If you need a car, but don't have an extra $10,000 or more on hand, chances are you're looking for an auto loan. If you also happen to have bad credit, you may be running into some roadblocks along the way. While it's true that bad credit car buying can be no picnic, it also doesn't have to be complicated. Stop running into that wall – let us show you a clear path to auto loan success.
Realistic Expectations with Bad Credit Car Buying
Having realistic expectations is one of the things that can get you farther down the path when it comes to getting a car loan with bad credit.
You're the only one who can take control of your credit situation. If you need a vehicle and need to build your credit at the same time, you're going to have to let go of some unrealistic expectations.
Let’s look at some expectations people often have when they’re looking for a bad credit auto loan:
- Getting your dream car – You're not getting the vehicle of your dreams. When you have bad credit, it's not the time to finance your dream car. That 2020 Mercedes-Benz model you're eyeing as you carpool or Uber to work isn't going to be yours if your credit score is 461. This doesn't mean the latest luxury model is out of reach forever, it just means it's out of reach right now.
- Getting a zero down auto loan – Again, poor credit takes its toll on every aspect of the bad credit car buying process. Zero down auto loans are typically reserved for those with the best of the best credit. A down payment might not sound like something you think you can come up with right now, but it's worth it for the money you save in interest charges.
- Getting a super low interest rate – Interest rates are based on credit scores, too. With okay credit, you generally qualify for an interest rate between eight and 13%. With bad credit, you're typically looking at an APR of between 12 and 19%. Deep subprime (really bad credit) includes credit scores between 300 and 500, and if you fall into this range, you can expect an average interest rate between 14 and 21%.
- Getting a really low monthly payment – A lot of people who need bad credit car loans often think there's a lender out there that can get them the vehicle of their dreams, with a monthly payment of around $150. That would be amazing, and we'd take that deal in a heartbeat, but it's not happening with bad credit. Even though your monthly payment may be more than you'd like, lenders want you to be able to comfortably afford your car payments so they set minimum and maximums on acceptable amounts of debt. These calculations help to determine how much of a monthly payment you can take on.
Even though this looks like a lot of things that you're not getting right now, let's set aside the have-nots for a minute. When you focus on what you aren't getting, it's often harder to see what you are getting.
Weighing Your Options for Bad Credit Auto Loans
Look at it this way: is it more important to get the new vehicle that's going to impress everyone for a little while, and then have it repossessed because you can't truly afford it (plus, a repossession destroys your credit), or have an affordable, reliable car that you can pay off comfortably while improving your credit?
The second option may not seem as grand, but if you take it, and handle it properly, you're giving yourself a better chance of getting that new vehicle the next time around.
What Do I Get with a Bad Credit Car Loan?
Our mission here at Auto Credit Express is to provide you with the opportunity to improve the quality of your life through easier access to auto financing. That seems like a big goal for something as simple as a car loan, doesn't it?
In truth, an auto loan can improve the quality of your life. You just need the opportunity to get the right type of loan from the right type of lender, and that's where we can help.
Not only can you fill out our free and simple car loan request form and get matched with a special finance dealership in your area, you can also use our expert blog advice and credit tools to help give you the information you need to get prepared and start your journey toward a new or used vehicle.