Buying a car with bad credit
If you are like many people, you have probably thought about getting a car. For most of us it is an aspirational notion as we all dream of a new car and a better lifestyle. If you have been wondering about buying a car with bad credit history, you may be pleased to find that there are options available for you. The first thing you will want to determine is how much deposit do I need to get approved for a car with bad credit.
There are several lenders online that offer people looking for car finance the ability to access funds from their accounts without a deposit. This can be great for you if you are looking to get approved quickly. However, you need to be wary of the terms and conditions of these types of loans. Here is what you can expect.
High interest rates
The interest rates will be high. This is very common with sub prime lenders, so don’t expect to get some cheap rates. You will end up paying dearly for your purchase. Remember that you will not be able to deduct any interest payments from your taxes. It can be a good idea to put down a one-time payment, however if you can afford a larger down payment consider paying it upfront. The less money you pay in interest over the life of the loan, the less money you will have to repay when the car is paid off.
The monthly payments will also be high. They should not cost you more than ten percent of your monthly income, but they can be expensive. Lenders do not like to take a chance on people who have bad credit histories. That said, if you can manage a down payment on a car and make timely payments, you can save quite a bit of money.
Car dealerships often offer credit car loans. The terms will be set by the dealer and will probably be higher than what you would find at a local lender. It is not uncommon for dealers to charge as much as twenty percent above the value of the car. Do your homework carefully before signing on the dotted line. A car loan with poor credit rating is not the answer.
Look outside of the dealership
If you really want a car with bad credit, you should look to purchase it from an individual seller. It will be difficult to negotiate with a dealership and will likely result in you paying a higher interest rate. You can try to sell your car yourself using a classified ad or on an online auction website. It can take time to get the money together, but it will be worth the wait.
Fix your bad credit history
Do not despair. Buying a vehicle with bad credit history can still be done if you take some action steps. If you are determined to make this happen, make sure you do not fall into the same trap again. Check your credit report at least once a year and monitor your credit rating. It is not uncommon for mistakes and errors to occur, and you need to catch them as soon as possible to avoid further damage to your credit.
Do your research well
When you have found a car that you are interested in, research its price before making a major commitment. In addition, be sure to get all information regarding payments, including interest rates, early in the transaction. You can save yourself a lot of money by negotiating with your lender to extend the terms of the loan. In the end, it may be worth it to pay a little more for a car with bad credit. Just keep in mind that it will require some extra work on your part to get it paid off quickly and in full.