I have no money. Tell me how to get a car loan!

I have no money. Tell me how to get a car loan!

17 March 2022 Concept Car

You don’t have any money but you want to buy a car? Some might say that’s an impossible mission. Whatever you want to call it: It’s ambitious.

After all: It goes without saying that you can not buy anything without paying for it. And last time we checked, banks were no cheritable institutions.

We know that you know this. So if you’re asking this question, we assume you believe it can be done regardless.

And you just might be right! With endless experience in car finance to our credit, we’ve helped many UK drivers who thought they could never ever get a vehicle.

Can we help you, too? Read on to find out.

There are hundreds of online articles with answers to the question …

… the only thing is: As soon as you start looking more closely, you quickly realise that these are not really solutions.

Some of it in fact, is outright silly.

Here are some of the supposed solutions to how you can buy a car without money – and why we think they don’t work:

  • Don’t make a downpayment (but pay for the loan, how?)
  • Get a job or take care of chores in the neighbourhood (as in … washing cars by hand?)
  • Look at alternative finance options (if no bank is going to lend to you, neither will credit unions)
  • Check the subprime market (isn’t that where you were already looking anyway?)
  • Use car decals to pay off the loan (these are ad displays on your car … very few lenders will accept this and it doesn’t pay nearly as well as some will make you believe)
  • Save up money first (what with?)

If you’re serious about getting a credit without cash, it’s going to take more than these ideas.

Let’s approach this a bit more systematically.

When you say that you don’t have any money, but would like to buy a car, this doesn’t completely explain your situation. Essentially, there are three different scenarios. And each one requires a different strategy:

  • You don’t have a job, but you do have some savings.
  • You have a low income, but no savings.
  • In a worst case scenario, you don’t have any money at all.

Let’s take a closer look at each of these to find out how best to approach the situation.

You don't have any money at all. - Concept Car CreditScenario 1: You don’t have any money at all.

Okay, so you have neither any savings nor any income. This would also assume you don’t have any securities to speak of. If you did, you could simply sell those off instead of reading this article.

You need to keep the following in mind: Even if you could get a car, how would you pay for it? The cost of insurance, petrol, road tax, and the occasional maintenance visit at your garage make this a pretty challenging wish to come true.

Naturally, you will receive some sort of benefit payments. But no lender will agree to set up a loan based purely on those. And the fact that you don’t have any savings means that even if they did, the risk of a default would be far too high.

A co-signer might work. But:

If you really need a car without any money at all, the only realistic strategy is as follows:

  • Pick the cheapest car you can find that will satisfy your needs.
  • Borrow the entire sum you need from friends and family.
  • Pay for the car in cash.

Many people dislike borrowing from family. That makes sense. But in this particular case, it has many advantages. If you really keep the purchasing price down, the plan might just work.

Scenario 2: You don’t have a job or an income, but some savings

For a lender, savings are not ideal, but they’re not too bad either. Of course, any bank or dealer would prefer it if you actually had some money coming to you at the end of the month. On the other hand, the money you have on your accounts is (relatively) secure. Which means they have something they can rely on.

On top of your savings, you should also be getting an income through your benefits. Without any savings, this might not be of interest. But the combination is a lot more attractive, since you’ll use the savings to pay off the loan, and the benefits to pay for your daily requirements.

So, this situation isn’t as desperate as you might think.

Here are a few key points you should take into consideration:

  • If your savings are very low, consider asking friends and family for a little help, similar to scenario 1.
  • Sell off as much stuff as you can. Even small amounts can make the difference between a positive response or a rejection.
  • Reduce your monthly payments to the absolute minimum. Lenders need to be convinced you’ll be able to cover for all your costs using just the benefit payments. They would not want you touching those bank accounts.
  • Apply for jobs now. Even if your chances are not very high, making the effort gives an important sign to the lender.
  • In this case, we advise against making a down payment. Why? Because you don’t want to keep your savings as high as possible. You may still get a job in the future or manage to get money some other way. But until then, your deposits are all you have.

You don't have any savings but you're on a low income - Concept Car Credit
Scenario 3: You don’t have any savings but you’re on a low income

This is the most likely situation for many UK households. Often, this scenario will also include a bad credit rating, which can also make it harder to get a good deal.

For us, this is the situation where we can most likely assist you. Since you’re on an income, there is still money coming in. You’ll probably need most of it to pay for your expenses. But as long as there’s a tiny cushion there, we can more often than not make it work.

Your credit rating will usually not be of interest to us. From our point of view, whatever happened in the past is usually not particularly relevant to the present.

The decisive number is the relationship between your income and your outgoings. The higher this ratio, the more disposable income you have, the more realistic it is to get a loan. This is why reducing payments and cancelling all non-mandatory recurring payments is a powerful step towards a loan.

Here are a few key points you should take into consideration:

  • Really do the maths. Will you be able to afford not just the loan repayments, but petrol, insurance and road tax as well?
  • Create at least a little nest egg. One way would be to put aside your hypothetical loan payments for three months. You can use this money either as a safety cushion or to …
  • … make a down payment. Although this isn’t mandatory usually, it can help you pay the loan off faster, and get a better interest rate.
  • Keep monthly payments as low as possible. This isn’t a popular opinion, but an entirely rational and sensible one: On a low income, any expense is going to hurt your cash flow. Low payments may be more expensive – but they are also safer.
  • Here, too, the more you can reduce your monthly payments, the better.

Car finance at CCC

At Concept, we love challenges. So if you come to us with no money but the desire to buy a car, we’ll do everything in our power to make it work.

As we’ve outlined above, solutions depend on your current situation. So give us a call and talk to us, so we can come up with a plan that matches your financial capacities.

Get in touch, we really look forward to hearing from you!

Reach us by phone at 800 093 3385. Or use our contact form for a first offer.

17 March 2022 Concept Car