FAQ for first-time buyers
What if I have no credit history at all?
No credit? No problem. In fact, having no credit can actually make you a more attractive buyer than if you had things like late payments or collections in your history. First-time buyers with no credit history are known in the industry as “ghosts.” All American Motors has a number of excellent financing sources for servicing “ghosts.”
How long do I need to be working at my current job to qualify?
The short answer is 6 months. Having less than 6 months at your current job, however, is NOT a deal breaker. There are a number of exceptions to the 6-month rule-of-thumb, particularly if you have prior work history in the same field.
What about a down payment?
This varies for first-time buyers. For example, if you have no credit history, 10% of the sale price is a fair place to start for your down payment.
If you’re a first-time buyer with established credit from other sources (for example, a credit card), your down payment can potentially be as low as $0. This all depends on how high your credit score is and the length of time and number of “trade lines” in your history.
Can I use my trade-in vehicle as my down payment?
Absolutely. In fact, most people financing a vehicle for the first time do this. Not only can your trade-in help satisfy your down payment requirements, but it also provides a significant sales tax savings in the state of Washington.
What car loan amount can I get approved for?
Your income and personal expenses determine the amount banks are willing to finance for you. For a ballpark figure, multiply your gross monthly income by the number 6 and that’s approximately the maximum amount of the car loan you can expect.
For example, if you work full-time for $14/hour, your gross monthly income is about $2,400. In this case, vehicles priced around $12,000 or lower make sense for you. Note: Many 1st time buyer programs cap out at $15,000, so we keep a large stock of newer year vehicles in the $8,000-$13,000 range.
Remember: lenders also look at your other expenses to determine whether or not you’re likely to be able to afford a car payment. It’s one of our goals to help first-time buyers make sure their car payment makes sense in the face of their other expenses.
Is there a minimum income to qualify?
In general, $1,600 per month is the minimum income required for a car loan. However, many lenders will finance first-time buyers who have a parent or spouse — who bring additional income or positive credit — to co-sign the loan.
What if I’m active duty military?
We have financing for E-1 and up. For active duty military, we have all the same lenders available for regular first-time buyers, as well as a number of additional special options only available to service men and women. Military customers are also eligible for special first-time buyer programs for those with less-than-perfect credit. Plus, we’re happy to pick you up on base and let you test drive to the dealership if you need a ride!
Can I protect my investment with a warranty?
Yes, and it is the most important advice we give our first-time buyers. If you’re like most first-time buyers, you’re a young adult with a budget that would be hit hard if your vehicle ever required any type of major repair.
Our lenders allow you to include a comprehensive warranty in your monthly payment. These warranties are customizable in duration and levels of coverage depending on what suits your needs best.
Over 95% of our first-time buyers also include GAP coverage in their payment to insure they will have to pay zero out of pocket — regardless of what they owe on the vehicle —if their vehicle is ever totaled during the entire term of their loan.
What if I don’t meet all the 'requirements' for a loan?
Even if you have less than 6 months on your current job, or a late payment or collection on your record, we can still help you repair your credit by financing your first vehicle.
If you fall into this category, expect to bring a bigger down payment to help you qualify. The amount that banks will lend to first-time buyers who have bad credit is lower than for those with good credit. Investing more money down can make all the difference.
I’ve never had car insurance. What can I expect?
Although the actual minimum coverages vary from lender to lender, every auto lender requires buyers to secure auto insurance as a condition of your loan. If you’ve never had auto insurance before, no worries. As part of our service, we offer a wide variety of carrier options, help you find the cheapest rates available, and assist in the proper set-up your auto policy.
I want to leave the dealership in a car. What should I bring?
Ready to finance your first vehicle? Congratulations! Here’s what you need to bring: Valid driver’s license, insurance, proof of residence (cable/utility/phone bill or bank statements), proof of income (paystubs), and up to 6 references from family, friends, and coworkers. These items may vary from lender to lender, so our team will let you know exactly what’s required.
What’s the best place to start the car-buying process?
If you’re like most customers, you’ll want the comfort of knowing you’re approved for a car loan before coming to the dealership. To get pre-approved, simply fill out our secure online credit application. Once you’re pre-approved, you’ll see exactly which cars you can afford based on your specific budget picture.
Can I finance through my own bank?
Yes! All American Motors is a certified CUDL dealer, meaning we can do auto loans for existing members of nearly every credit union in Washington State. We’re also a Wells Fargo and Ally Financial dealer, making 2 of the nation’s largest auto lenders available to buyers as well. If you already have a pre-approval from your own bank, bring it in! We’ll use it to obtain your auto loan without you having to go back into the branch.
