New Car Bad Credit Auto Loans
by Dave LaLonde on Friday, September 14th, 2007Often, people with bad credit believe that they cannot get an auto loan to buy a new car. Many believe that they have to buy a cheap used car if they have bad credit. The fact is, if you have bad credit, it is often easier to obtain an auto loan on a brand new car. One the reasons for this is that bad credit auto loan lenders offer better rates and terms on new cars. Another reason is that new car manufactures often offer consumers rebates in lieu of low interest rate financing. Rebates help if you are tying to get an auto loan with no money down.
There are many new cars under $20,000. Take a look at the following comparison between getting an auto loan for a new car under $20,000 and a similarly priced used car through the same lender:
A new Kia Optima EX, for example, has a sticker price around $19,395. At the time of this writing the manufacturer was offering 1.9% financing or a $1,500 rebate.
- If you have bad credit, chances are that you will not qualify for the 1.9% new car auto loan rate offered by the manufacturer. You can, instead, use the rebate as money down.
- Not only do most bad credit auto loan lenders offer better rates and terms on new cars, they also offer better terms with money down.
- The new Kia has a 5 year/60,000 mile basic warranty and a 10 years/100,000 mile drivetrain warranty.
A used 2007 Chrysler Sebring Sedan LX with 15,000 miles has a retail price around $18,595.
- Since you have bad credit and no money down the lender offers less favorable terms.
- Since the vehicle only has 20,000 miles left on the original new car warranty you decide to purchase an extended warranty for $995.
Compare the two car deals side by side:
| New Kia Optima | Used 2007 Chrysler Sebring Sedan LX | |||
| Selling Price | $19.395 | Selling Price | $18,595 | |
| Taxes & Fees | 1,400 | Taxes & Fees | 1,300 | |
| Total Price | $20,795 | Extended Warranty | 995 | |
| Less New Car Rebate | 1,500 | Total Price | $20,890 | |
| Auto Loan Amount | $19,295 | Auto Loan Amount | $20,890 | |
| Interest Rate | 15.95 | Used Car Interest Rate with No Money Down | 19.95 | |
| Length of Auto Loan | 72 Months | Length of Auto Loan | 66 Months | |
| Monthly Payment | $418.01 | Monthly Payment | $523.68 | |
I not saying that if you have bad credit and need an auto loan that you should run out and buy a new Kia Optima. I am only using this as an example. There are many similar new cars that you can afford with bad credit.
If you are looking for similar new cars that are affordable, LotPro.com has a comprehensive list of New Cars Under $20,000,
i am writing in concern of a new vehicle we are from bay city michigan and my girlfriends car has died and we went to right way automotive and ran credit checks and she has no credit and i have bad credit so we would need a cosigner however finding one is a bit of a problem for us and now my car is out of commission as well so we are without a vehicle and she has school everyday and my mom has cancer and i need to take her to kemo every other day….we are looking for a vehicle and preferrably no money down and then we could just make monthly payments on it we average around 2200 take a month between the 2 of us so i was just wondering what could be done and how soon thank you very much.
i have bad credit been trying to get a car for awhile everyone they can help they either what alot of money down or say they can’t help me if thats the case then why say no one will be turned down
I have a 2007 ford Focus with a $496 monthly payment and would to trade it for something new with a smaller payment
CAN YOU HELP ME GET OUT OF A CAR LOAN INTO THE CAR I WANT. IM STUCK IN A BAD DEAL AND HAVE TRIED SEVERALY PLACES TO GET THE TRADE IN I WANT. I OWE ALOT ON MY PURCHASE. BUT THE QUESTION IS: CAN YOU HELP ME GET THE CAAR I WANT DUE TO MY SITUAATION?