What Car Buying Options do you Have for Bad Credit?
It can be downright impossible to get a competitive quote and find the vehicle you want when
you’re shopping around with bad credit. While bad credit can certainly complicate the car-buying
process, it doesn’t make it an impossible feat.
Knowing your available options, where to start, and how to navigate the car-buying process can
significantly help you increase the chances of getting behind the wheel of a vehicle you love
even if you have bad credit. Read on to learn more about your car-buying options if your credit
score and credit history are less than optimal.
Get a Cosigner
Start by asking a family member who understands your financial circumstances if they are
willing to be a cosigner on your auto loan. Having someone like a parent or sibling who has
good credit cosign on your loan will help you secure the loan you need at a competitive rate.
This is because the lender will look at your co-signer’s credit history to determine eligibility and
will help give the lender assurance that the loan will be repaid. It’s important to remember
however that if you do work with a cosigner, you take your loan payments seriously. If you
default on payment the responsibility will fall on the cosigner.
Save up a Hefty Down Payment
If you struggle with bad credit and are cautious about taking out another loan, saving up a hefty
down payment can be a great alternative. Not only will a large down payment reduce the overall
amount of the loan you need to take out, but it can also give your lender assurance that you’ll be
able to pay back the loan.
Work with a Community Bank or Local Credit Union
Community banks including local credit unions are more understanding and committed to
working with individuals when it comes to taking out loans. This is largely because these
institutions value relationship building and will look at your loan application from a human
perspective. If you are someone who struggles with bad credit but has a good history of
repayment on bills Including rental or mortgage bills as well as other loans, this can work in your
favor when you work with a smaller Institution.
Consider a Buy Here Pay Here Program
Buy Here Pay Here programs have been growing in popularity across the nation over the past
couple of years. These types of programs are designed to help drivers who struggle with no
credit or bad credit get behind the wheel of the vehicle they love. A Buy Here Pay Here program
allows you to work with a dealership’s finance department directly instead of securing a loan
from an outside lender. A dealer’s finance experts will determine your credit trustworthiness,
your loan eligibility, and a budget that best suits your financial circumstances in order to help
you get behind the wheel of a vehicle you want.
One of the best parts about a Buy Here Pay Here program is that they enable you to rebuild
your credit. Loan repayments are reflected on credit reports and can help you rebuild your credit
score so that you can qualify for better loans in the future. For many shoppers, these types of
programs have been game changers.
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