Car prices aren't what they used to be. But will car prices get cheaper again?
The chip shortage that's plaguing much of the world right now is the culprit for the rise in automobile prices, but prices on the most popular vehicles were already hitting record highs before the pandemic struck. Now those high prices seem to be sticking around.
But for how long? Experts predict the vehicle shortage that's putting the squeeze on prices may not let up until well into 2022 or even early 2023. That's a long time to wait if you're looking for a lower price on that new car.
Getting a Good Deal as a Bad Credit Borrower
If you're a bad credit borrower, you can wait it out and improve your credit over that time, but if you can't wait, working with the right lender is key. As a bad credit borrower, your options are a bit more limited, but far from gone.
You can look for a pre-approval from a direct lender, such as your bank or credit union. You can also try your hand at working through the captive lender of an automaker -- some, like Kia, Ford, and Hyundai are known for working for many types of borrowers.
You may have your most luck by working with a special finance dealership or BHPH lot though, especially with credit issues.
It pays to know the ropes before you head out to the dealerships when you're looking for the cheapest deal on a car loan. Knowing which dealers work with bad credit lenders is also key. You have options when it comes to getting a car loan, but not all lenders work with all credit situations.
Those that do are called subprime lenders and they look at more than just your credit score to qualify you for an auto loan.
Getting the Cheapest Car Loan You Can
With auto prices high, it may take a little work to get the deal you're looking for. Getting the cheapest car you can doesn't mean getting something for $5,000 or less, but getting a vehicle you can afford.
In order to do this, here are three tips you can use:
- Stick to your budget. You don't want to go broke trying to pay for your car loan, so a good rule of thumb is to make sure your payment takes up as little of your available budget as possible. We recommend no more than 20% of your income goes to your car loan, but the lower the percentage the better.
- Choose the shortest loan term you can. When you're a borrower with lower credit, you're typically assigned higher interest rates, so the longer you take to pay off your loan, the more you end up paying.
- Bring a down payment. A down payment is one of the best tools you have when it comes to getting an affordable auto loan. The more you pay upfront, the less you have to finance and the less you pay in the long run.
Pointing You Toward Your Next Deal
Knowing which dealerships work with bad credit borrowers can be invaluable, but it can still be stressful to go from dealership to dealership looking for the right loan. Let us spare you the headache of the search by matching you to a special finance dealership in your area. At Auto Credit Express, we work with an extensive network of dealerships that help people in tough credit situations. Let us get you connected by filling out our fast, free auto loan request form.