If you need a new vehicle but have bad credit or no credit, you need to approach the car buying process a bit differently than how someone with good credit would approach it. If you want to drive away in a new vehicle without signing on for a loan with outrageous rates and impossible to meet terms, there are a few things you need to know about car shopping with bad credit, such as the following:
Know Where to Shop
Many dealerships that offer bad credit car loans are buy here, pay here car lots. These lots offer on-site financing which, though appealing at first, actually result in huge headaches and lost money. These lots have a reputation for selling overpriced, low quality vehicles, and of giving out loans with impossible terms and rates. In the end, they end up with their vehicles back, and victims of the scam end up with worse credit and still no car.
A Little Improvement Goes a Long Ways
If you have time to shop for a vehicle, take steps to improve your credit while you’re looking. The more timely payments you make, the more your score will improve. Pay off all overdue accounts, and if possible, pay off a few accounts in their entirety. By doing this for just a few months, you may increase your score significantly and no longer even need to worry about bad credit weighing you down.
Big Down Payments Help
Again, if you have the time to do so, save a bit of money before you go car shopping. With a bigger down payment, you won’t need to borrow as much, which means lower monthly payments, a shorter term and possibly better rates.
Shopping for a vehicle with bad credit may be difficult, but it’s not impossible. By knowing where to shop, improving your credit score as much as possible prior to going shopping and putting down a big down payment, you can save yourself time, hassle and money on your new vehicle.