Here’s a good question from a young college student:
I am graduating college soon and I would like to lease or purchase a new car. I have a credit score of about 640 and a cosigner who’s credit score is 730. I don’t have a job yet, but I have enough money saved to cover my car payments for about 8-10 months, and I should have a job soon after graduation. Will I have any problems getting approved for a new car because I don’t have a job?
Here’s the answer and some more info:
Great news – you shouldn’t have any problem getting approved. You’ve got cash, you’ve got a strong co-signer, and you’ve got a brand new college degree. While it’s true you don’t have a job yet, it’s not going to keep you from getting a new car.
Most car manufacturers offer “first-time buyer” programs tailor-made for people like yourself. Usually, these programs require you to put 10% of the car’s price down and provide a copy of your diploma to qualify. These programs also require that you have a checking account, and that you don’t have any negative credit (like late payments, delinquent student loans, etc.).
You should also consider leasing a new car instead of buying one. First of all, you’re probably at a point in your life where your needs can change dramatically in the next two or three years. Today, you might want a nice little sports coupe. In two years you might need to trade that coupe in for a sedan (to support a new family). The point is that you never know how your life is going to change – the only certainty is that, when you’re young, it WILL change. So, instead of locking yourself into a new car loan for the next 5 or 6 years, consider a short term lease (24 or 36 months) and fairly inexpensive payment ($350 a month or less). That gets you into a reliable new car using a first time buyer program, and gives you the flexibility to switch it up later without too much trouble.
Make sure to read our questions you should ask yourself before leasing a new car, and do lots of new car research before you buy. Congratulations!