Having bad credit doesn't always have to stop you from getting approved for an auto loan, but it does change how you should apply for one. With some planning and understanding, you can better prepare yourself to buy a car with bad credit.
Finding a Dealership that Works with Bad Credit
Having a car – to get to work, school, or wherever else life calls for – is necessary for most people. Considering the high prices of vehicles today, many people turn to an auto loan to finance their cars.
Unfortunately for people dealing with less than perfect credit, many lenders won't work with applicants with imperfect credit. They can first try to apply with a local bank, credit union, or an online lender, but it can be tough finding an approval. Instead, poor credit car buyers have a better shot getting a car loan through a special finance dealership. These dealers are signed up with subprime lenders who offer bad credit auto loans.
You should be prepared to pay a higher interest rate than a borrower with good credit. However, a bad credit car loan allows you to finance a vehicle while getting the chance to improve your credit. If you make all the payments on time and boost your credit score, the short-term pain will be worth the long-term gain.
Tips for Buying a Car with Bad Credit in 2018
With the right plan in place, you can prepare for success when financing a vehicle with poor credit. These tips can start you off on the right foot:
- Check Your Credit – Before taking out any loan, you'll want to check your credit reports and credit score to know where you stand. This way, a dealer or lender can't decide your creditworthiness for you – you'll already be in the know. Make sure to carefully check your credit reports to verify all information is accurate, and dispute any errors if that's not the case.
- Set Your Budget – Just about the last thing you need when borrowing with imperfect credit is to overspend on a car. Consider your monthly income and expenses and set a car buying budget to stick to. At the same time, it helps to look at your basic needs in a vehicle. You don't want to shoot for something larger or more expensive than you absolutely need considering the higher interest rate. Instead, aim for something you can afford and rely on while you work to build up your credit.
- Have a Down Payment – Subprime lenders often require that you have a down payment, but it's in your best interest to have one anyway. Not only can a down payment help you get approved, having one can save you money, too. A large down payment can help reduce the size of your loan, which allows you to get lower monthly payments and pay less in interest charges.
Let Us Help You Buy a Car with Bad Credit
If you need to buy a car with bad credit now, it helps to be prepared and to find a dealership that's capable of helping you. Auto Credit Express works with a national network of car dealerships that are equipped to handle unique credit situations. We can match you with a local dealer if you get the process started by submitting our secure and free auto loan request form online.