Advice for Used Car Shoppers with Bad Credit

March 15th, 2017 by
bad credit financing

While having bad credit is a problem and can narrow your financing options, it doesn’t have to stand in your way of purchasing a car. If you are one of the millions of Americans with bad credit, you could be wondering what it will take for you to purchase a used car and if you’ll ever be able to finance the purchase


The good news is, there are many lenders out there who finance bad credit and want your business. You shouldn’t despair or fear that you will be stuck taking the city bus until you get good credit. In fact, far from the truth! Many lenders, in fact, have various kinds of bad credit auto loans that can get you into a new ride despite your current financial situation. In addition, there are many types of things you can do make it easier on yourself as well. The following suggestions below are top pieces of advice for used car shoppers who have challenged or bad credit. These suggestions are actually based on real experiences of people with bad credit who worked closely with us over the past years. We have been offering challenged credit customers options for several years and you might just be our next customer. Hopefully, these pieces of advice help make the process easier on you so you don’t wind up making big mistakes that could have ultimately been avoided.

Do Whatever You Can to Put Down a Large Down Payment

This may be easier said than done especially if you are already struggling to pay your bills. But in the long run you will end up paying lower payments on your loan. Some used car loans for customers with bad credit can have extremely high interest rates so the more you can put down initially, the better off you’ll be. We do, however, understand that saving money is hard, no doubt about it. Whether you have a family and kids, are paying back your college loans, or simply don’t have that high paying dream job, there is always a reason why saving money can be very difficult. That said, 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 the total price. Your payments will be less and you’ll be more likely to start saving more money because your payments will be within your budget each month.

We all know that saving money is possible, but how? Some ideas on saving money including packing your lunch and taking it to work with you, try to do activities on the weekends with your kids that don’t cost a lot of money such as outdoor playgrounds or petting zoos. If you eat out a lot, skip one of those meals out here and there and cook at home instead. When you put that eating out money into your car savings, you’ll be surprised just how quickly the money adds up. Yes, even if you stop at fast food locations for a burger and fries a couple times a week, that extra $15 a week can add up to the down payment of your dream car.

If you can discipline yourself to forego a few such pleasures on a regular basis, you’ll be well on your way. And, it will definitely be worth it! So if you get the urge to make an impulse purchase, whatever it may be, force yourself to stop and instead of buying that item, think about your financial goals, and instead put that amount of money into your car savings.

While you don’t want to skimp on things you actually need to survive, you do want to refrain from going overboard with your spending. That way, 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! For example, it will be much 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.

When Shopping for a Used Car, Look At Ones You Can Actually Afford

While it can be incredibly tempting to check out the latest sports car or luxury model on the lot, you must resist the temptation to fall in love with a car that’s going to cost you more than you can afford. By taking a long hard look at your monthly budget and figuring out what kind of payment will actually work for you given all your other commitments, you’ll easily be able to find a used car that fits your budget and needs. If you visit a dealership that tries to pressure you into looking at cars out of your price range, walk away. You are not obligated by any means to purchase a car just because a dealer spent time with you. You do not owe them anything. It is their job to give you the time of day and spend as much time as needed discussing the cars on the lot that you may be interested in. 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. We also promise not to haggle. We are a haggle free dealership because we would rather focus on getting the car you want instead of fighting about money.

Do Whatever You Can to Help Your Credit Score Get Better

It’s up to you now. You know your credit score isn’t great, so if you want it to get any better you need to do whatever you can to start making it healthy again. One of the ways to do this is by simply making every bill payment 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.

Buy a Reliable Used Car That Will Stand Up Well Over Time

In the long run, you’ll be much better off 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.

If You Run Into Financial Problems, Don’t Be Afraid to Voice Them to Your Lender

We all run into financial hardships sometimes. So once you’ve secured a used car, if you do run into problems making your payments, don’t just suffer in silence. Communication is key, so be open and honest with your lender about your situation. By being 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.

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 of banks that includes some of the top auto 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.