Shopping for a car with bad credit? With one hand tied behind your back, that is like searching a haystack for misplaced keys. The hunt is pure sweat; the reward—a dependable set of wheels—may be buried. Still, every day folks walk onto auto lots, hearts hammering, past credit blunders looming big. The general consensus is that if your credit score has dropped, ignore driving home in anything except your fantasies. Absolute stupidity. While buying a car with bad credit is difficult, it is not nearly impossible.
Most likely, you have seen those screaming signs: “Bad Credit Accepted!.” Sounds dubious, isn’t it? These vendors, however, are totally in business for those who have experienced their fair share of financial potholes. They’re not letting you off easy, though; you’ll probably have to provide more evidence of your employment and stability. Be ready with documentation of your residence, recent pay stubs, a few personal contacts—perhaps include the veterinarian for your pet—okay, not really. Still, individuals find it shocking how eager these venues are to help to resolve problems.
The sticky bit is found here. The interest rates can catch your eye quickly. If your credit has been, say, adventurous, then those rates can be surprisingly expensive. But suddenly that rate seems a little less evil than riding the city bus amid a sweltering heat wave. The benefit is that consistent, on-time payments on that new automobile will brighten your credit history faster than you might think. Stay with it; refinancing later may open some doors.
There there is the “Buy Here, Pay Here” choice. Some dealers handle all the loans without using an intermediary from a bank. Imagine borrowing from a cousin who charges a “service fee,” but skips the lectures. Sometimes as often as every week, you personally pay your money to the dealership. Some find that such modest, consistent payments better fit their paychecks. Pro tip: inquire as to whether they notify the credit bureaus of your payments. If not, credit-land may show none of your efforts at all.
Don’t abandon your ability to negotiate right at home. Prices in cement are hardly determined. Should a car remain on the lot for an extended period of time, flat patches on the tires indicate most likely dealer wants it gone. Always pay close attention to the complete price rather than merely your monthly obligation. And, quite seriously, go over the documentation. Financial surprises need to be like confetti, not contract terms.
Your present car hardly runs at all? Trading it in will reduce your down payment even if it is kept together with duct tape and a prayer. Furthermore, avoid shyness; question the dealership about any form of warranty they provide. While some chuck one in for a little period, others will sell you further coverage. After all, used vehicles sometimes have a few secrets buried under the hood.
Knowledge is your best friend when you walk into a negative credit dealership. Look at your credit report first. Decide how much you really can afford, then keep to it. List the things you cannot negotiate. See several locations and weigh the offers. Nobody likes to leave away thinking they received the short end of the stick. You will know it wasn’t handed to you when you drive off with a fresh set of keys—you made it happen, and that is something to be proud of.
