Buying a Car with Bad Credit

Trying to buy a car if you are a person with bad credit can often prove to be a very daunting task. Luckily enough there are actually lenders that will work with people who have bad credit and are experience some very rough times in their life. There are a few things that you will need to know about buying a car with bad credit before you even start your search. One of the things that you should keep in mind is that with your credit in the state that it is in it will not allow you to be able to demand the best interest rates for your payments.

A lot of times people who have incredibly horrible credit history will have to deal with high risk type loans. A high risk loan is a loan that involves a creditor taking a risk with you even though you have bad credit and granting you a loan. Do not expect high risk loans to ever have decent interest rates, because they never will and will always have them at extremely high levels. However, you will still want to shop around and try to get the best interest rates that are possible and most affordable.

A common mistake that many people make who have bad credit is that they want to apply for a high risk loan towards a brand new vehicle. It is always best to try and get the loan for a car that is used. Most used car lots will not have a sales person that goes around the lot basing everything on your credit history and blatantly post full purchasing prices for cars or down payment amounts on the windshields of the cars there.

It will be best if you go out and seek car lots that have their own financing available for their cars. When looking at lots that do their own financing for their cars make sure that you know if they are willing to work out payment schedules with you based on how you get paid. These types of lots will often schedule payments on monthly or weekly terms.

It is important to keep in mind that buying a car from a place that finances their won vehicles may be a little more expensive to pay back, but will also be one of your best options if you are in dire need of a vehicle and absolutely just cannot wait. A positive side to these types of businesses is that a lot of them will often have very slow business which will make them willing to reduce prices in order to make a sale.

This will be especially helpful to anyone who is dealing with bad credit and not being able to pay a lot for a down payment or how much you can earn for your down payment. You will want to make note of the fact that besides having to make a down payment on a car you will also have to buy the tag for the car as well as purchase insurance. The discount that you receive while purchasing your car might be the way you can go about purchasing these items.

Something that you will want to keep in mind is the fact that once you notice that you credit score is starting to improve that you can in some case try to refinance in order to get another high risk loan for a different car that has lower interest rates. It will however, be more than likely impossible to attempt this with the same car dealer that allowed you to buy the car with your credit in its lowest state. You will need to look for other lender who will view your recent credit history to see if they think you are worth taking the risk for.

You will want to be careful approaching buy here and pay here lots even if they do approve you to buy a car from them. Oftentimes these kinds of dealerships will try to sell you a car at a value that is a lot higher than the car’s actual worth. It is quite common for these types of lots to buy a car that is around $2,000 and try to sell it to you for $10,000.

There is also a very high chance that because of the payment system that these kinds of lots give you that you may find yourself at some point unable to make the proper payments on your car. Harassment is another problem that can be associated with these lots as well. It is always best to do a lot of extensive research on any buy here and pay here lot. You can ask around with people that you know who have dealt with the particular business you are interested in before.

The best way of going about buying a new car with bad credit if you find yourself not desperately in need of a car at the moment is to try and save money, little by little for the down payment on the car you want. Another way to go about getting a loan for a new car when you have bad credit is finding a good co-signer. It will probably be in your best interest to save for a down payment as well as find a cosigner, because this can show a bank that you are more than willing to pay back what you owe. This can oftentimes give you good standing with that particular bank as well.

If you go through a long period of time where you are paying your payments on time or before they are due, there is a chance that will change the loan and put it entirely in your name. The best way to go about trying to buy a car when you have bad credit is just prepare yourself for what’s ahead. If everything that you try at a dealership does not work the next best option may be for you to try and buy a car that is for sale by the owner.


about 7 years ago

With high competition in the auto financing market, getting a bad credit auto loan for a new car is very easy. Many sub-prime lenders will readily approved your bad credit car loan application. But, to get lowest rates on your car loan, you must show a proof of your income. Stable income and employment ensures the lender of regular payments. Also, down payment and co-signer are extremely effective in getting auto loan approval at affordable rates.

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