bad credit car finance

Getting An Auto Loan If You Have Bad Credit

There are lenders that get why people may have bad credit and offer credit terms to those with less than excellent credit history.  It’s just a different kind of loan to them and no emotions are attached. In this article, we’ll go through what you should know if your credit history is not great. The situation isn’t that bad!

The first thing you’ll find is that many lenders specializing in poor credit loans want to sell you a new vehicle. We know this is counter-intuitive, wouldn’t a pre-owned car make more sense? Nope. From the lender’s perspective, a new car has more value and therefore offers more money that may be reclaimed if the buyer defaults on their loan. The lender also has the assurance that a new car buyer will keep up with payments because there likely won’t be any “surprise” car repair fees. 

If you want to purchase a new car soon yet have marginal credit, it is not a bad idea to start planning for that purchase. Start by checking out your credit report to see how it would look to a lender. You can get free credit reports from many online companies. www.creditkarma.com is a big one and they give you one complimentary report a year on each of the three big credit reporting agencies. The Sales manager at McLoughlin Chevrolet, a full-service car dealer in Milwaukee, OR, has provided us with this useful tip!

By the way, if your credit isn’t sparkling, you’ll likely be paying a higher interest rate than those with super clean credit. With that said, some lenders offer lower rates than others so shop around. To find out which lenders might be willing to finance people with poor credit, search for “poor credit loans” or a similar phrase on Google. You will find quite a few lenders and dealers in your local area that offer that service.  

Next step is to select a dealership and see rates they have to offer. It’s not a bad idea to find a vehicle that meets your needs in a dealership’s inventory and then inquire about the loan rate they can offer you.  Have fun and spend some time looking at what cars and rates various dealers offer.   

Once you have find an appealing car, the next step is to visit the dealership and check it out.  When you go in, be prepared to discuss the financing.  It may not be a bad idea to bring personal documents, like a most recent pay stub, a utility bill and a driver’s license to establish who you are.

Assuming everything works out, you should be able to drive away in your new vehicle in just a few hours. The great news is that if you keep up with payments, you will establish a new credit history that will get rid of your old, poor credit. Not everyone has great credit, and those people who don’t can almost become new people through new credit histories!