You Don’t Need a Credit Score to Buy a Car

No credit score to buy a car

23 Jan You Don’t Need a Credit Score to Buy a Car

No credit score to buy a carNo Credit Score For Me

Sounds wrong, doesn’t it? Doesn’t everyone need a good credit score so to buy a car or get a mortgage? I’m one of those weird people who thinks you don’t need a good credit score at all.

In fact, I don’t even worry about my credit score, because I don’t borrow money in general. I do have a small mortgage, but that was obtained without much consideration for how FICO thinks I manage my money.

My wife and I recently purchased a newer SUV with cash. We did it the old-fashioned way, by actually planning ahead and saving up the money. We could have gotten a loan and had the vehicle sooner, but we would still be paying on the loan today. If we were still making car payments and worrying about our credit score, we wouldn’t have the flexibility in our budget to handle unexpected situations when they come up.

Car payments are nice if you want to tie up your cash flow. They’re great if you want to be locked into a contract to pay someone lots of money for something that loses its value. They’re great for taking away financial flexibility for years at a time. If you like all those things, then by all means you should be concerned about your credit score. Without a good credit score, all those things are even worse for you because you won’t qualify for the best loan terms.

But we don’t like those things. When we saved up the cash for our recent vehicle purchase, we still tied up our cash flow for an extended period of time. The difference was we had the flexibility to do something else with that money if we had a bad month or unexpected expenses. Granted, saving up the cash made us wait a long time before we could drive the vehicle off the car lot. But that meant we had lots of time to pick out the right vehicle for us, instead of making an impulse buy and getting sucked into a sales pitch for something we didn’t need or want.

Even better, the sales process went a lot smoother at the car dealership. We still had to sign a handful of papers, but we didn’t have to wait for a lengthy credit check or sign a bunch of loan papers or truth-in-lending disclosures, or any of that painful stuff. We just wrote a check, signed a few papers, and drove away. Really convenient. Especially with our two kids in tow. They managed to stay very patient since we didn’t have to sit around so long.

So buying a car the old fashioned way took a lot of time and discipline. I’d say that’s a sign of maturity. There was an old ketchup commercial that used to say “the best things come to those who wait.” For me, one of the best things in life is being debt free. So I waited a little and avoided a car loan. And bought a car without a credit score.

Have you bought a car with cash? Do you believe you have to have a credit score to get by in life? Share your thoughts in the comments section below.

  • Kirk Munsch
    Posted at 07:25h, 25 January

    Hi Matt. A kindred debt-free spirit here. Steve Stewart tweeted this and it’s how I found you and will continue to seek out your advice. I tweet/post also and ironically I was thinking about cars just yesterday and it struck me a car is never worth what you paid for it . . . the next day. The car is also just the catalyst of the math equation. Much like any item purchased with credit. It’s just the catalyst that starts the math. I look forward to reading/following you. I can be found on Twitter @KirkMunsch and Facebook as Kirk Munsch.

    • Matt Wegner
      Posted at 07:33h, 25 January

      Thanks Kirk. Glad to have you on board. Always great to see some more debt haters in the group!