"How long should I build my credit before buying my first car at age 18? "
"I will be 18 in a few months and buying my first car. I have a great new car in mind, I have steady income, and I have saved about $15,000. Can I qualify for a loan as soon as I turn 18? Or should I get a credit card and build some credit first?
Answer provided by
Answered on May 05, 2021
“First of all, good for you for being so responsible at such a young age, working hard and saving your money.
In your situation, the smart thing to do would be to pay cash for a good used car and continue to save and/or invest the money that you would otherwise be putting into that new car. All the while, you can build your credit.
After driving the used car for about five years, you should have even more money saved up for a down payment. But you will not need all that money because you will have the old car to use as a trade in, and a good enough credit score to get a low monthly payment with very little down payment required.
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