If you need to purchase another vehicle but you do not have the money to buy one outright with cash, you will need to obtain an auto loan. However, if you have less-than-perfect credit, you might have some trouble if you are not aware of the following tips.
Save Up For Your Down Payment
Sure, you might have seen some advertisements for auto loans that do not require much of anything for a down payment. However, those down payment deals are generally reserved for those who have an excellent credit score. When your credit is bad, you will need to go to the dealership with as much money as possible for your down payment. The more money you have to put down, the less the amount you are asking to be financed, which may make it easier for the loan company to approve your loan request. Also, the bigger down payment shows the lender that you are serious about this financial commitment, which in their eyes, may mean that you are less likely to default on the loan because you have so much money tied into it.
Look For A Co-Signer
If your credit is a little too rocky, the lender might ask for you to have a co-signer. This would be a friend or relative that will use their good credit standing to help get you approved for the auto loan. His or her name will be on the loan, along with yours, so it is important to make sure that you are going to be able to make your monthly payments on time. You would not want to damage the good credit standing of your friend or family member. Once you have established a good payment history and your credit score has increased, you may be able to refinance the auto loan. This way, you could have the co-signer removed from the loan.
Go To A Bad Credit Car Lot
There are some car lots, like AutoStart, that specialize in working with individuals with a poor credit standing. They may be more willing to work with you, and they might know of some lenders that are more flexible with their guidelines in terms of who they will finance and who they turn away. This type of help could save you a lot of time and frustration.
Make sure that you are making use of the previously mentioned tips, and you should be on the road in no time.
Share18 May 2017
After going to my first auto auction, I became very interested in how dealers select the cars they're going to put on their lots. I spent a lot of time talking with local dealers, auction regulars, and others in the industry to learn the behind-the-scenes secrets to picking out the perfect auction cars and getting them lot-ready. I created this site to help others understand what goes into the process in the hopes that it would help car buyers understand what they're looking at when they hit the car lot. I hope the information here helps you better prepare for buying your next car.