ‘just save up and pay cash’ seem to miss the point that sometimes people need a car sooner rather than later. Thus the topic of this article.
I think the moral of the story here is just be informed. And know what options are best for you.
what if I have the cash, but want to increase my credit score to get a mortgage in the future? my credit report said that getting different types of credit will help me. (like a car loan). I could try to get a car loan for 0% interest.
Every four months get another credit report from a different one of the three reporting agencies at annualcreditreport.com
nutella makes a valuable point. Yes, paying in cash saves you making payments or a decision you cannot actually afford but those of us with shorter credit histories need things to add to that history.
Furthermore, if you do qualify for a low/0% rate on a car loan your money may be earning more interest than the loan is charging. Paying cash in that situation may cost you more because you aren’t earning any interest with it at all.