Cars are an incredibly important part of American life. If you don’t live in a larger city, you almost certainly need a car to get around. Unfortunately, poor credit can make it very hard to finance a car. The good news, though, is that you can follow these five tips in order to buy a car even with a low credit score.
Work with a Low-Credit Lender
The first place to look for financing is going to be with a lender who specializes in loans to those who have similar credit scores to your own. While many of these lenders offer higher interest rates, they are more likely to give you the car loan you need. If you’re able to make your payments on time, you can leverage your improved credit score to refinance later on in the life of your loan.
Put Down More Money
One of the best ways to get a car loan even if you have a bad credit score is to make sure that you put more money down. Many would recommend that those with a low credit score try to put down at least ten percent of the price of the car – this can help to present a case to lenders that your past payment history doesn’t have too much bearing on your current financial circumstances.
Look at Lower-Priced Options
While cars might cost more than in years past, that doesn’t mean that there aren’t some affordable options out there for those who have lower credit scores. It’s generally much easier to get a loan for a lower amount, so try to keep yourself to a strict budget when car shopping.
Another good way to get financing is to look into getting pre-approved before you buy a car. Not only will this help you to save money during the car-buying process, but it will give you a better idea of what financing options are right for you. A pre-approved loan offer will often also have a lower interest rate than those you’ll get at the dealership, making it even easier for you to buy a car.
Buy with Cash
Finally, be aware of the fact that you might have to buy a used car from a private seller for cash. While this might not be ideal, it is a foolproof way of ensuring that you’re able to get in a vehicle. Don’t be afraid to negotiate for a better price and always make sure that you’re getting a fair deal with one of these transactions.
While you might end up paying more, you can get a car loan with bad credit. Shop around, get pre-approved, and be ready to spend some cash before you buy. If you can do a little research, you’ll find a buying option that is right for you.