At Auto Credit Express, one of the things we try to stress is that you should use common sense when you take out a bad credit car loan…

Why you should get a warranty

It may sound obvious, but when you take out a high risk car loan, you are paying more, sometimes much more, in interest than on a regular car loan. For that reason, a bad credit loan payment usually involves more of your budget. In many cases, this doesn’t leave much wiggle room for unexpected expenses. The idea behind a warranty is the same as insurance – to spread out the risk into affordable monthly payments instead of one large, catastrophic one. It’s much easier to budget for a small monthly increase than a large unexpected one – and that’s just what a warranty does.

The length of your loan should equal the length of your warranty

When you choose an extended warranty, pick one that covers the entire term of the loan. Even though you should try and re-finance or trade in your bad credit loan as soon as possible and try for a lower rate, something might happen that makes it necessary to carry the loan through until it is paid off. If you have chosen a warranty that only covers a part of the finance period, you could end up driving your car without a warranty and being exposed to a big repair bill while still having to make car payments.

What about a certified used car?

Certified used cars generally have manufacturer-backed warranties. While this means you can get your car fixed at any dealer that carries that brand, these cars can sometimes end up costing you thousands more than a comparable vehicle with an independent warranty. Do your research and compare. If you plan on moving out of the area away from the selling dealer, a certified vehicle may be worth the additional cost.

The Bottom Line

If you are about to buy a car with a bad credit car loan, it is important to consider a warranty. Ideally, this warranty should cover the entire length of your finance contract. You also need to remember that this decision is up to you. A warranty is not a requirement in any car loan.

Here at Auto Credit Express, we feel that a informed consumer is our best customer. Visit our web site at www.autocreditexpress.com. Here you can find answers to many of your questions on our Bad Credit FAQ page. If you can’t find the answer there, we have a toll-free number listed at the bottom of each page that will put you in touch with one of our knowledgeable customer service representatives (during normal business hours). Here at Auto Credit Express, we hope to see you “on the road” to better credit!