Have you had trouble securing financing for a car because of your bad credit score? It can seem like a hopeless endeavor sometimes, but there is hope! If you have bad credit, you can still finance a car. We’re going to go over some ways in which you can get a car even with bad credit, and some things to look out for so you don’t end up in a worse financial position. We know how complicated financing can get, and we want to provide you with a simple, straightforward explanation so you can make the best decision for your life. Let’s start with how to finance a car with a bad credit score.
Get Help from the Financing Staff at the Dealership
If you are looking to finance a car, the best place to start is at your dealership. Visit the financing staff and talk with them about your specific credit situation. The dealership financing team works with people of all different means and credit scores all of the time. This is their job. They have working relationships with the area’s banks, credit unions, and other lending institutions. They will be able to tell you where your loan options are, and even reach out and secure financing on your behalf. The dealership financing team is a valuable resource to use in your journey to finance a car with bad credit.
You can even visit multiple dealerships and see if the loan terms you are able to get varies at all. In all likelihood the terms of your different loan options will not vary all that much. When you have bad credit, your options become limited sometimes, and most lenders stick to a pretty rigid system of lending. Still, it doesn’t hurt to see if other dealerships can get you a better financing package if you think what are you getting is too high or the terms are poor. Always take the time to understand the terms of the loan. Sometimes the deals with the lowest monthly payments actually cost you more in the long run so be sure to carefully understand all of the terms before you make a decision.
Buy Here Pay Here Financing
If you spoke with your dealership financing team and you still couldn’t secure financing from a traditional lender, you can go to a buy here pay here dealership. This is a great option for individuals who have been turned away before and have bad credit scores. Buy here pay here dealerships simplify the financing process. Traditionally, you buy the car at the dealership, but you pay back a bank, credit union, or other lending institution for the car since they are the ones who actually buy it. At a buy here pay here dealership, the dealership acts as the lending institution too so everything is handled in-house. This allows the dealership to lend money to whoever they choose, and it also allows them to make a financing package that you can afford.
When you choose a buy here pay here dealership, the financing team in their dealership will work with you to determine how much you can afford to pay every month for your car, and the financing package you receive is customized especially for you. It is in everyone’s best interests if your monthly payments are affordable for your budget and are made on time. Therefore, you get a great financing deal that you can afford and a a great car. Another huge upside to buy here pay here financing is the rebuilding of poor credit.
Buy here pay here financing deals are made for people with bad credit, and the awesome part about them is they actually help rebuild credit too (as long as monthly payments are made on time). It is a great opportunity to get a car and turn around your credit score.
Find a Cosigner
Another option for people with bad credit is to find a cosigner for your auto loan. Having someone cosign with you will improve your loan terms significantly. It is important to note that the cosigner will be responsible for your debt if you cannot make the payments on your auto loan so it is a lot to ask somebody. If you can find a cosigner, it will make financing a breeze. The reason a cosigner helps so much is that it lowers the risk of the lender. Instead of having one person responsible for the sum of the loan, now there are two. Lending terms are all about risk. The more risk a lender has to take on, the more your monthly payments will be and the higher your interest rate too.
Things to Keep in Mind While Trying to Finance a Used Car
Applying for loans hurts your credit - This is true. When you apply for a loan your credit takes a slight hit. If you have bad credit, don’t apply for multiple loans all at once. This will hurt your credit score and could even keep you from getting a financing deal if your score drops too low as a result. Be patient and speak with your dealership’s financing staff before making any applications for financing.
Read the terms - Low monthly payments are great, but these financing packages often have terms that will cost you more in the long run. Sometimes it is better to choose a financing plan with a little bit higher monthly payment because the overall terms are more in your favor. Carefully go through all financing terms before you choose a plan, and remember, the lowest monthly payment plans are not always the cheapest!
When you are ready to buy a used car come to Eden Autos. We have a large selection of used cars, trucks, and SUVs. Our friendly financing team is ready to help you no matter what your credit score is. We also offer buy here pay here financing too! At Eden Autos we guarantee you can get a quality used car at a competitive price.