Can you get a car loan at 18?
Can I get a car loan if I'm only 18 years old? I'm turning 18 next month and want to get a car. I'll need one when I go to college, but I can't afford a car without some help.
Finding a car loan at 18 can be tricky, but try not to worry! You should be able to get one without any issues if you find a cosigner with good credit.
Lenders use your credit score to determine whether or not you’re likely to pay off your debts. Unfortunately, this means that lenders view young people without credit histories as a high risk. A cosigner with a good credit score will assure lenders that they’ll still get their money if you can’t pay.
With a cosigner, banks and credit unions are a great place to look for loans. But if you can’t find a trusty cosigner, some lenders may work with students.
Before you sign a contract, consider the following:
- APR: The annual percentage rate is what you’ll pay in interest each year. Try to make sure it’s low.
- Term length: Longer loans can often lead to problems down the line. The shorter the term length, the better.
- Prepayment penalties: Some contracts ensure the lender gets paid interest by penalizing you for paying off the loan early.
- Down payment: In general, a larger down payment will get you better terms on your loan.
Remember, you’ll still need insurance before you drive your car off the lot. To make sure you’re getting the best rate on the coverage you need, try Jerry. A licensed broker, the Jerry app will help you find and compare quotes from over 50 top insurers for free. Users save nearly $900 a year on car insurance with Jerry—and it only takes a minute to sign up!
I hope you have a wonderful 18th birthday and enjoy your new car!
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