Purchasing a car is stressful for any individual, even those with exemplary credit. So, as you can imagine, purchasing a vehicle thinking that you are going to struggle for approval for financing may seem undesirable to say the least. Maybe you’re under the impression that you will struggle to secure financing for a new vehicle due to the fact that you have poor credit. Whatever the case may be, it’s important to know that there are auto loans with bad credit that are available to drivers all around the country. And getting approved for financing with bad credit doesn’t mean that you lose any control of the car buying process. Ultimately, it’s your money, your investment, and your vehicle…you should be in control throughout the entire process. Here we’ll discuss the top myths of purchasing a vehicle with an auto loan with bad credit and provide industry-leading advice for entering the car-buying process with little to no credit.
The Top MYTHS When Shopping for an Auto Loan with Bad Credit:
Preconceptions are natural, and when it comes to purchasing a vehicle with bad credit drivers have many fears. In fact, many drivers are so concerned about trying to secure an auto loan with bad credit that they avoid dealerships and online vehicle providers completely, opting for the more risky private sale. Here are some of the top myths surrounding the process of purchasing a vehicle with bad credit:
- Pressure and Gimmicks
- Less-Than-Desirable Loan Agreement
- Limited Options
- Unnecessary Extra Fees
While we can’t speak for every dealership, the majority of reputable car dealerships and online services strive to offer high-quality vehicles to customers of all credit types, and a pleasant car-buying experience. And when we take a second to think about it, this makes the most sense! Dealerships want positive reviews, return customers, and drivers to end up choosing their company to do business with. They want the sale and will cater to your needs as best they can. While there are untrustworthy dealerships that may take advantage of their customers in an effort to close a sale, this strategy does not lead to long-term success. Consequently, you’re likely to find a dependable dealership that will provide excellent customer service, flexible financing options, an extensive inventory, and an enjoyable car-buying process.
Auto Loan with Bad Credit: An Overview
If you’re in the situation where you’ve been declined by traditional lenders due to the fact that your credit is less-than-perfect, you know that it’s a difficult thing to deal with. Customers all over the United States end up resorting to purchasing unsafe vehicles from neighbors, Craigslist, or Facebook Marketplace, without any real idea of the vehicles’ prior history. This is undoubtedly risky, and a major gamble to say the least. However, these customers typically feel like they have “no other options.”
Well, many dealerships would beg to differ and offer programs that will assist customers like you. Most of these dealerships will be forthcoming with the information and minute details of their particular program to ensure that you get the best possible price, rates, and service.
However, it is important to avoid less than reputable dealerships that may pressure you into accepting a loan with terms that you don’t particularly agree with. However, in situations like that, it’s important to remember that you, as the customer, are in the driver’s seat. Checking out a dealership that offers all of their services online, including vehicle purchase and financing, can be an excellent solution for drivers who are hesitant to come across an untrustworthy dealership. Online dealerships are built for customer convenience and can save you from the hassles that come with visiting your local dealership.
When really delving into the issues that surround auto loans with bad credit, it can be easy to see why many customers would consider purchasing a “beater” car from a third-party. However, heed our advice and you’ll find success at the end of the entire process.
The Truth: Higher Interest Rates
Whether you’re going to take advantage of in-house financing available at a local dealership or opt for a traditional auto loan with bad credit, it’s important to know up front that you will likely end up with a high-interest rate. This is due to the fact that the dealership or bank is assuming the risk of financing those who have questionable credit histories. At the end of the day, neither the dealership or bank is trying to make money off of the customers, rather, they need to charge the interest to ensure that they don’t lose money if a customer can no longer make payments on their vehicle. It’s frustrating and difficult to understand when you’re trying to purchase a vehicle and you know that you’ll be faithfully making the payments to the dealership each month. But unfortunately, it comes with the territory, here.
Ultimately, it’s more important to have a safe and reliable vehicle, than to drive a questionable one. Additionally, if you’re making regular payments on your vehicle, you’ll begin to see your credit score improve with time. This is an excellent step for those who may feel helpless or drained by the entire process. While you may face a higher interest rate and longer loan agreement, you’ll be getting into the car you need.
Our Suggestions for Shopping for an Auto Loan with Bad Credit:
Of course, there are a few things you can do to improve the car-buying process when you are aware of your poor credit. If you walk into the dealership prepared, you’ll be on your way out of the dealership with your new car all the sooner. Here are a few things that will expedite the whole process and make securing an auto loan with bad credit even easier:
- Find a co-signer
- Know your credit score
- Have a set monthly budget
- Explore your options and shop around
- Make a larger down payment
- Trade-in your current vehicle
- Have employment verification, insurance information, and any necessary personal information handy
Whether you plan on visiting your local dealership or utilizing an online service, these tips are sure to enhance your purchasing experience.
Finding Auto Loans with Bad Credit
If you have bad credit and are worried about securing the financing you need for your next vehicle, don’t be! Auto loan approval with bad credit is possible and can be less stressful than you anticipate. Today, technology and convenience go hand-in-hand. There are several online services that will allow you to search for vehicles, get pre-approved for financing, and even complete your financing and purchasing online. So, if this advice still hasn’t eased your worries about purchasing a vehicle with poor credit from your local dealership, stay home and get pre-approved from one of these convenient sites.
Ultimately, you’re going to want to accept the loan and the rates that best fit your life and needs. When shopping for an auto loan with bad credit, you want to ensure that you’re aware of all of the potential issues you may encounter along the way to make the entire process as simple and easy as possible. Knowledge is power, especially when it comes to auto loans with bad credit.