Buying Cars with Bad Credit
Being short of cash is not exactly a very exciting situation to be in. Even worse is when your credit report is not impressive, and you would not want anyone to look at it. Imagine a situation where your credit reports fail to impress the financial institutions. Your finances are on an all time low, and you want to buy a car. Wow! You might feel that it is a splendid recipe for a disaster. However, you do not need to despair. Where there is a will, there is a way! Take a look at what we have in store for you - buying cars with bad credit!
Purchasing Cars with Bad Credit
Taking Stock
If you do not have any idea as to how bad your financial situation is, how can you go ahead? So, first thing which needs to be done is, to take stock of how bad your credit is. Get your credit report and get to know exactly where you stand. It will help you decide about potential loans and will save you from financiers who might say that your credit is very bad. Having correct information about your credit will give you a chance to put your foot down and get loan on your terms. With regards to buying a car with bad credit, this is very crucial.
Find the Right People
Well, armed with a credit report, now you can first take a shot at your usual or current bank. If you have been a good and loyal customer with good banking practices, you never know. Your bank may be convinced to give you a requisite bad credit car loan. Another thing, which will add to your bank's inclination to give you the loan is, instances where you had taken a loan and had repaid it in time will definitely help you. In worst case scenario, your bank might not give you the loan. No problems. You still have a chance. Find out dealerships which particularly deal with buyers with bad credit. They will definitely ask for a higher interest rate, but will give you the loan. So, your query of can I buy a car with bad credit is partly sorted out here! In relation to new car buying advice, this is a very important factor.
Multiple Options
Look out for as many financiers who are willing to provide a loan with interest corresponding your budget and your credit report. You will certainly get a good deal at some point of time. Also keep in mind that your credit report is going to change. Taking that factor into account will help you make better choices.
All these things are very important when buying cars with bad credit. However, opposed to these, there are a few things you have to watch for, be it buying new cars or buying used cars with bad credit.
Precautions while Buying car with Bad Credit
Point 1
Never ever, ever drive off home with your car, before being sure about the car financing terms. Ensure that you take the possession only after a binding agreement is done. Do not take the car home if the financing is done by the end of the day. Sometimes car dealers ask you to sign a financing agreement, saying its subject to final approval instead of a binding deal. This gives the dealer a chance, after giving you the possession, to call you up the next day and say that the financing was not approved. When you go back the next day, you are slapped with a higher interest than expected. Beware of such tricks. It can be a big bad world out there.
Point 2
Whether you are buying cars with bad credit or buying a car with bad credit and no money down, avoid relying on the dealer blindly. In fact, just get rid of the dealer factor while purchasing a car with bad credit. These dealers will ask for some amount of the deals they help to work out, which is why he will make sure that the loan is hard on your pockets. It will be costlier than you yourself contacting the financial institution and taking a loan.
Point 3
Be careful when buying cars about penalties. Confirm that there is no prepayment penalty in your contract. It actually is based on how bad your credit is, when you decide whether to go or avoid prepayment penalties.
Point 4
Staying away from extras like extended warranties and gap insurance and credit life policies will further reduce the risk of buying cars with bad credit. The buyer's duty is to woo you into taking these things, but it is not mandatory to take advantage of these things. This applies to the situation where you have to lease a car with bad credit.
Finally, make sure that your car loan interest is pre-calculated and stay away from verbal assurances, get them on paper. Ensure everything regarding the contract and the paperwork is clean. It is always better rather than repenting later, when it comes to buying cars with bad credit. This is where I sign off. Take good care of your money!
