Financing a used car with a bad credit car loan can help you raise your FICO score but you should also consider an extended service contract
Getting a car loan with bad credit
If you're reading this, there's a good chance that you belong to a growing group of consumers that have bad credit and you need a car loan. If this is the case, Auto Credit Express can help you. By filling out our online auto loans for bad credit application there is a good chance that you can begin a new chapter in your life by getting approved at one of our affiliate dealers for a bad credit auto loan. You will then be on the way to re-establishing your car credit and raising your FICO scores.
The alternative – buying a vehicle from a tote the note car dealer - can be a problem because these dealers don't report your payment history to any of the credit bureaus. On the other hand, taking out a loan with a bad credit lender and making the mistake of choosing a vehicle that's too expensive can also create problems since this can stretch your budget and even result in repossession. If this happens, rebuilding your auto credit has to be put on hold for at least a year, since most car loans with bad credit lenders will only consider applicants with a repossession that's over a year old.
What about used
With the cost of new vehicles rising every year, most credit-challenged customers will conclude that it makes more sense to go with a 2 or 3-year-old used car. This decision makes sense for a couple of reasons. Most new cars lose anywhere from 20% to 40% of their original value in the first two or three years, making a two to three-year-old vehicle that much more affordable. Secondly, because the quality and durability of vehicles is at an all-time high, used cars are now more reliable than ever.
But even given this reliability, we recommend that you seriously consider purchasing a service contract if you plan on buying a vehicle with a bad credit car loan. There is a reason for doing this even though you may be on a tight budget: it could help you avoid repossession.
Buying peace of mind
You may have heard this before, but we'll state it one more time: a service contract is like an insurance policy. When you buy one, you are betting that your car is going to break, while the service contract company is betting that it won't. Which side of the table would you rather be on?
It's a fact that today's cars are more reliable. But at the same time, these modern vehicles are also much more complex. Computerized engine management and vehicle safety systems make your car more fuel efficient and its occupants more protected, but when something goes wrong inside these various black boxes, they can be very expensive to repair.
Working it into your budget
Which brings us to a second point: It's much easier to plan on spending an extra $25 -$35 a month, every month, on your car payment than it is to have to come up with $300 or more – right now - to replace an electronic part on your car in order to get it running so that you can drive to work. The fact is, if you can't immediately repair your car, you may either be forced to find a second car with a tote the note dealer or to take public transportation.
Too often, this sequence of events leads to the repossession of your financed car, since who wants to make payments on a car that doesn't work?
The Bottom Line
The tighter your budget, the more important it is for you to avoid unexpected expenses. After you've filled out our online bad credit auto loan application and received an approval through one of our affiliate dealers, do yourself a favor and seriously consider a service contract if you're financing a used car. By doing this, you may avoid a situation that could impact your ability to repay your loan (if you can't get to work, you can't pay your expenses).
At Auto Credit Express, we specialize in placing customers with limited or bad credit with dealers that can help them get financed. Our affiliate dealers are knowledgeable and treat every customer that walks through their doors with understanding and respect. If you have any questions that our web site can't answer, feel free to call us at the toll free number listed on every page.
So if you are serious about getting your credit back on track, why not begin a new chapter in your life by filling out our bad credit car loan application now.