Bad Credit Car Dealerships: Tips for Securing a Car with Bad Credit

In today’s world, owning a car has essentially become a necessity rather than the luxury it once was. Fortunately, purchasing a car, whether brand new or used, is relatively easy thanks to the numerous loan options available. However, what happens when one has bad credit? Generally, bad credit often comes in with a score of less than 629. This can make it difficult for you to secure a car loan through conventional means. Keep in mind, however, that many factors are included in your credit score—including not having enough years of credit history. It may not seem fair, but it is the standard across lenders in the U.S.

If you have been tabbed with bad credit due to not having an adequate credit history, there are a few options you can try if you still want to push through and purchase a car. One of the best options would be to visit bad creditcar dealerships and securing financing from the dealership itself. Fortunately, many respected dealerships, such as McLoughlin Chevrolet, are more than happy to provide financing options to those with bad credit.

Of course, this doesn’t mean that you can walk in unprepared and expect to get a proper deal right off the bat. You definitely want to prepare several documents and the like to help you get a better rate on your loan. Some of steps you may want to take include:

  

Avoid Other Big Purchases

You’ll definitely want to make sure you avoid other big purchases before you attempt to secure a loan from bad credit car dealerships. The dealership will likely pull your credit score and study it for a bit before extending an offer. It may reflect poorly on you if you have made several large purchases prior to your loan as the dealership may be worried about your ability to repay your loan. This may lead to even higher interest rates.

 

Make a Larger Down Payment

You will likely find that the actual amount of money you’ll be approved for is smaller than you may have initially wanted. This may limit your choice in vehicle to just a select few. If you want to expand your available options, be ready to make a larger down payment. Ideally, try to pay more than the typical 10 percent. Large down payments can help offset interest, taxes, and other applicable fees.

 

See If You Can Choose a Shorter Loan Period

When discussing the terms of your loan, you will likely have to inform the dealership how long you would like the loan period to be. Many people make the mistake of opting for a longer loan period simply because the monthly payments tend to be smaller. However, make sure you compute everything with the given interest rate. There’s a significant chance you end up paying a staggering amount of money in interest. If your budget allows it, try to choose shorter loan periods. More often than not, shorter loan periods come with lower interest rates.

 

Consider Asking a Family Member to Cosign

You can try asking a family member to cosign your car loan. This will help take into account the credit history of the cosigner, which may lead to a more favorable interest rate. This option is certainly available to you, but be very careful when choosing to pursue this option. In exchange for a more reasonable interest rate, the cosigner essentially guarantees that he or she will cover any missed payments on your behalf. This option should only really be used as a last resort and if you are confident that you’ll never miss a payment.

 

Source:

How to buy a car with bad credit, ConsumerAffairs.com


Categories: Auto Loan