These are usually genuinely good deals that are worth considering as long as you like the models and styles being promoted. The deals usually only last for one month, require a down payment, and have a specific mileage allowance — usually 1000 miles per month, average.

Most lease deals are for 36 or 39 month terms, although some are 24 months. At the end of the lease you can simply return the car, or you can purchase it for the guaranteed purchase price stated in your lease contract. In some cases, you may have equity in the car (it’s worth more than the purchase price) such that it makes sense to buy it and sell it for a profit, or use it as a trade-in for another new vehicle.

Here are the cheapest car lease deals being offered at this time:

SmartCar Pure Coupe – $99/month, 36 months, $999 down (Score 101, Outstanding)

SmartCar Passion Coupe – $139/month, 36 months, $999 down (Score 88, Excellent)

Suzuki SX4 Sedan – $149/month, 36 months, $3621 down (not rated)

Kia Rio LX – $159/month, 36 months, $1840 down (Score 73, Good)

Chevrolet Cruze – $159/month, 24 months, $1430 down (Score 121, Outstanding)

Volkswagen Jetta S – $159/month, 36 months, $1840 down (Score 83, Excellent)

Kia Soul – $169/month, 36 months, $1830 down (Score 75, Excellent)

Kia Forte LX – $169/month, 36 months, $1830 down (Score 77, Excellent)

Hyundai Accent – $169/month, 36 months, $1530 down (Score 75, Excellent)

Scion iQ – $169/month, 36 months, $1830 down (Score 73, Good)

Ford Fiesta – $169/month, 24 months, $1660 down (not rated)

Honda Civic Sedan – $169/month, 36 months, $1800 down (Score 89, excellent)

Subaru Impreza – $169/month, 42 months, $1800 down (Score 71, Good)

Suzuki SX4 Crossover – $179/month, 36 months, $3082 down (not rated)

Nissan Sentra – $179/month, 39 months, $1820 down (Score 79, Excellent)

Hyundai Elantra – $179/month, 36 months, $1820 down (Score 79, Excellent)

Hyundai Veloster – $179/month, 36 months, $1820 (Score 79, Excellent)

Ford Fusion – $179/month, 24 months, $2165 down (not rated)

Nissan Altima 2.5S – $179/month, 24 months, $2820 down (Score 120, Outstanding)

Kia Forte Koup EX – $179/month, 36 months, $1820 down (Score 83, Excellent)

Chevrolet Malibu – $179/month, 24 months, $1380 down (Score 145, Outstanding)

Scion xD – $179/month, 36 months, $1820 down (Rated 74, Good)

Scion xB – $189/month, 36 months, $1810 down (Rated 75, Excellent)

Ford Escape – $189/month, 24 months, $2440 down (not rated)

Suzuki Kizashi – $189/month, 36 months, $2414 down (not rated)

Mitsubishi Lancer ES – $189/month, 24 months, $2199 down (Score 96, Outstanding)

Kia Optima LX – $189/month, 36 months, $2310 down (Score 86, Excellent)

Mazda Mazda3 4-Door – $195/month, 36 months, $1770 down (Rated 72, Good)

Mitsubishi Lancer Sportback ES – $196/month, 24 months, $2199 down (Score 96, Outstanding)

SmartCar Passion Cabriolet – $199/month, 36 months, $999 down (Score 78, Excellent)

Hyundai Sonata – $199/month, 36 months, $2400 down (Score 81, Excellent)

Honda Accord LX – $199/month, 36 months, $1800 down (Score 92, Outstanding)

Hyundai Elantra Touring – $199/month, 36 months, $2000 down (Score 71, Good)

Suzuki Grand Vitara MT – $199/month, 48 months, $2575 down (not rated)

Jeep Patriot Latitude 4×2 – $199/month, 39 months, $2300 down (not rated)

Fiat 500 POP – $199/month, 42 months, $0 down (not rated)

Ford Focus – $199/month, 24 months, $1869 down (not rated)

Chrysler 200 Sedan – $199/month, 39 months, $2800 down (not rated)

Subaru Legacy – $199/month, 42 months, $1800 down (Score 71, Good)

Volkswagen Golf – $199/month, 36 months, $1800 down (Score 75, Excellent)

The ratings shown with each listing above is an evaluation by LeaseGuide.com (www.leaseguide.com) of the value of each deal. The higher the score, the better the deal.

One of the conditions required to quality for these special lease deals is that the customer must have good credit. If you don’t have a good credit score, your monthly payment on these deals will be higher. It’s wise to know your latest credit score when you visit a dealer to discuss a deal. Don’t let a dealer know more about you than you know about yourself. It is easy enough to get your score online from a service such as FreeCreditScore.com after completing a simple signup form.

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Buckle Up

Teaching your teen the importance of using seat belts is one of the most important safe driving tips that they can learn. Drivers and passengers who are properly restrained during the unfortunate event of an accident almost always suffer far less serious wounds, and have a far lower mortality rate, than those who are not wearing their seatbelts. It is estimated by the National Highway Safety Administration that properly worn seatbelts lower the risk of fatal injuries by 45 percent, and the risk of moderate-to-critical injuries by 50 percent.

Focus

Another important safe driving tip is to make sure that your teen knows the dangerous risks of distracted driving. The term distracted driving encompasses many different, and hazardous, activities that take the driver’s focus off of the road. Teach your teen to refrain from using mobile phones and other devices while driving. You should always pull over to use a mobile phone for either calling or sending and receiving text messages. If there are others in the car, have one of the passengers answer the phone, change the CD, tune in to a different station on the radio or change the track on an MP3 player. Any one of these actions can cause dangerous distractions if they are undertaken by the driver.

Don’t Drowse

With the busy schedules of teens today, many will face the challenge of driving while they are drowsy or fatigued. Preparing your teen for safe driving should include a serious warning against driving in such conditions. Most automobile accidents that are caused by fatigue involve drivers that are under 25 years old. In fact, staying awake for 18 hours straight has similar motor reflex effects to having a blood alcohol concentration of 0.08, and everyone should know the dangers of driving while intoxicated.

Defend

A final safe driving tip that you can pass along to your teen driver is a warning against the dangers of aggressive driving. The exhilaration of being a new driver can sometimes lead to unnecessary risk taking (which is also a side effect of inadequate sleep and fatigue). Aggressive driving includes actions such as dangerous or illegal passing on two-lane roads, remaining in the passing lane on highways with four lanes or more, and the all-too-common, and very dangerous, habit of tailgating. With an average of 1,500 injuries being caused each year by aggressive driving practices, it is important for your teen to know that cautious driving is safe driving.

Providing your teens with safe driving tips instills practices that will eventually become habits as they drive through the years. If driving dangerously involves a conscious choice to disregard the safe driving practices that you have imparted, your teen will be less likely to make the poor choices involved with risky driving. When they know the potential consequences of disregarding these simple and safe driving practices, they will wisely take your tips to heart, so that their heart can keep beating for the many years of driving they have ahead of them.

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Auto insurance is one of those irritating expenses of car ownership that has no immediately obvious benefit. We pay and pay, and may never get anything in return. Teenage first car buyers are always a bit startled by the high cost of insurance.

Car insurance is one of the most expensive costs of owning and driving a car, especially for teenagers and other new drivers who can least afford it.

In this article we’ll show you how and where to find the car insurance company for your first car that has the best rates and provides the best service.

We frequently hear the question, “Which auto insurance company is best?” or “Where can I find the cheapest car insurance?” or “What is the cheapest insurance for a 16 year old?” It would be nice if there were a quick simple answer to those questions.

It’s a fact that you will find an insurance company that has the lowest rates for you, your car, and your personal situation than any other company.  But that same company may not have the lowest rates for someone else.  Because rates depend on so many different factors, and insurance companies are not the same in how they base rates on those factors, rates vary widely between companies.

Furthermore, an insurance company that offers low rates in one state may have totally different rates in another state, or may not even be licensed to operate in the other state. That’s why it’s not as easy as saying that XYZ company has the cheapest rates.

Teenagers bear the burden of the highest car insurance rates

It’s  because teenagers cause the most accidents. Rates for a 16 year old male added to his parent’s policy can easily double the cost of the policy. Depending on the state he lives in, where he drives, and the kind of car he drives, rates could be in the range of $1000 to $3000 a year.

Choosing an insurance provider should be based not only on good rates but also on how well the company services its customers. A company with low rates but is difficult to deal with when you file a claim may not be a good choice.Here is a strategy we recommend for finding a good auto insurance company for your first car.

Learn from the experience of others

Visit JDPower.com for the results of a consumer study of major insurance companies, rated in terms of overall customer experience, policy offerings, prices, and customer service. Some of the companies only operate in a single state or only in a few states.  Not all companies are listed, especially many of those who operate in a single state.

Avoid those companies with the lowest scores. Consumer Reports magazine regularly surveys auto insurance customers from all over the U.S. Its most recent survey covered 27 insurance providers and ranks them in terms of overall customer satisfaction and fewest problems with customer claims.  It publishes results in its magazine (last published in the March 2006 issue) and on its web site at http://www.consumerreports.org/. There is a small subsciption fee but it’s well worth the cost.

Get free quotes from multiple companies

Visit or call multiple insurance providers in your area and ask them for rate quotes. A much easier way is to get your quotes online. You can always go directly to insurance company web sites such as those for well-respected GEICO but it’s faster and easier to visit the site of a major independent broker such as NetQuote.com .

The benefit of an indpendent broker is that they work with many insurance companies and can do most of your legwork for you, at no cost to you. They know which insurance companies are licensed in your state, they know which have the best rates for your particular situation and needs, and they know which companies have the best service. NetQuote.com is one of the best of this kind of service.

Check your Insurance Commissioner’s web site

All states have an office of the Insurance Commissioner. The purpose of the office is to approve, license, and regulate insurance providers in their states. Many states maintain a database of insurance companies and customer complaints against those companies, which is available for public viewing on the state’s web site.  You should check the database for problems with any insurance company you may be considering. Check this web site for links to insurance commissioners in each state.

Get your CLUE report and credit score

When you make claims against your car insurance, a record of those claims can appear in a little-known database called CLUE (Comprehensive Loss Underwriting Exchange). Insurers use the database to set your premium cost. Sometimes, even questions about your coverage to your insurance agent that do not result in a claim end up in the database. It’s common for errors to appear in the database, which directly affects what you pay for your insurance.

When you shop for new insurance, the company will order a CLUE report. If your information is inaccurate, you can be left without insurance while you work to correct the errors. You are entitled by law to get a free CLUE report once each 12 months from www.ChoiceTrust.com. The report shows you what insurance companies see about you. If you find errors or mistakes, you’ll be given instructions for filing a dispute.

Check your credit score

Most insurance companies also use your credit history report as a basis for setting your premium cost. They create an insurance score that is directly related to your conventional FICO credit score. If you have a low score that is related to late or missed loan payments or credit card payments, you’ll pay more for car insurance. Credit reports often have outdated data and mistakes that will increase your insurance cost.

You can get your credit report and FICO credit score from FreeCreditScore.com. Look for mistakes and get them fixed as quickly as possible to minimize the affect on your loan rates and insurance cost.

Summary

Auto insurance for your first car can be expensive, but you can minimize the cost by shopping around for the best rates from the best companies.

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Backend products offered by car dealers

You may be offered security systems, corrosion protection, paint sealant, window etchings, fabric guard, extended warranties, and credit life insurance.

These are called “backend” products and are designed to make dealers extra profit on car deals. In fact, some dealers make as much or more money on backend sales as on vehicle sales.

The products are all high-priced and are generally poor values for customers. In most cases, the products are not needed or can be acquired elsewhere for much less cost. For example, fabric guard is nothing more than Scotchguard™ in a spray can. And VIN (Vehicle Identification Number) etchings on windows provide no more security protection than the VIN plates that are already in several locations on your vehicle, including on the dash and on the engine block.

Most new cars have adequate anti-theft systems but if you feel you need addtional protection, such as a LoJack™ theft recovery system, you can get it cheaper on your own than if you buy through a dealer. Same with extended warranties.

Extended warranties may be a waste of money if you are buying a vehicle that has high reliability or if you know you won’t be keeping the vehicle past its manufacturer’s warranty. Don’t buy an extended warranty if you lease.

How about credit life insurance?

Credit life insurance may be one of the backend products offered to you by the dealer’s F&I manager. He’ll explain how it will protect your loved ones in case of your death. Should you die, the insurance will pay off your remaining car loan balance and the family can keep the car. He’ll also explain the cost in terms of monthly payment, not total cost, and that the payment can be combined with your loan payment such that you’ll hardly notice it’s there.

Having this type of insurance is a good idea if your death would put a financial hardship on your family or if your own finances are such that your estate would be unable to pay off the loan — or if you don’t have other life insurance that could be used to settle the loan.

If your family does not need your car, they could simply sell it upon your death and pay off the loan with the proceeds.

Purchasing this type of protection through a car dealer is always going to cost more than if you bought simple term life insurance through an insurance provider. If you feel you need it, get quotes from a number of providers. Ask the companies if they offer policies with a declining payoff, considering that your car loan balance will decrease over time.

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You may still be able to buy another car if you are upside down on your previous loan.

There are two ways to go about it.

One way to buy with an upside down loan
You could sell your old car but you will have to add extra cash to fully pay off your old loan. You’ll need to pay off your loan so that you can give a clear title to your buyer. However, coming up with extra cash might be a problem, especially if you are upside down by a large amount. For many people, this solution is not possible.

Let’s look at some other ways.

Another way to buy if you are upside down
You can trade your old car at a dealer and let the dealer pay off the old loan. Sounds easy, but there’s a catch. If your old car is not worth as much as the amount remaining on your old loan, the dealer takes the difference and adds it to the price of your new car. If you are upside down by a large amount, this can significantly raise the cost of your new car. In some cases, a dealer will not allow the entire amount to be rolled into a new loan, which means you must come up with some cash as a down payment.

When you roll part of an old loan into a new loan, it usually puts you right back into an upside down situation, which is usually worse than your old situation. It is a vicious cycle that you would be best to avoid.

The best way to get out of an upside down loan is to simply keep your old car, keep making payments, until you are no longer upside down. Then, you have the option to do anything you want.

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Auto loan interest rates are hovering at the lowest rates seen in many years. If you are currently paying a high rate, you may be able to benefit by refinancing at a lower rate.

Depending on the value of your car and the amount you owe on your loan, you might even be able to refinance and get cash back out of the deal.

Refinancing an auto loan is similar to getting any other used-car loan. You might refinance with the same company with which you have your current loan, or you might go to a different bank or loan company.

If you bought your car new and financed your loan through the car manufacturer’s “captive” finance company, you might find that the company does not do refinance loans. In this case, you’ll have to go to a bank or loan company for your loan.

Loan rates vary between different banks and finance companies. Refinance rates are usually higher than new-car rates, but lower than ordinary used-car rates. Shop around for the best rates.

Of course, your credit score will affect the rates you are offered. It’s always a good idea to know your latest credit score before you start shopping for loans. You can get your score online from services such as FreeCreditScore.comwhere you only need to fill out a simple form that will allow you see your score instantly.

If your credit score has improved dramatically since you initially borrowed, a low-interest refinance loan could significantly reduce your monthly payment and remaining loan cost.

Your ability to refinance will also depend on the value of your car and the amount of the balance on your current loan. If you still owe more than your car is worth, you are “upside down” and you may not be able to refinance for the full amount you need.

You might also find that you can’t refinance if you are too near the beginning or end of your loan, or if your car is more than about 5 years old.

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What is a good first car?  Which car is the best buy? Which is more reliable? Which gets the best gas mileage? Should I buy a SUV or pickup? Which car is safer? Which is more economical? Which is cheaper to insure?

What car should I buy as my first car?

If you were to ask this question and you gave no other information about yourself or what you wanted, we would suggest you buy either a Honda Accord or Toyota Camry, two of the most popular and most purchased first cars in America.

However, if you already know you don’t want a Honda or Toyota, stay with me. I’m not going to try to convince you that these are the only brands you should consider. I’m just using them as a starting point to help you choose the right car for you.

Why the Honda Accord  and Toyota Camry? Because these two cars have an almost ideal blending of all the following characteristics — the characteristics that most people want in a vehicle:

Honda/Toyota Benefits

• Excellent quality and reliability
• Attractive styling
• Easy handling
• Great performance
• Good gas mileage
• Outstanding safety rating
• Good value for the money
• Affordably priced
• Luxury features standard
• Roomy and comfortable
• Good cargo capacity
• High resale value retention

However, as good as the Accord and Camry are, they are not the right vehicles for everyone.

All of us have different likes, dislikes, needs, and finances. But if you have no idea what car you should buy, and are flexible as to the brand and model, and need a good starting point, these two vehicles are excellent candidates.

First time buyers like Honda Civic

One of the most popular cars for teenagers and other first-time buyers is the Honda Civic. It’s smaller and more economical than the Accord and it’s easy to find used models in good condition. Insurance rates are relatively low and it’s inexpensive to drive. It’s also very reliable and safe.

For those who like to customize their cars, there are thousands of after-market appearance and performance products for the Civic. Used Honda Civics are affordable and dependable.

Other cars for first time buyers

The Kia Rio is a good choice with a base price of just $11,395. It is ranked high in quality and safety, and is very economical to drive. Beware of used Rio’s however. Have them inspected before you buy.

The Toyota Corolla is legendary for it’s dependability, great performance, quality, and lots of standard safety equipment. It’s the smaller sister to the Camry. Used models are usually in excellent shape and hold their value well.

The Mazda3 is popular with first time buyers because it looks good, is roomy, has good performance, low fuel cost, and doesn’t cost as much as other cars with similar features. Used models have excellent reliability.

Other cars, both new and used, that are popular with new teen drivers are the Ford Focus, Honda Fit, Nissan Sentra, Mitsubishi Lancer, Ford Mustang, and Scion models.

What if I have different needs?

Using the Honda Accord and Toyota Camry as a base of comparison, what would you want to be different?  Why doesn’t the Accord or Camry work for you? Do you need a different type of vehicle? Do you want a lower price? Do you need a smaller size? More performance or speed? Larger with more passenger and cargo capacity? More luxury? Sportier look?

Vehicle buying is a very personal experience. As such, it is almost impossible for us to tell you exactly which vehicle you should buy.There are many vehicle makes and models, and style variations, called “trim levels”, within each model. And then there are options that can be added. The result is that there are thousands of different combinations from which to choose — which is a big part of the problem of deciding.

Recommendations as a first car
Certain vehicle makes and models consistently rank high in owner surveys and ratings. Here are our suggestions of recommended vehicles in different categories, based on overall quality, reliability, safety, performance, and value for the money:

Some of the factors that you should consider before making a final decision are in the following list. Rank them as to which are most important to you.

Important Factors in Making a Car Buying Decision

• Reliability / Dependability
• Safety Rating / Features
• Price – Rebates and Incentives
• Styling / Appearance
• Passenger and Cargo Capacity
• Comfort / Luxury Features
• Performance
• Resale Value and Depreciation Rate
• Operating Costs and Fuel Economy
• Routine Maintenance Costs
• Insurance Costs

The resulting prioritized list will help you in determining the vehicle that will best fit your needs.

My first car – new or used?

Even if you have the money or finances to buy a brand new car, it’s often smarter to buy used. But not always.

For example, in a tough economy such we are experiencing right now, car manufacturers and dealers are desperate to sell cars. As a result, most brand new cars currently have heavy incentives, rebates, low-interest loans, and large price discounts. This means that a current-year model car can often be purchased for less money than a used car of the very same make and model. See the following web site for a list of current new-car incentives and rebates:  Best Car Deals

See the following article for more advice about buying new cars versus buying used: Your First Car: New or Used?

Narrow your choices and get prices

Try to narrow down your list of cars to no more than three. Then research the cars on the Internet, shop at dealers or online listings, and finally make your decision.

If you are considering a brand new car, you can get pre-discounted online price quotes at Edmunds.com.

You can look at used cars online at dealers in your area at UsedCars.com. The prices are already discounted.

Caution for online car buyers

Watch out for common car scams if you are considering buying your car online. Dishonest sellers often advertise used cars at unbelieveable low prices, take your money, and disappear. It’s always best to buy from a local source where you can see and inspect your car, and meet the seller face-to-face.

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Although we’ll be primarily discussing brand new cars here, we can make some comments on used cars, if that’s the direction you think you want to go.

Used Car Deals

Finding a great deal on a used car is a bit more tricky than finding a new-car deal. That’s because used cars are, well, used. No two are alike. Even used cars of the same year, same brand, same model, and same equipment can have different mileage, different problems, may have been driven and maintained differently, may have been wrecked (or not), and may have very different prices for these and other assorted reasons. When you find a used car at a bargain price, it might be for a good reason — or the buyer may simply be desperate — or it could be a common scam, especially if bought online. Therefore, it takes much more care when buying used.

You should also know that used car prices are currently at all-time highs, such that it’s possible in some cases to get new brand cars at the same or better prices than late model used cars of the same or similar brand. This has come about due to a shortage of used cars (people hold on to their cars longer in a poor economy), and the fact that car companies and dealers are offering attractive new-car incentives to encourage customers to buy. These incentives come in the form of large rebates, 0% APR loans, bonuses, and special lease deals. See Best Car Deals for more details.

New Car Deals

The best new-car deals are on those brands and models on which car companies are offering incentives, as we mentioned earlier. The new-car market is very competitive right now. Car manufacturers and dealers are fighting to get customers’ attention and sales by offering some of the best deals we’ve seen in years.  These are the kind of deals that customers can’t possibly negotiate for themselves in a dealer’s office. Vehicles of nearly every make (except some luxury brands) are currently being offered with incentives on at least some models and styles.

Lease deals are incredibly good at this time. This is made possible when a car company discounts a vehicle’s price (lease cap cost), reduces the finance rate (lease money factor), and boosts the vehicle’s lease-end value (residual value). All combined, these factors make for the lowest possible monthly payments for the vehicle. A good lease deal is not measured by monthly payment alone. It is measured by the total lease cost compared to the value of the vehicle. Here is a Lease Deal Calculator that can do that job for you, letting you evaluate any lease deal or compare different lease deals.

The best lease deals (at time of this writing) are being offered by BMW, SmartCar, Honda, Toyota, Cadillac, and Nissan/Infiniti. Expect to see a higher level of special lease deals coming from American car companies during 2012.

The best and largest rebates and 0% APR loan deals are coming primarily from American car makers — Chrysler (Chrysler, Dodge, Ram,  Jeep), Ford (Ford, Lincoln), and General Motors (GMC, Chevrolet, Cadillac, Buick). In most cases, you can’t take both a rebate and a 0% APR loan deal. You have to choose one or the other. In cases where the rebate is at least $2500 or more, it’s better to take the reabate over the loan deal. Rebates are also better if you are short of cash because the rabate can act as a down payment.

Summary

If you are looking for a great new-car deal, look no further than your local car dealers who are offering special incentives backed by their car manufacturing companies. Check with the Best Car Deals web site as well as car company web sites for current deals. Most special deals expire at the end of the month, to be replaced (maybe) with new deals that might be better, or worse, than the current deals.

You can get free price quotes for any brand of vehicle at Edmunds.com. The prices you get will contain price discounts and manufacturer incentives if currently available.

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New or first-time car buyers are often surprised at being turned down for a car loan because they have no credit history, which unfortunately has about the same effect as having bad credit. Getting a co-signer might be the answer.

Lenders want to see that a borrower has a good record with previous loans and credit cards. Without a history of credit, a borrower represents a risk to lenders. If they don’t know a borrower’s history, they take the low road and assume the worst.

It’s a familiar “catch-22″ situation in that you can’t get a loan to establish credit without already having credit. So what is the answer?

What is the answer?

The most common solution is to have someone “co-sign” your loan contract. Typically, it’s family member who has a good credit score. A co-signer plays no part in the loan unless the primary borrower fails to make payments. In that case, the loan company would have the right to seek payment from the co-signer.

A co-signer does not share ownership of your vehicle. If you pay off your loan on time and without problems, the co-signer has no further role, rights, or responsiblities. Their job is finished.

Even if you default (fail to pay) on your loan and the co-signer has to step in and make payments, he/she still has no owership rights. The car would still be in your name. Many people who co-sign do not understand this important point.

Another point that is important for co-signers to understand is that a co-signed loan or lease shows up on both the borrower’s credit report and the co-signer’s as a financial obligation or debt. This may affect the co-signer’s ability to get a new loan or lease for themselves if they are already close to being over-borrowed. It increases their “debt load” which is a factor that is considered when one applies for new credit. Both you and your co-signer should know your credit score before you apply for a car loan. You can get your most recent credit score online at FreeCreditScore.com.

However, on the postive side, if you pay off your loan with no problems, both you and the co-signer benefit from the good credit report. Both you and the co-signer will improve your credit scores. This makes having a co-signer a great way for someone with no credit to begin building a good credit history.

Selecting a co-signer

You should take care in selecting a co-signer. Since approval of your loan will depend on their credit worthiness, the person should have a strong and healthy credit history, a steady source of income, and not have excessive debt. For most new car buyers, this will probably be a close family member.

If you have already shown a history of financial irresponsibility, you may have difficulty finding someone who is willing to assume responsibility for your new obligations. Like the banks or loan companies, your potential co-signers may not want to take on the added responsibility and credit debt load. If the co-signer is not able to take over payment when the primary borrower defaults, both the borrower’s and the co-signer’s credit score are damaged.

If you can’t find a co-signer

If you can’t find someone who will co-sign for you, you have few other options. You may have to work out your transportation needs another way while you save enough money to get started with an inexpensive used car, while building your credit history so that you won’t need a co-signer the next time. Get a couple of credit cards or department store cards, use them often, and pay them off each month. You can then watch your credit score improve with a monitoring service such as FreeCreditScore.com.

You could also borrow cash from friends or family, although this method doesnhelp you build a good credit history. In many cases, you may not need the entire amount to buy your car. Often, a large down payment will allow you get a loan even with no credit or bad credit. A smaller loan presents less risk to a lender, and could allow you to be approved.

You could also try a used car dealer who specializes in working with people with bad credit, known as “buy here pay here” dealers who finance their own loans, which means it won’t help — or hurt — your credit. Just know that this kind of dealer usually sells overpriced vehicles at very high loan interest rates.

Summary

Getting a co-signer is a great way to start building your own credit history. If you make your payments on time, don’t skip payments, and don’t default on your loan, you’ll be in great shape for your next loan — without a co-signer.

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Buying a car with a low credit score?

Having bad credit means that sometime in your past, possibly as far back as seven or ten years, you have had missed or late loan payments, repossessed property or cars, or have declared bankruptcy. You may also have an excessive number of credit cards with high balances. These factors are included in your credit history reports that come from three credit reporting agencies: Transunion, Experian, and Equifax.

Your entire credit history is summarized in a single number, called your credit score.  You can see your most recent credit score online with a simple sign-up at FreeCreditScore.com .

Your credit score determines if you’ll get approved for a car loan, how much you’ll in interest, how much down payment you’ll pay, and even how much you’ll pay for auto insurance.

Credit score range from 300 to 850. A credit score less than about 680 is generally considered by most lenders to be “poor” or subprime credit.

How Bad Credit Affects You

Very few things in life can have a more devastating effect on your lifestyle than a poor credit score. A low credit score can cost you hundreds or even thousands of dollars per month.

Credit Cards

Most prime credit cards are entirely out of reach to consumers with bad credit. And the few credit cards that are available to them (known as “sub-prime” cards) typically require exorbitant setup fees or recurring monthly fees, offer very low credit lines, often require cash deposits, and in most cases do not even report your positive credit activity to the credit bureaus.

Automobile Financing

If you are making payments on a car, you are probably paying between $5,000 and $9,000 more just for having bad credit. This added interest shows up every month in a higher payment. Take a look.

What to do

Of course, the most important thing to do is start working on repairing your credit. However, you shouldn’t expect instant results. Meantime, you may have accept loan rejections, or having to pay high interest rates and make large down payments until your credit score gets better.

Getting a family member to co-sign with you on your car loan is the most common way to circumvent some of the problems of bad credit. A co-signer is not a co-borrower as a husband and wife might be. The co-signer is only there to make payments if you stop making payments yourself. The loan is yours and remains yours, even if the co-signer has to pay. Getting a co-signer is a great way to avoid some of the problems of poor credit, and gives you some time to build your credit back by making your payments on time.

If you can’t find a co-signer, you can look at buying your car from a dealer who specializes in working with people who have bad credit, known as “buy here pay here” dealers who often sell overpriced vehicles at very high loan interest rates.

Also check with a reputable online car loan company such as CarsDirect that provides car loans to people with no credit or poor credit.

Repairing Credit Yourself

The Fair Credit Reporting Act gives you the right to dispute any and all items on your credit reports that you feel classify as inaccurate, unverifiable, or misleading. If the bureaus can not verify that the information on your reports is indeed correct, then those items must be deleted.

Disputing items on your credit report is easy. Getting results from the credit bureaus is amazingly difficult, complex, and infuriating. It is not a coincidence that the Federal Trade Commission receives more complaints against credit bureaus than any other type of business. Remember, the credit bureaus are primarily interested in protecting their profits. Investigating your challenge consumes these profits. Short of sparking a mass number of lawsuits, the credit bureaus seem to do everything in their power to discourage consumers from making progress in their restoration efforts.

Restoring your own credit is like repairing your own transmission or representing yourself a court of law; it is possible, but you must decide if you are willing to take the time and assume the risks of doing it yourself. Most people get a professional company or attorney to help them.

Summary

Buying a car with bad credit is possible but your choices may be limited. You could be refused if you credit is bad enough, or you could be required to pay a high interest rate and/or make a high down payment. Getting a co-signer is often the right solution. It not only allows you to get the loan at a good interest rate, but also helps you improve your credit score.

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