 Bad Credit: Tips For The Auto Buyer With Bad Credit
Posted by carsandtrucks on Thursday, November 08 @ 10:37:47 EST
Can you buy a car if you have bad credit? Yes you can. Todays loan institutions make
credit available to people whose credit is less then steller. Credit requirements have
loosened to the point where almost anyone can find a car loan. The lenders feel that
since the car is collateral against the loan there is little risk for them. Also if you
have poor credit the loan institutions charge a higher interest rate meaning they make
more of a spread on the money you borrow. To get the best deal for yourself you should
get a copy of your credit report for applying for any loans. Scrutinize your credit
report and make sure there are no mistakes. If you find something out of line make sure
it is corrected before your loan application is processed. The last thing you need when
faced with bad credit is to be penalized to a higher interest rate due to a mistake. It
is best that you know your credit score before visiting the dealer also. You are at a
disadvantage if the dealer learns more about your credit then you do. Armed with your
credit rating a shady dealer will jack up the price of the car thinking you will be so
pleased to be approved for the loan you won't know the difference. Make sure you do not
take out a loan that the length of term will have you upside down. This means that you
will owe more on the car then the car is worth. You should never finance a used car
beyond 48 months and a new car beyond 60 months. And those terms are the extreme. If you
can't afford the payment for a shorter term then you probably should be looking at a
lesser expensive car. It is also advantageous for you to secure the car loan face to face
rather then letting the dealer secure the financing. Dealers make money on financing
cars. They buy the money for a predetermined rate then sell it to you at a higher rate.
If you secure your own loan you will save some money. Also by meeting the loan officer
personally, you can explain why you have had trouble with your credit. If you explain an
illness, divorce, or temporary skip in employment was the cause they are more likely to
be understanding an cut you some slack on the interest rate. Know that you will pay 10 -
20 percent depending on how bad your credit is. Even though you can still get a car with
bad credit don't borrow money for a car if you are only make your own financial
situtation worse.
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