Regardless of whether it is your own fault or not, having a damaged credit record will affect the way your application is received if you want to buy a car through a loan. However, it is still possible to get a car loan, even if your credit record is not perfect.

In fact, you will find plenty of companies offering loans for any purpose, including car purchase, even for those people with bad credit. As you would expect, however, the worse your credit record is, the higher the interest rate is likely to be, and the fewer the options you are likely to have. Much will also depend on whether you own your own home or not. With a home of your own, in which you have a sufficient amount of equity, you stand a chance of getting a secured loan to buy a car. Such a loan would undoubtedly be cheaper than an unsecured or bad credit personal loan; however, your home would be at risk should you default on the loan, so that is certainly something to take into account.

As always with any spending decision when your finances are not healthy, it makes sense to seriously consider whether you really need a new car now, while your credit record is bad, or if you can wait until it has been restored to normal. If the poor record is fairly recent, that can be a bit of a long wait in the UK, though in some states of the US that is less of a problem.

In trying to assess if you really do need that new car, you have to take into account the fact that it is a depreciating asset; but then, that will apply to your new car too. What is perhaps more important is the age of your current car and the likelihood of extra car maintenance costs and repairs as time goes on. This is a dilemma most of has faced at one time or another: do we get the car repaired, and keep it going a few more years, or do we cut our losses and sell now, or trade in. Keeping a car going when it has seen much better days can be throwing good money after bad, so it may be that you do need a loan for a replacement car, regardless of your credit status.

Once you have made a decision to replace the car and to do so by getting a loan, then it is a good time to work out your monthly budget to ensure you are not going to slip behind with the payments again. try to allow plenty of scope for car maintenance, servicing and repair, as well as for fuel, road and vehicle taxes. To help you get back your good credit rating over time, then it is worth cutting back on your own expectations for a car; it may make sense to get something more modest and cheaper than you would ideally have liked.

When it is time to go out and get the actual loan, to buy the replacement car, just make sure you shop around. It is so easy to do online, and you will have many companies to choose from. To keep track, it is worthwhile printing out the relevant pages from the sites on your shortlist. Then, take the details away from the pc and quietly go through them and compare the options. You are more likely to take a detached view if you approach your decision that way, rather than just staying online and hitting the send button impulsively.