Although pricing in the used car market remains strong, the affordable vehicles that are most appropriate for borrowers with bad credit are, at least at this point, more affordable than they were last year. This being the case, now might be a good time for buyers with tarnished credit to pull the trigger on buying a subcompact, compact or affordable midsize used car.
With the length of the average auto loan increasing, it’s important that borrowers with low credit scores keep their loan terms as short as possible. Not only will they save money on interest charges, this will also allow them to trade out of the car sooner and into a new loan with a better interest rate.
According to NHTSA, “the Takata air bag recall is one of the largest and most complex product recalls in history.” Therefore, we strongly urge borrowers with both good and bad credit and regardless of the year, make and model of their vehicles, to visit SaferCar.gov and use the VIN Lookup Tool to be sure it’s not subject to any kind of open recall.
Both of these vehicles not only represent a good value but also have a starting MSRP of under $18,000 – a fact of particular importance to borrowers with bad credit.
Credit-challenged consumers who understand what actions will and will not impact their credit scores will find it easier to not only reestablish their credit, but also to improve that triple-digit number.
Credit-challenged consumers who want to cash in their current vehicle might want to consider doing so at a dealership as opposed to a website like Craigslist. Even though they might not get top dollar for it, the extra money might not be worth the hassle or the chance of becoming involved in a car buying scam.
The latest report from Experian shows that the growth in subprime auto loans is slower than the overall market. As a result, borrowers need to be aware of their credit situation, have a down payment and pick an affordable vehicle in order to give themselves the best chance of success.