There are many ways to secure financing for a new vehicle. Having bad credit might make you feel like there aren’t a whole lot of options. Getting a new car with bad credit is not only possible, but it could also be a lot easier than you think. Still, there are a few things to keep an eye out for. Otherwise, you might not get the best deal.
Check Your Credit to See Where You’re At
First, before you finance a car, check your credit score. Whenever your credit isn’t the best, it’s tempting to avoid looking at it. Unlike what people often mistakenly believe, checking your credit won’t impact your score. By doing so, you’ll know what to expect afterward when you attempt to finance a car. So, take a look to see how things stand. Then, you can make a plan from there.
See If There Are Any Easy Ways to Boost Your Score
Simply making a few changes could boost your score fast. While checking your score, look for any delinquent accounts. Sometimes, getting rid of a few of those could boost your score by quite a bit. Disputing inaccurate accounts is another easy way to boost your score. Are there any loans you could pay off before attempting to finance a vehicle? If that is not in the budget at the moment, don’t worry, but doing so will increase your credit score. By improving your score a little, you could save a whole lot.
Save Up Some Money for a Down Payment
Next, if you’ve still got a fairly low score, a down payment could be necessary. It doesn’t have to be a ton. But, by saving a little bit, you can improve your odds for approval. See if you can pick up some extra hours. That way, you can set aside a little bit more money for a new vehicle. When you go to apply for financing, a down payment could make the difference. The bigger your down payment, the higher your odds of approval. Even $500 could make enough of a difference to obtain financing.
Use Your Old Car as a Trade-In
Are you already driving an older car? If so, then that could be used as part of your down payment. Right now, there’s a shortage of used vehicles on the market. As such, dealerships are paying a premium for anything that still runs. Anyone who has a car should check its value via Kelley Blue Book. You’d be surprised how much it might be worth. Plus, by using that equity, you won’t have to come up with nearly as much cash.
Submit a Few Applications
Finally, once you’re ready, it’s time to start submitting applications. When you are submitting them, make sure that all your information is accurate. Small missteps could lead to denial. Most of the time, when you fill out an application, you can say how much you’d like. Don’t ask for more than you can afford. Larger loans are much more difficult to get, especially with poor credit.
Ask for as much as you need to get something worth driving, but don’t ask for anymore. Additionally, you might want to submit applications to a few different places. One place might not approve, but that doesn’t mean you won’t be somewhere else. Submitting your applications at the same time is a good idea. That way, your hard inquiries won’t impact your odds of approval.
Compare Offers From Different Lenders
Finally, at this point, you should’ve heard from a few of the lenders. Some of them might not have approved you. But, with any luck, a few of them will send you a preapproval. Don’t rush to get a new car yet, though. Carefully look at the terms of each offer.
Lower payments don’t necessarily mean you’ll pay less. How long are the terms on each of the offers? What is the APR? Longer terms with lower payments could cost more in the long run as lower payments often come with more interest. Plus, you want to look at the interest rates. We’d suggest going with whatever provides the best return. In the end, paying a little more each month could save you thousands.
Getting a Car When You’ve Got Less Than Stellar Credit
Just because you don’t have a perfect credit score doesn’t mean that you can’t get a new car. By carefully managing your resources, you could be behind the wheel in no time. Follow the steps listed above, and you’ll find out whether you can get one. Of course, if you can improve your credit, it’s easier to get approval. But, even people with 500 credit scores can still score financing. With these tips, you can secure financing and drive away in your new vehicle!