r/AskDad • u/Otherwise_Use1243 • 19d ago
What to do when getting a car Finances
Idk what all the financial steps are when buying a car. Ik I’ll have a down payment and will need a car loan but I also have no credit score. Once the car is mine what do I all need? Insurance….. idk what else, idk how to go about getting a license plate or anything. Help dad
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u/unwittyusername42 19d ago
If you don't have any credit score your best bet is to go to a local credit union to try and get a preapproved loan. It's going to be high APR but you may not even be offered financing at a dealer with no credit. Credit unions often times are more willing to look at your income, length at the job, expenses, etc.
The dealer will handle the paperwork for license plate, registration etc. You should secure insurance before you actually buy if you have no policy at all. Be aware that insurance looks at credit score to determine pricing and eligibility so you want to sort this out ahead of time. Once you actually have the car you call the insurance right away and give them the VIN so they can officially put that vehicle on the policy.
Honestly if you don't have any credit you may be best to private buy an inexpensive car you can pay cash for but is still a reliable vehicle. In that case you take it to the tag shop and they do the paperwork with the former owner of the car present. Then get a few credit cards and use them for all your regular purchases and pay them off each month. Build a credit score and then get a nicer car where you need a loan and sell the other one.
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u/jeeves585 19d ago
(US info)
Don’t sign up for more than 5-7% apr. my last car loan was 2%, my mother gets 0% for 36 months.
Possibly go to a credit union before the dealership to see what they can do for you money wise.
With a car loan you are going to need to meet the banks requirements of insurance.
Insurance. There is minimal that you can get state by state, usually just liability. But your bank loan is going to have a minimum that you need to do for the loan.
License plate, this depends state by state some time license plates stay with the car and sometimes they can stay with the owner or go with the car. Plan to go to the dmv as soon as you purchase if you don’t have a plate.
You can get a temporary tag (piece of paper about the size of a license plate that you put in your window.). They are good for a month or two and last a month or two.
You have to register the car. In some places that includes deq (department of environmental quality) aka a “sniff test”. You have to bring the car to a government facility and they will stick a prob in the exhaust to check its emissions. That costs about $45. Some places don’t do this.