Top Suggestions for Auto Shoppers with Bad Credit
If you’re one of the millions of Americans with bad credit, you might be wondering if you’ll ever be able to finance the purchase of a used car. The first thing you need to realize is that you needn’t despair. Many lenders have various kinds of bad credit auto loans that can get you into a car whatever your situation may be. But there are lots of things you can do make it easier on yourself. Below you’ll find our top suggestions for customers with bad credit, which are based on our actual experiences working directly with challenged credit customers for years. We want to help you avoid these mistakes!
1. Save up for a bigger down payment. Saving money is hard, no doubt about it. But if you can find little ways to save some money each week, you’ll quickly have enough to make a substantial down payment on the car you want, which means you’ll need to finance less of its price. If you eat out a lot, skip one of those meals out here and there and cook at home instead, putting that eating out money into your car savings. If you can discipline yourself to forego a few such pleasures on a regular basis, you’ll be well on your way. When you feel like making an impulse purchase, whatever it may be, force yourself to stop and instead of buying that item, put that amount of money into your car savings. If you can make saving more of a habit, you’ll be impressed with how quickly it adds up into a nice big down payment on a used car. And that bigger down payment comes with extra perks: It’ll be easier to find a lender, you might get a better interest rate, you can opt for a better vehicle that will give you more value, and your monthly payment will be more affordable. Clearly, a bigger down payment is a win-win.
2. Shop for a used car you can actually afford. You must resist the temptation to fall in love with a car that’s going to cost you more than you can afford. Take a long hard look at your monthly budget and figure out what kind of payment will actually work for you given all your other commitments. If you visit a dealership that tries to pressure you into looking at cars out of your price range, walk away. Any dealership that uses high-pressure sales tactics doesn’t deserve your business. At Auto City, we follow the customer’s lead. We don’t push and we don’t try to upsell. To us, that’s just the basics of treating all customers with the respect they deserve.
3. Do things that help your credit score recover. You simply must make bill payments on time, every time, even if it hurts. Every late payment is just another ding on your credit history that lowers your score further. If your credit is in really bad shape, try to at least pay something on each account every month by the due date to show you’re making an attempt to improve things. And don’t forget to factor in the cost of maintenance into your budget, because every car needs to be properly maintained if it’s going to last. When you already have bad credit, the worst thing you can do is wind up with a car you can’t afford and end up having it repossessed.
4. Buy a used car that stands up well over time. You’ll be much better off in the long run if you focus on used cars that are reliable, don’t have too many miles on them, and are known for having lower overall maintenance and repair costs. You can easily do some Internet research at any of the big car sites such as Edmunds to find out which cars do the best over time. You can also stop by Auto City and talk to us – we know used cars like no one else and would be happy to advise you about which cars are the best.
5. When you do have problems, talk to your lender. Once you’ve secured a used car, if you do run into problems making your payments, don’t just suffer in silence. Be up-front and honest with your lender about what’s going on. The last thing any lender wants to do is go through the hassle of repossessing a car, and most will do what they can to help.
6. Purchase a Service Contract and GAP Insurance if it Makes Sense. One things we’ve seen happen is this: A person with bad credit gets a used car, but then gets hit with a major repair bill they simply can’t afford. The car is repossessed and the customer is back at square one. This is when it might make a lot of sense to protect your purchase with a service contract and/or GAP insurance, so you’re covered when something unexpected happens.
Even if your credit is challenged, there are plenty of lenders out there who will compete with each other to give you a bad credit car loan. At Auto City in El Cajon, we have a network that includes some of the top lenders in the industry. We can and will help! To learn more about how we deal with challenged credit please check out our blog post: Bad Credit Car Loans at Auto City. If you are ready to apply, please submit a quick application on the challenged credit page.