88% of Americans claim to own a vehicle. That number is immense but not surprising. After all, we all know the value that car ownership can bring to one’s life.
That’s probably why you’re in a pickle right now.
You need a car to get to and from work, school, and appointments but you don’t have the credit to buy a car. You’ve stopped into a number of banks and credit unions and they’ve all said, “…we don’t do bad credit car financing.”
Believe it or not, your story is a common one. Fortunately, many people with worst credit than you have managed to work their way out of this pinch and have gotten themselves behind the wheel.
Here are some tips on how you can do the same thing!
1. Visit Dealerships in Poor Areas
If you’re shopping for a car in a nice part of town, chances are, local dealerships won’t cater to people that need bad credit car financing. These dealer’s lack of diverse credit experience limits their ability to present you with all of your options.
Rather than struggling through misinformation and a salesperson that may not respect your needs, consider looking into car lots in poorer areas.
Poorer area dealerships tend to have more credit-challenged clientele. Salespeople at these dealerships can point you towards lenders that have worked with their clients in the past. That may be all the advice that you need to drive a car home.
2. Look Into Buy Here Pay Here Dealerships
An increasing amount of dealerships are wanting to boost their profits by being their client’s lenders in addition to being their car salespeople. These dealerships advertise in search engines under key phrases like “buy here pay here near me” “easy used car financing” and the-like.
While buy here pay here dealerships do offer an easy path to vehicle ownership, be sure that you read all terms surrounding their loans carefully. Similar to payday loans, buy here pay here dealerships have developed a reputation of being predatory.
That’s not to say that all dealership financiers are bad. It’s just to say that doing your diligence, as always, is important when engaging these types of lenders.
3. Save Up a Larger Down Payment
How much money you ask for when seeking bad credit car financing is going to directly affect whether or not you get approved. So, if you can ask your lender for less money, your odds of getting that long-sought “yes” will skyrocket upwards.
A great way to reduce the burden that you’re putting on lenders is to bring more cash to the table during a car-buying deal. With a larger down payment, your remaining vehicle balance will be lower which will decrease the amount that you’ll have to pay for your car per month and instill more faith in your lender regarding your ability to meet your obligations.
4. Buy a Cheaper Vehicle
Don’t have the means to scrape together a larger down payment? An alternative way to bring down your lender’s financing burden without having to bring more money to the table is to request a cheaper car.
Just be careful when you’re shopping for bottom of the barrel car options. While buying a cheap vehicle today could lead to you driving a car off of the lot, you run a much higher risk of maintenance expenses which could make your bargain car too expensive to drive in the long run.
5. Look Into Government Options
Most people that are seeking bad credit car financing don’t know that many states offer that service with no profit incentive. These financing deals are put in place to boost local economies and to create less wealth disparity between people.
Not everybody can qualify for a state’s not-for-profit financing deals. In all cases that we’ve seen, government-run programs are reserved for people that live at or below the poverty line. Also, government-sponsored car loans are not available in all states.
You’ll have to look into what your area offers to see what your government options may be.
6. Get a Loan Co-Signer
Just like you can get a co-signer for a personal loan, you can also get a co-signer for a vehicle loan.
For the uninitiated, a co-signer is somebody with good credit that offers to back your loan in case you default. With this extra layer of protection for lenders, you will not only qualify for a car loan but might end up getting a relatively good one.
7. Start Working on Your Credit
The single best way to get a car loan is to not try to side-step the system and instead, try playing along. Doing that takes a commitment to rehabilitating your credit and time.
Start paying back your existing loans. Reduce the percentage of your “available credit” that you’re utilizing.
Those small credit-building steps can have a massive impact on your car purchase possibilities. They will also enable you to get better deals on houses, rent better apartments and much more!
Bad Credit Car Financing Is 100% Possible
Don’t let the rejections that you’ve faced regarding your bad credit car financing requests discourage you. There are many ways that you can get yourself into a good vehicle, some of which we’ve just shared with you.
Leverage whichever tips you think might best suit your unique needs. If you find yourself in need of more advice as you begin to visit dealerships, feel free to browse more car content on our blog!