Can You Buy a Car…?

Can you buy a car with bad credit?

Yes, but, obviously it’s not as easy as with good credit. The process for buying a car with bad credit is the same as any other purchase – if you have money and meet qualifications, you can buy a car. However people who have poor credit history may find that their options are limited and they will come across many roadblocks along the way.

Econo Auto Sales in Denver specializes in financing good people with bad credit. All it takes is a driver’s license, proof of residence, proof of income, full-coverage insurance (insurance is mandated by the state), and of course, your down payment. We don’t check your credit, unless you apply for outside financing.

Tips for buying a car with bad credit:

Another way to deal with bad credit is to use your family members’ credit history to get financing through the dealership.

If you have an established relationship with someone who has good or excellent credit, they could co-sign on your application and provide their own income information in order to finance your purchase.

Even if it’s your spouse, parents or siblings who are willing to co-sign on your application, you’ll likely find it easier to get approved for financing because of their good credit.

Where can you buy a car with bad credit?

The easiest place to buy is at a buy here pay here dealer because they specialize in providing financing for people who have bad credit or other credit issues.

Of course, you can also buy with cash from a car dealer or private party.

Can you buy a car with no credit?

Some car dealerships will not allow you to buy a car if you don’t have some kind of credit. You can still check with your local dealership or look around online to see what options are available for people without any credit history though. Many used cars can be picked up that way and many companies specialize in helping those who need it most.

Buy here pay here dealers can come to the rescue here too, as long as you meet the other requirements, having zero credit isn’t usually a problem.

…with a credit card?

Yes, you can buy a car with a credit card. Credit cards are sometimes used to pay for large purchases like cars instead of cash because it allows the buyer time to make payments on their purchase before interest is charged.

Another benefit is it gives them the opportunity to establish or rebuild good credit over time by making regular monthly payments. But remember that your credit card limit is only a small part of the total amount you can borrow for your car purchase.

A common misconception about buying a car with a credit card is that it automatically ensures approval. In many cases this will be true, but there are also times when buyers find themselves declined even though they’ve been using their cards for years and have no problems paying their bills on time.

If you are planning to use a credit card to finance the purchase of your car, it’s best that you apply for financing through the dealership before making any charges or payments with your credit card. This will ensure that even if there is an issue in regards to approval, you’re still able to buy your new car.

…with a debit card?

Yes, you can buy a car with a debit card. But not all dealerships will accept this form of payment. Make sure to ask before you waste your time.

On the plus side, if you purchase a vehicle using your debit card, then this will not affect your credit score because debit cards are limited to the amount that is in your account.

Can you buy a car with cash?

If you buy a vehicle using only cash (no financing or loans), then it won’t affect your credit score either way because these transactions don’t show up on credit reports unless they’re used as collateral for financing elsewhere. However, bear in mind that even though making large purchases like these doesn’t appear on your report(s) directly, it can still impact your credit score indirectly.

If you’re the type of person who only makes large purchases like cars with cash, then lenders may take this as a sign that you are having trouble managing money and/or paying off loans on time, which is why they will most likely deny any requests for new lines of credit or increases to existing ones even if you have an excellent payment history in every other area of your life.

So when buying a car with cash, make sure that all previous payments have been made successfully before applying for anything else.

…with zero down payment?

Yes, many dealerships and car manufacturers offer zero-down financing. But it’s almost always for people with stellar credit. You’ll see “W.A.C” in the fine print, which stands for “With Approved Credit”.

Another thing to consider is that you’ll have higher monthly payments and will pay more interest over time, so a larger down payment reduces the risk for the lender and the buyer by making the payments easier to handle.

Can you buy a car with no proof of income?

There are a few ways to buy a car without proof of income. One way is to pay for it all with cash. This is easy because you don’t need to find someone who will lend you the money or find something to be used as collateral. You just pay the cash, sign the paperwork, and drive away.

Another way is to trade-in a vehicle (or something else) with a high enough value – typically close to or exceeding the value of the vehicle – that the dealership is willing to accept. Keep in mind that you’ll also have to provide proof of ownership for the property that you want to trade-in. This would include, automotive titles, real estate deeds, account statements, etc.

If you do not have any type of income source then it will be difficult to get financing approved because no one can guarantee that this money will be there every month to make the monthly payments.

…with no job?

Well it depends on the bank and your current situation. Banks and other auto lenders want to get all their money back plus interest, so they need reasonable assurances that the buyer can afford to make the payments. Not having a job isn’t necessarily a deal killer as long as you have other sources of income. So don’t forget about other things like Social Security, alimony or pension funds.

Even if you have alternative sources of money and good credit, you may still be unable to obtain a vehicle loan if you’re unemployed. In that scenario, a co-signer with steady income might improve your odds of getting approved for a car loan.

However, as mentioned in a previous question, you can still buy a car with cash or by trading in something that is valuable enough that the car dealer is willing to make the trade.

Can you use unemployment checks as a source of income?

No, unemployment checks are not considered a reliable source of income when applying for car loans. By definition, this income is temporary.

However, you can use VA benefits or disability payments if you have these types of income to show the bank that you will be able to reliably make your monthly payment each month.

Can you buy a car without a driver’s license?

You can easily buy a car with cash if you have no driver’s license. But car dealers have to abide by state laws, so the situation is more complicated, especially regarding financing, registration and insurance.

There are a number of reasons someone might want to buy a car when he or she has no driver’s license:

  1. You have a learner’s permit and will have your driver’s license soon.
  2. You want to buy a vehicle for someone else, e.g., a caregiver, as a gift to a loved one, you’re disabled and won’t be the primary driver, etc.
  3. You own a business and an employee will be driving the vehicle.
  4. You’re a collector and will keep the vehicle in storage.

So, yes, you can buy a car without a driver’s license, but to buy from a dealer, you’ll have to provide an alternate form of ID.

In many states, including Colorado, you will also need insurance to drive the vehicle off a dealer’s lot. This can be tricky, because some insurance companies won’t insure you if you’re not the primary driver. You may need to shop around for a company that will.

How about with a learner’s permit?

If you’re buying with cash, yes you can buy it, title it and insure it. But you won’t be able to register it and get license plates, so that will prevent you from legally driving it until you have obtained your driver’s license.

…with an expired license?

You can finance a car through a car dealer or buy with cash. As long as you can get insurance, you can still buy a car with an expired license.

…if you’re license is suspended?

Yes, you can still buy a car but you won’t be able to get license plates – or even drive it off the lot – until you obtain insurance.

And in most states, Colorado included, auto insurance coverage is required by law, and you must provide proof to register your vehicle.

If your driver’s license is suspended, it may be hard to get auto insurance because insurers will not offer coverage if you are not able to drive or if you drive even though your license is suspended. If you get car insurance later, your rates may also increase a lot.

…if my license is suspended in another state?

Yes, but not from a dealership and only if your license is valid. You will need to provide proof of insurance when registering the car at your local DMV office or Department of Revenue (DOR) anyway. So you won’t be able to drive it off the lot unless you get insurance first. And getting insured may be difficult because insurers will not offer coverage if you are unable to drive or don’t have a valid driver’s license.

Can you buy a car at 17?

Not typically. You can’t legally enter into a contract until you reach the age of 18, which is considered adulthood. So a parent of legal guardian will need to be a part of the sales contract.

Although there are many states where you can buy a car at age 17, not all of them have dealer-friendly laws that will allow the transaction to be processed without you being an adult and able to provide proof of insurance.

To buy with cash in Colorado, for example, you must be at least 18 years old and present valid proof of insurance.

In other states, the age requirement is different and varies depending on whether you buy from a dealer or private party.

But there is an exception to this. If you are emancipated, you are free to buy, register, and insure a vehicle in your name. To be emancipated means that you’re freed from the control of your parents or guardian(s) and they, in turn, are freed from their responsibility of taking care of you.

How about if I have an adult co-signer?

Yes, in fact this scenario may be necessary for young buyers who don’t have credit yet but want to buy their first vehicle at age 17. The co-signer will need to have a good credit score (over 700) and income that can cover the monthly car payments, in case of default.

Can you buy a car without insurance?

Not if you buy from a dealership. They are required by law to verify insurance coverage on any vehicles they sell.

You can purchase a vehicle from a private party and avoid buying insurance, but you will need to provide proof of insurance when registering the car at your local DMV office anyway. So, one way or another, you’ll need to buy insurance in Colorado.

Can I buy a car without a title?

Yes, you can buy a car without a title, but only if the seller doesn’t have one because it was lost or destroyed. Otherwise, it’s illegal to buy or sell a vehicle without a title in Colorado and other states.

It’s very risky because the person who holds the title in their name can claim ownership of the vehicle, even if you’ve paid for it.

Can you buy a car for someone else?

Yes, you can buy a car for someone else with the same requirements as buying one for yourself.

Can I buy a car while refinancing my house?

Yes, you can buy a car while refinancing your house.

The problems arise in the days before the loan closes. If your credit report shows that your debt to income ratio has changed, it could negatively affect your ability to close the mortgage loan.

The other problem involves inquiries on your credit report. If the lender sees that you’ve made inquiries for more credit, that could also negatively impact your ability to close on the loan.

But there are three things you can do:

  1. Wait until after you refinance.
  2. Buy with cash – although this could lower the amounts that you have in bank accounts, which will also alter your financial profile in the lender’s eyes.
  3. Buy a car without having your credit checked. How do you do that? By buying your vehicle through a buy here pay here dealer that won’t check your credit. Since they don’t check your credit, the credit bureaus won’t log any inquiries.

Can I buy a car with an adult co-signer?

Yes, you can buy a car with an adult co-signer.

The requirements are the same as for anyone else who wants to buy a vehicle in Colorado. You need valid proof of insurance and either be 18 years old or emancipated from your parents/guardian(s).

You also must have enough income to cover the monthly car payments if the co-signer defaults.

Can I buy a car before buying a house?

Yes, you can buy a car before buying a house.

If you are in the market for a new car, it may be tempting to buy one first before buying a house. However, there are a few reasons not to do this.

One of the most common reasons is that you would need to qualify for a car loan and wait for it to be approved. This could result in your credit score taking a hit in the meantime. And it would change the income/debt ratios that your home loan would be based upon.

You could bypass the credit check by buying from a buy here pay here dealer, however, when you sign the papers to buy the house, you have to certify that your financial situation hasn’t changed recently. If you sign that after buying a vehicle on credit, you would be at risk of committing fraud.

Can I buy a car after buying a house?

Yes, you can definitely buy a car after buying a house and there are no restrictions on when to do it. However, the same cautions apply as above with regards to financing, particularly the debt to income ratio that a dealer or auto lender will look at.

Can I buy a car during chapter 7 bankruptcy?

The bankruptcy court will review your proposed purchase of a vehicle to make sure that it is in good faith and does not violate any provision of the Code. If you are considering purchasing an automobile during Chapter 7 or 13, be aware that if you fail to obtain prior permission from the trustee, you could lose all rights to the property. 

Can I buy a car on Sunday?

Yes, as long as you’re buying from a private party. But if you want to buy a car from a dealer, you can’t. By law, auto dealers are closed on Sunday in Colorado, Oklahoma, Minnesota, Wisconsin, Iowa, Illinois, Missouri, Indiana, Louisiana, Mississippi, Pennsylvania, New Jersey and Maine.

Can I buy a car from the manufacturer?

No, you cannot buy a car from most automobile manufacturers. With most manufacturers you must buy from an authorized dealer or if your state allows direct sales of new cars (such as Tesla), then it is possible to buy a car straight from the source.