You have probably seen the commercials on television that advertise new cars with 0 percent interest for a period of time. This sounds really great because who doesn't want a low interest rate? Everyone does, but only the best qualified buyers receive that rate. Everyone else will receive another rate based on their credit score. And if you so happen to have bad credit then you will find buying a car all but impossible from traditional sellers. That means you may need to shop smaller car lots and work with companies that offer on the lot financing. In many cases they are used to dealing with people with bad credit and will be able to work something out for you. The following suggestions will also help you buy a car with bad credit.
Big Down Payment
If you have bad credit then you won't get a car loan with no down payment. Instead, to make the terms o the loan better for you it is a good idea to have as big a down payment as you can. This might seem difficult at first because when you have bad credit you may be stretched for cash. If this is the case then saving a large sum of money might seem impossible. Even if that is the case you will be able to get financing with almost any down payment, as long as it is something. But, if you have a large down payment then you will be able to better negotiate the terms of the loan.
Short Loan Term
Another good idea to improve your odds of getting a car with bad credit is to take out a short term loan to help pay for the car. Not stretching the payments out over six years shows you are serious and interested in paying the car off as soon as possible.
Small Dealers
There are many small dealers who only work with those who have bad credit. If this is you then what you need to do is find a company near you and ask them about financing for your credit situation. .Many times as long as you have an average sized down payment, a job, and a telephone then you will be approved for financing.
As you can see there are ways to get a car loan even when you have bad credit. Just shop around and find the best terms you can for your situation. The truth is that the worse your financial situation the more difficult it will be to get financing. But, if you keep at it and provide you are worth the risk then companies are willing to give you a shot.
No matter what type of credit you may have, you can probably find a loan anywhere. The important part is to make sure that you read the terms and conditions over before you put the pen to the paper. Sometimes the smaller dealership guys like to rip you off in anyway possible. Being smart can get you a long ways.
Car dealer loan deals are not that bad as many people think. However it is true that they may hide a lot of surprises so if you are planning to use a car dealer loan you should be extra careful.
The first thing to watch out for is if the interest rate is fixed. By fixed we mean clearly stated in your contract and that all is written in a way that wouldn't allow the car dealer to change it later.
What many car dealers do is to approve your car loan application, make you sign the documents and give you the car. Later they just give you a call to say that in fact you do not qualify for this loan because you are with a bad credit (which you already know anyway) and that you will have to pay higher interest rates. If you fall into this situation either try to find financing from another place or report this scam and fight back.
Another very popular scam applied by car dealers is to make you find a co-signer for your loan dumming you that this is the only way to get finance since you have a horrible credit history. It will not be difficult to convince you first of all it sounds reasonable and second of all the car dealer will make you believe that this will in fact repair your bad credit.
Later you will discover that your name is not included in the loan documents and that the loan in the name of the co-signer although you are repaying it. Not only that this is in fact illegal and may lead to serious penalties but it is not helping your bad credit at all. If a car dealer offers such thing to you must refuse.
If you are a bad credit customer and have difficulties finding a loan, it is quite obvious that you should not overstretch. This means to buy a reasonably priced car and not to buy any extras such as extended warranty. However many car dealers will try to trick you by making you believe you must buy a warranty that will increase your loan in order to qualify. Since you are desperate in getting the car you would say OK. However if you think for a second you will easily see that this is simple trick to increase your loan.
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Both Tom Tessin & Keith Londrie are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Tom Tessin has sinced written about articles on various topics from Mileage and Fuel, Education and Finances. Find and more of Tom's work at FINDsecuredcards.. Tom Tessin's top article generates over 673000 views. to your Favourites.
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