@CreditKick wrote:Working on first vehicle for my 18 yr old stepson with no credit history. The prices on the vehicle he wants are very close for new and nearly new. Does anyone have an idea if he would more likely be approved for a new car loan or a used car loan? Thanks in advance.
It would be best to find a slightly used car, with low miles, that falls under manufacturer warranty. Some data points that I recently experienced while helping my 18yo neice buy her first car on her own... She is 18, as mentioned. She has had a Cap1 secured card for about 2-3 months, pays it off faithfully, however... she hasn't had it long enough to report. So, she has NO CREDIT score! She has a strong work history predating her graduation until now. She is smart, and took our advise on how to shop for a low mileage, and low insurance cost vehicle.
She was approved by a well respected local finance company in Michigan called Alley bank. They do tend to be one of the more forgiving lenders in regards to sub prime and first time buyers. Nevertheless, she was approved for a $20k cute little ride at 18.5% with $3k down. She did do some lot shopping and rate comparisons at a couple of different lots, and was also approved by some podunk out of state outfits @24.99 (highest in our state by law), but she was smart and didn't take the first opportunity.
With that being said... I know they sales person always says: "pay it on time for a year and refi at a lower rate". In her particular case, I am quite confident if she keeps a good relationship with CAP1, they'll shave a few points at a minimum for her next year. Her payments are just over $300 monthly on a 2021 Chevy Trax with just under 40k miles.
Starting Score: 547EX