What do you recommend I should do?

[zin9]

Since I don't have any credit, should I buy a brand new car or whould I buy a used one?
Because a friend of mine was telling me that there is a 0% interest rate when you buy a new car off the lot, and there is a 7%(ish) rate on used cars... He was saying that a lot of people recommend a younger driver who has no credit to buy a new car moreover then a used car...

What do you guys think?

 

[Kurt07]

Your friend is full of sh!t. You have to qualify for 0% interest rate on a new car. Not everyone gets that. You have to have damn near perfect credit history. Just because it is used, it doesn't mean you will get 7%. You will get whatever interest rate that your credit qualifies you for.

 

[zin9]

Alright I wasn't sure, I still don't fully understand the whole buying a new car thing and what it involves... I'm still driving the same car since i was 16 so I just wanted to see what other people thought I should do.

 

[andrew.savage]

Well, it's kind of hard to say. If you have a job that allows you to make payments, every month, and you are responsible enough to handle this, then sure, you can buy a new car. I wouldn't base the answer on whether or not you can get 7% interest rate, but rather if you think you are ready to take on the amount of responsibility to buy any car, new or used for that matter. My .02.

 

[tubebrner]

You need to read up or something. You're in over your head here. With no credit you'll have a really hard time trying to find someone to lend the kind of money required for a new car to you. I'd be surprised if you got any approvals, and if you did the interest rate would be really high. A used car loan would be easier to get for you, simply because less money is less risk to the lender. Also those 0% interest rates are incentives given to ramp up sales, and like Kurt said you need near perfect credit to get that. There's no way you'll get a rate like that on a MS3. I think the best you can do on a MS3 right now is around 5% with A+ credit. Credit unions generally give better interest rates than the dealers in my experience. That 7%ish figure is probably about right for a used car for someone with good credit and a short term loan <36 months.

 

[SuperStretch18]

Are you sure you have no credit? If you have a checking account with a debit card, or student loans or just about anything else in your name, you have some credit. You said you had a car, was the insurance bill in your name? Just make sure you're not second guessing yourself.

If you really have no credit, then you need to start working on that...

 

[Kurt07]

You need to read up or something. You're in over your head here. With no credit you'll have a really hard time trying to find someone to lend the kind of money required for a new car to you. I'd be surprised if you got any approvals, and if you did the interest rate would be really high. A used car loan would be easier to get for you, simply because less money is less risk to the lender. Also those 0% interest rates are incentives given to ramp up sales, and like Kurt said you need near perfect credit to get that. There's no way you'll get a rate like that on a MS3. I think the best you can do on a MS3 right now is around 5% with A+ credit. Credit unions generally give better interest rates than the dealers in my experience. That 7%ish figure is probably about right for a used car for someone with good credit and a short term loan <36 months.

Also the longer you have on a loan, the higher your interest rate is going to be. I know, it makes no sense, but that is how they do it. I know my interest rate on my MS3 went up 1 point just for going to a 6 year loan.

 

[zin9]

Alright I still have some things to learn it looks like. lol
Thanks for your help guys!