Financing | Auburn, WA
First-Time Car Buyer and No-Credit Car Loans in Auburn, WA
Buying your first car on credit? If you have never had an auto loan, your credit report may be short or even empty, which is a different situation from bad credit. At Bud Clary Auburn Hyundai, our finance office sends your application out to our lending partners, and those lenders make the credit decision. Here is how a first car loan can help build a credit history when the lender reports it, how to settle on a payment you can carry, and the insurance bill to plan for before you sign.
- The lenderMakes the credit decision, not the dealership
- Free, weeklyYour credit reports through AnnualCreditReport.com
- 25/50/10Washington's minimum liability limits, in thousands
- 7 daysSales open Monday to Saturday 8:30 to 8, Sunday 10 to 6
Thin credit, no credit and bad credit
A thin credit file has little on it yet, perhaps one credit card or a student loan. Bad credit means there is a history and some of it is negative, such as late payments or accounts sent to collections. Either one can make a loan harder to get, but a first-time buyer usually has less to explain and more to show.
With only a short record to review, a lender weighs the rest of the picture. The CFPB says lenders generally weigh your credit history and scores, what you earn against what you already owe, the loan amount and its length, the size of your down payment, and whether the vehicle is new or pre-owned (CFPB).
Pay from a part-time job, pension income or another retirement benefit cannot be discounted for that reason under Regulation B of the Equal Credit Opportunity Act (12 CFR 1002.6). Social Security, other benefits and self-employment income you can document may count too. The lender decides how much of it counts.
How your first auto loan builds credit
When a lender reports your payments to the three nationwide credit reporting companies, every on-time payment becomes part of your credit file. The CFPB's advice for anyone starting out is to pay on time, every time (CFPB). Ask your finance manager whether the lender on your contract reports to all three.
A year of on-time car payments gives your next lender something to review that does not exist today. A missed payment works the other way, so set the loan up to be easy to pay.
- Set up automatic payments from the account your paycheck lands in
- Ask for a due date a few days after payday
- If money gets tight, call the lender before the due date, not after it
- Check your credit reports, free every week through AnnualCreditReport.com (FTC)
Choose a payment you can carry
Start with the full monthly cost of owning the car, not the loan payment alone. The CFPB names the pieces that drive that cost: the interest charged, taxes and fees, any optional add-ons, and insurance and upkeep (CFPB). Add fuel, then leave room for tires and the yearly registration renewal.
Stretching a loan over more months shrinks the payment but usually grows the total. The FTC warns that a longer loan can lower the monthly payment yet may carry a high rate, and that the longer the loan, the more the deal costs overall (FTC).
Ask us for the out-the-door price in writing so you can compare it line by line. A negotiable documentary service fee of up to $200 may be added to the sale price.
A lower price is the simplest way to a lower payment. Browse used vehicles under $20,000 or Hyundai Certified Pre-Owned inventory, and if you have an older car to trade, value your trade first: in Washington, a trade-in lowers the taxable price of your next vehicle. Every used vehicle from Bud Clary comes with:
- A 117-point inspection and a free CARFAX report
- A 3-month / 3,000-mile limited warranty
- A 3-day / 300-mile exchange if the car turns out to be the wrong fit
- Two oil changes and two tire rotations
Budget for insurance before you pick the car
Washington requires liability insurance on any car you drive, and a lender will ask for more on a financed one. Insurers here can price your policy on your age, driving experience and record, where you keep the car and the make, model and year of the vehicle itself (OIC), so two cars with similar prices can carry very different premiums. Get a quote on the exact vehicle before you sign.
| Coverage | Who asks for it | What it pays for |
|---|---|---|
| Liability | Washington law, at minimum $25,000 for injury to one person, $50,000 for all injured people and $10,000 for property damage | Injuries and damage you cause to other people |
| Collision | Most lenders, on a financed car | Damage to your car when it hits another car or an object, or rolls over |
| Comprehensive | Most lenders, on a financed car | Damage that is not from a collision, such as a fallen tree or vandalism |
| Gap | Optional | What you still owe on the loan if the car is totaled and the insurance payout falls short |
Sources: Washington Office of the Insurance Commissioner on required liability limits and on lender requirements and gap coverage. If you let required coverage lapse, the lender can buy a policy to protect its interest and charge you for it.
Documents for your first car loan
Lenders each keep their own document list, so your finance manager will tell you if yours needs anything extra, such as personal references.
- Your driver's license
- Income proof: your latest pay stubs, or recent tax returns and bank statements if you work for yourself, plus award letters for Social Security or other benefits
- Something showing your current address, for example a power or water bill or a rental agreement in your name
- Your insurance agent's contact details, or a policy you can add the car to
- Your down payment, and the title or payoff details for any trade-in
- The same documents for anyone applying with you
How dealer financing works here
You fill out one credit application, online or at the store. Our finance office passes it along to one or more lenders, the arrangement the CFPB calls dealer-arranged financing (CFPB). Each lender reviews it and decides whether to lend and on what terms. Bud Clary does not make that call.
When you sign, the contract is usually with the dealership, which then sells it to a lender, such as a bank, credit union or finance company, that services the loan and collects your payments (FTC). You can also line up your own loan with a bank or credit union and bring it in. All credit types are welcome here, and we work with credit unions as well as other lenders.
Submitting the application lets lenders check your credit. The CFPB suggests bunching loan-shopping inquiries into a stretch of 14 to 45 days, and notes that a dealer may reach out to roughly five lenders, so plan to finish your car shopping within a few weeks (CFPB).
No credit history at all? A parent or other co-signer with an established credit record could make the difference. The FTC points out that a co-signer takes equal responsibility for the contract and must pay if you miss payments (FTC).
Finishing college? Hyundai's College Grad Program adds a bonus for recent graduates who finance or lease a new Hyundai through Hyundai Motor Finance, with proof of graduation and employment and no adverse credit history. The rules are on our College Grad Program page.
Start your application
Fill it out online at your own pace, then call us or stop in at 2807 Auburn Way N. Sales hours run 8:30 AM to 8:00 PM Monday through Saturday and 10:00 AM to 6:00 PM on Sunday.
Visit Bud Clary Auburn Hyundai
Bud Clary Auburn Hyundai2807 Auburn Wy N
Auburn, WA 98002
Sales
- Mon - Sat
- 8:30 AM - 8:00 PM
- Sunday
- 10:00 AM - 6:00 PM
Service
- Mon - Fri
- 7:30 AM - 6:00 PM
- Sat - Sun
- Closed
Frequently asked questions
Can a first-time buyer get a car loan with no credit history?
That depends on the lender. With little history to review, lenders look harder at what you earn, what you already owe, how much you put down and which car you pick. A co-signer whose credit is already established can help. The lender, not the dealership, makes the decision.
Do first-time car buyers need a co-signer?
Only some do. According to the FTC, a buyer with a short or weak credit record may need one. A co-signer takes on equal responsibility for the loan and has to pay if you do not, so ask only someone who understands that.
How much car can I afford as a first-time buyer?
Add up the full monthly cost: the loan payment, insurance, fuel, maintenance and registration. Get the out-the-door price in writing, and keep in mind that a longer loan lowers the payment but usually raises the total you pay.
Can I buy a car without insurance?
Plan on having insurance in place before you drive away. Washington requires liability coverage on any car you drive, and most lenders require collision and comprehensive coverage on a financed car. Get a quote on the specific vehicle before you sign.
Will applying for a car loan hurt my credit?
Applying lets lenders check your credit, which records an inquiry. To limit the effect on your scores, the CFPB recommends doing all of your auto loan shopping inside a 14 to 45 day window.
Is there a first-time car buyer program at Hyundai?
Hyundai's College Grad Program is built for new graduates. It adds a bonus when a recent grad finances or leases a new Hyundai through Hyundai Motor Finance, with proof of graduation and employment and no adverse credit history. See our College Grad Program page for the rules.