Buying a Used Vehicle with Poor Credit: The Basics

There are many reasons why you might find yourself dealing with a poor credit rating. Illness, the loss of a job or other unexpected events may cause a serious drop in your credit score, which can make it difficult to get financing for a used car. However, there are ways you can secure bad credit car loans, and we’d like to give you a few tips for getting started and what to expect.

 

Understanding Poor Credit Car Financing

 

Before you seek out non-traditional car loans due to your poor credit, it’s wise to understand how these loans differ from one you might receive from a bank or large financing company. Bad credit car loans are usually offered by used car dealerships and have a variety of interest rates. These rates might be higher than ones offered to those with better credit, but you can always compare what different dealerships offer you before you decide.

 

What to Expect at the Dealership

 

When you visit a dealership that offers bad credit car loans, you can expect loan officers to work closely with you to understand exactly what you can afford. They may pull your credit report, but not all lenders judge your ability to pay simply by that number. If you have steady employment and are working to repair your credit, that may be enough to secure a loan.

 

Loan Terms

 

If you have poor credit, you may be offered a long-term loan that can help lower the cost of monthly payments. The length of the loan may vary with dealerships, but some can extend up to five years. If you accept one of these loans, make sure you tell the loan officer exactly what you can afford in terms of payments and whether you will have the option to refinance in the future, if your credit permits.

 

Having poor credit can make it difficult to secure a used car loan. However, when you understand the basics of bad credit car loans and how they can benefit you, the road to financial growth may be easier to navigate.

How to Get Your Finances in Order Before Securing an Auto Loan

The decision to buy a new vehicle is a big and exciting one, and not one that many people come to lightly. There is a lot that goes into coming to that point, including landing a good-paying and secure job, being relatively debt free and having a decent credit score. That said, if you’re thinking about securing a car loan, there are a few steps you should take first.

 

Set a Realistic Budget

 

Just because you can finally afford a new car does not mean that you should be careless with your budget—even if your credit score says that you can afford that really nice Maserati parked in the lot. A new car is a luxury, and as with all luxuries, you should only plan to pay what you realistically can afford. Add up all of your monthly and annual expenses and subtract the total from your net income. Leave wiggle room for savings and emergencies. What you’re left with is what you can afford to pay.

 

Boost Your Credit Score

 

The higher your credit score is, the better, as that means the less you will have to pay in interest over the term of your loan. Whether your credit score is so bad that you’re only able to secure bad credit car loans or it’s so outstanding that the dealerships are begging you to buy from them, do what you can to improve it until shopping day. Even a ten-point boost can lower your rates by a few percentages.

 

Look Into Trade-In Values

 

If you own a vehicle already, don’t just let it sit and decay after you buy a new one. Rather, see if the dealership you plan to work with will do a trade-in. Even if your old car is only worth a couple grand, that couple grand will serve as a nice down payment—and a considerable down payment can help to make you look more reliable in the lender’s eyes.

 

The decision to buy a new vehicle is huge, so if you’re at that point in your life, congratulations! That said, don’t approach the process lightly, and get your finances in order before you start shopping.

3 Situations That May Necessitate Getting a Car Loan

Like many people, you may not think about car loans until you’re in scenarios that make them necessary. There are several situations that are well suited for vehicle financing.

 

A College Graduate Getting a First Car

 

Once a person graduates from college, he or she may want to celebrate the milestone by getting a first car. Up until that point, the individual may have just used a parent or friend’s car, so vehicle ownership is a major improvement.

 

A person who is in the early stages of adult life and has just earned a degree is likely not financially able to afford the up-front cost of a car. However, a loan could make the cost manageable.

 

Having to Replace a Vehicle That’s Broken Beyond Repair

 

Perhaps you’ve often thought that if your vehicle suddenly broke down, it’d be very difficult to maintain your routine. When people find themselves without their sole sources of transportation due to major malfunctions, they often determine that the only way to make a vehicle fit into existing budgets is to apply for car loans.

 

Our dealership assists people from a variety of financial backgrounds and we know that circumstances can dictate the need to buy a car quickly. Talk to our financing experts if that’s the case for you.

 

Buying a Vehicle to Meet the Needs of a Growing Family

 

Maybe you’ve just found out you’re expecting the arrival of triplets in less than a year. If that’s the case, your two-seater sports car just won’t suffice for family travel needs.

 

Also, due to the additional costs of getting ready for those new arrivals, your budget probably isn’t flexible enough to pay for the whole cost of a vehicle immediately. A loan could let you find a larger car while enjoying peace of mind.

 

These are just some of the many situations that make people start the application process for car loans. Visit us today and let us help you with financing.

Explore Financing Before You Start Vehicle Shopping

Once you determine which dealership to get your next vehicle at, talk to them about their financing options before you start to browse the vehicles on the lot. This is especially important if you have bad credit because it allows them to look specifically for bad credit car loans that they may offer in house.

 

Know What You Qualify For

 

If your credit is not great, the dealership financing options could be more limited compared to a shopper with an excellent score. When you talk to the finance department first, they can run your information and crunch the numbers. This gives you a better look at the total loan amount you may be able to get. Once you know this, you can stick to looking at vehicles at this price or lower on the lot.

 

Clean Up Your Credit or Get a Cosigner

 

If your credit situation means that your financing options are a bit dim, you will know in advance if you should work on your credit before buying. It also lets you know if a cosigner could help you to get better terms and a larger loan amount.

 

Speed Up the Process

 

When you pick out a vehicle first, if you do not qualify for a loan large enough to cover it, you have to go back to square one. However, when you get your financing options first, you can work within the financing parameters that you qualify for, eliminating the possibility of not qualifying for the vehicle that you choose. So, you simply pick out one that works, finish the paperwork and drive off the lot.

 

When you get the financial stuff out of the way first, it makes shopping for a vehicle a bit less stressful. You will know what you are working with and if there are any limitations with factors, such as the loan size, as you are exploring the available vehicles.

Do Not Let Bad Credit Get in the Way of Your New Car

You may be dealing with a major dilemma. You want and need to get a vehicle, but your credit score is low, and no one wants to provide you with the loan you need. If you feel like you might be stuck without a car for a long time because a credit score does not improve overnight, let us help you out. Our dealership believes in offering second chances to those who struggle with bad credit. We provide bad credit car loans for those who truly need them.

 

Apply For the Loan

 

You may be afraid of getting turned down because you have been down that road before. If you want to have an opportunity to get a loan for a vehicle, you have to take that chance and fill out an application. You could come to our dealership to start the application process. We will let you know if you have been approved. We are not concerned about your bad credit. Our dealership wants to help those who cannot wait for their credit score to rise before getting a vehicle.

 

Pick Out an Affordable Option

 

When you get approved for the loan, you will find exactly how much money is being offered to you in the form of a loan. From that point forward, you could start walking around the dealership lot to see the inventory that fits within your price range. Our dealership has no shortage of fantastic vehicles that are worth purchasing. You may find an affordable option in a matter of minutes.

 

Never let your bad credit score get in the way of you being able to purchase a vehicle. If you need a bit of assistance, we are here to help. We provide car loans for those with bad credit because we know how important it is to have a vehicle for all kinds of reasons. Now you can find something that is perfect for you without getting turned down.

3 Mistakes to Avoid When Trying to Get Bad Credit Auto Financing

If you have bad credit, you may assume that purchasing a new vehicle is out of the question. It’s not. Many lenders offer bad credit car loans to people with low credit scores. Though the rates are higher than traditional auto loans, they are ideal for individuals who need a reliable vehicle but who cannot spend months fixing their damaged credit score. With that said, there are three mistakes to avoid when financing a vehicle with bad credit:

 

Providing Wrong Information

 

Too many people over exaggerate their income and downplay their expenses to achieve better rates. Don’t do this. Dealerships are meticulous when it comes to checking a person’s information. They want documents verifying income, bank statements verifying expenditures and a list of references. If you somehow slip through the cracks, you’ll be stuck with a loan you can’t really afford, thereby risking your credit score even more.

 

Underestimating Your Creditworthiness

 

Don’t just assume that you have bad credit. If you’ve been working on building your credit through secured credit cards, you may have better credit than you though. Check your credit score before heading to the dealer. If you go in blind, they get to define your creditworthiness, and they might not be honest about the information they turn up. Get copies of your reports and research what others in your score range are qualifying for to avoid having a fast one pulled over on you.

 

Overextending Yourself

 

Longer bad credit car loans might seem ideal because they come with lower monthly payments, but they may end up costing you more in the long run. If the vehicle’s total combined with the high-interest rates mean that you need to increase the term just to afford the payments, you cannot afford the car. At this point in your life, you don’t need a nice car—you just need a car to get you from point A to point B.

 

Bad credit car loans are a great option if you need transportation today and cannot wait until your credit score has been restored. However, be careful when working with bad credit lenders, and use the above advice to obtain the financing you can reasonably afford.

Getting a Good Car Loan With Bad Credit

Cars are essential in today’s fast-paced world, but if your credit is poor, it can be difficult to secure solid car loans. With a little knowledge and creativity, however, you can find a loan that best fits your needs and budget.

 

Talk to the Dealer

 

We work with a variety of lenders and there is usually at least one who is willing to work with those who have subpar credit. Keep in mind that the interest rates tend to be higher, but there are ways to make this more bearable, such as getting a loan with a shorter term or putting more money down on the vehicle.

 

Get a Cosigner

 

If you know someone with good credit who is willing to cosign for you, this can help to get you a better loan. We can help you to determine how much of a savings you can expect when the cosigner’s credit is taken into consideration.

 

Consider a Slightly Older Vehicle

 

If you are on a budget, you can explore our inventory of used vehicles. With lower prices, it is easier to finance and get monthly payments that match your budget.

 

Save for a Larger Down Payment

 

A larger down payment works as a show of good faith for those working in our finance department. If you are looking for a used vehicle, work toward saving up 40 to 50 percent of the total cost as your down payment. For example, if you are looking to purchase a $10,000 vehicle, try to save a down payment of at least $4,000. This shows the us that you are serious and it reduces our overall risk should we extend you a loan.

 

Use this information to find car loans that will work for you so that you can secure your next vehicle. You should also make sure that you know your credit score before starting the process so that you know exactly where you stand.

First Time Car Loan Budget Tips

Buying your first car is an exciting time in your life that you more likely than not want to share with other people. It’s not surprising that you might feel proud of your accomplishments by this time. Your car buying experience can be made more practical by basing your purchase off of your budget. A professional auto dealer can also help you to secure financing based on your budget, so keep the following tips in mind to get the right financing.

 

A consideration a first time car buyer needs to make is how much the car could cost in repairs. A person needs to establish an accurate budget in order to ensure that all bills, especially car loans, get paid, and car upkeep should most likely be a part of that calculation. A car dealer might be able to help a first time car buyer understand which cars are projected to need what amount of repairs. A person trying to buy a car could think about asking a dealer for assistance if that person wants assistance in understanding the different types of cars.

 

Another helpful technique for you to use when thinking about how to pay for your first car is to define what kind of car you need. A person’s requirements can vary from region to region, block to block. The roads near you may prove difficult during the winter months, so you might prefer a more rugged car. Alternatively, you may be struggling to find parking space in the city and therefore opt to find a smaller car. These are two examples that can both help you brainstorm about the kind of car you need. Then you can base your budget for your car off of your projected needs.

 

Then all that is left to do is visit the dealership and try out the car. Once you confirm that it is the right car for you, the dealership can help you with the details of getting your car loan based on your budget.

Buying Back Good Credit With a Used Car Loan

Financing a quality used car through a reputable used car dealer can be a great way to improve a lagging credit score.  A low credit score can sometimes make it seem difficult to purchase a vehicle, but there are options, no matter how low a credit score has fallen.

Credit scores fall due to many reasons.  The best way to raise a falling score is with good positive payment reporting on a credit account.  It can be very difficult to get that credit account with a low score. There are very few credit products available to those with low credit scores. Most banks will require a security for loans to anyone below a certain credit threshold. In most cases, these secured loans will not positively affect a person’s credit score, no matter how diligently payments are made.

One solution is with a quality used vehicle.  Used car dealerships often have relationships with many lenders and can easily handle both the purchase and the financing of your vehicle in house. Often they work with lenders who specifically assist those with low credit scores in purchasing a vehicle.

These types of car loans may require minimum down payments or cost a little more over the life of the loan, but they have two major benefits for the lower credit consumer.

Firstly, a low credit car loan through a lender that a car dealer has a good relationship with may allow an individual to purchase much need transportation which would otherwise be unavailable to them.

Secondly, and more importantly, even though these loans may coast a little more over time, these lenders work with credit reporting agencies, reporting on-time payments and helping raise a credit score over the course of the loan.

With on-time payments, the slightly higher fees associated with a low credit score loan through a quality used car dealer allow a consumer, essentially, to “buy back” a good credit score.

What to Look for in a Traveling Vehicle

If you like to travel or you have a long commute to work, when you look at used cars, you want to keep this in mind. You want a vehicle that has certain features to help ensure that your travels are cost-effective and comfortable.

 

Adjustable Seating

 

To ensure optimal comfort when you are driving, adjustable seating is a necessity. This is especially important for the driver because you want to sit comfortably and be able to reach the pedals and steering wheel without having to stretch or without being cramped up.

 

Functional Air Conditioning

 

When the weather is warm, not having air conditioning can be downright uncomfortable, especially when temperatures exceed 80 degrees Fahrenheit. Your vehicle can quickly become 100 degrees Fahrenheit or hotter inside, especially when your vehicle is in the sun. Air conditioning combats this so that you are cool and comfortable throughout your entire trip.

 

Adequate Fuel Mileage

 

When you travel a lot, the last thing you want is to have to stop often to fill the gas tank. Look for a vehicle that is fuel efficient so that you are getting the most drive time out of every full tank. This saves you both time and money when you are on the road.

 

Solid Suspension

 

As you travel around, it is inevitable that things like potholes and bumpy roads will come up. When your vehicle has a good suspension, this cushions the road to reduce how bumpy your ride is to help ensure optimal comfort, especially for passengers who want to take a nap and relax on the way to their destination.

 

As you can see, there are some features you want in your next used car so that you can travel with ease. This will also help to save you money and ensure that your time spent on the open road is comfortable, relaxing and fun.