The Real Facts About Bad Credit Car Loans
If you have a bad credit score or a subprime credit score, then you know that car loans do not come as easily for you. You will probably struggle getting approval for a car loan because that number keeps you from getting the auto financing that you require. Additionally, getting the car loan may not be as great as you think, because you might be paying for much more than what other people would because of your credit score. Thankfully, that does not mean you have no other options when it comes to car financing.
It is estimated that about one third of people in America will be suffering from a bad credit score, but that doesn’t mean that one third of people do not own cars. You can find a good auto financing option for you that will enable you to get the cash that you need to get the car that you want. These options do not always have to go over your budget and can actually benefit you well in the long run. Here are some ways you can get auto financing and learn more about the ways you can get a car with bad credit.
Going to a Traditional Auto Lender.
Of course, a bad credit score does not mean that you cannot still go for a car loan from a traditional auto lender. They still might give you loan offers despite your poor credit score to be able to get a loan.
However, you have to be aware of what you could be getting into before you decide to agree to anything. For one thing, you would properly be charged with a much higher interest rate and auto loan rates because of your poor credit rating.
You could try to go to bad credit auto lenders or finance companies if you are not confident or please with the loan offers from traditional auto lenders. These types of auto lenders specialize in clients who have bad credit scores, so they will most likely not shun you away.
They will probably readily give you a car loan given that you have a good recent payment history and also have a steady job that you have been in for awhile. However, keep in mind that you could still be charged with rather high interest rates despite their specialty, so you should always double check before you sign those loan papers.
You could always try to improve your credit score to get a better chance at traditional auto loans. By doing so, you could have much better terms and conditions when you apply for one.
If you try to improve your credit, you might have it way better off in the long run because of the benefits that you would have. These benefits include a much lower interest rates and much higher chances of approval when you apply to these car loans.
However, you have to be aware that raising your credit score does not happen overnight. You will have to be patient and wait, because a lot of people do not get good, or even fair, credit scores until at least a year has passed. Some people even wait up to three to five years to get a better credit score because they had such a low and complicated credit score and credit history.
However, if you do some methods together to raise your credit score, it could speed up the time a little bit.
When it comes to getting a better credit score, you should first start with fixing yourself and taking a look at your credit history or reports. These reports will help you see where your credit score gets lower, that way you will know what you have to work on. For example, if you have a bad habit of forgetting to pay the bills on time, then you might have an issue with your payment history and you must start paying for things early or on time. If you have a lot of debt that is still on your credit cards or credit history, then you will have to start learning how to pay off your balances.
These things are habits that must be instilled regardless of whether you want to raise your credit score or not, so it could not hurt to start implying good financial habits into your life.
Renting a Car.
If you need a car right away, you could always try renting one. However, this is not the most advisable option as it can get quite expensive right away. It is usually pretty easy to get your hands on a car if you were to rent it, but that does not make it the best option.
You would be charged quite a large amount for a car that you would only have temporarily. Don’t forget that you would also need to take extremely good care of it. We would only recommend renting a car if you would only need it for a very short period of time, otherwise you should take a look at other options to get a car.
Leasing a Car.
Getting a car lease is amongst one of the most popular options for people with bad credit to get a car right away. For one thing, it can be rather easy at times depending on the person to get a car lease. Additionally, it is way cheaper than renting a car, because a car lease would only think of you as leasing a part of the car instead of renting the entire car.
This makes it one of the fastest ways a person with bad credit can avail of a car. Just be aware that you will
have to return the car once the leasing period has finished.
If you want a higher chance of getting approved for a car lease, you can simply ask a very close< friend or a relative who has a good credit score to sign the car lease with you.
By having a co signer with a good credit score with you, you will be able to give the person offering the lease
peace of mind. If you stop paying for the car lease, the co-signer will be the one in charge of paying off the lease until the period is over. Just be sure to return the car back to them.
Bad Credit Friendly Car Dealerships.
You can get a car loan straight from a car dealership no matter what your credit score is if you go to a buy here pay here car dealership. These dealerships don’t focus on your credit score to see if you are a financially stable person.
Instead, they would rather inquire about how much you make each month and how long you have been employed in your current job. This will help let them know if you will be able to continuously have funds to keep paying them back for a potential auto loan.
The auto loan that they would offer you would be for one of their second hand cars that are almost always in pretty great condition. You could always give these cars a test drive too, so you will know exactly how they are working before you make a choice. So, you don’t have to worry too much about it.
Additionally, you may have the option to give this dealership your old car instead of a down payment, that way you would have to pay less for a car loan.
Another good benefit that you can get from these car dealerships is that they let you choose a lot of the repayment terms. Particularly, they will let you choose how long it will take to repay them.
However, you should remember that it’s always best to choose the shortest repayment period possible.
No matter what your credit score is, you should always be aware that you have options. By reading your options above and seeing how each one compares, you will be able to choose the best car financing method and way to get a car ASAP for you.