How to Buy a New Car With Minimum Wage

The National Automobile Dealers Association and Federal Trade Commission states that the average price for a new car is $28,400. If you earn minimum wage and have other financial responsibilities, it can be difficult to pay for a new car in full or to qualify for an auto loan that fits your budget. Before you begin to shop for a car, build up your credit, research your options and save up for a cash-down payment.

Instructions

1

Determine how much you can afford to pay each month. Before you begin to research new cars, look at your budget and determine how much you can pay towards your car monthly. Write down this figure and take it with you when you begin car shopping.

2

Talk to your bank and car dealer about loan issues before shopping. Before you begin to research specific makes and models, talk to prospective lenders about their income and credit requirements.

3

Save up a down payment of no less than 10 percent. A sizable down payment on a new car will lower your monthly payments and give you a better chance of being approved for a loan.

4

Build up your credit. Regardless of your income, having a high credit score, low debt-to-income ratio, and established credit history will increase your chances of being approved for an auto loan.

5

Do your research. Contact several dealerships before you make your purchase, researching prices and financing options.

6

Find a co-signer. If you are unable to qualify for a loan while making minimum wage, find a relative or friend with good credit and solid income who will co-sign on your loan.