5 Tips for Buying a Car with Bad Credit

The purchase of a car is nothing to take lightly. It's often thought of as the second most important purchase a person makes. Many people have different reasons for purchasing a new car. Sometimes it's a want, and sometimes it's out of necessity. If you're in need of a new vehicle but have bad credit, you might be worried about whether or not you'll be approved for financing. While it can be scary to get friendly with your credit score, it's definitely important and will help you as you navigate the road to finding the right dealership to help you.

Here are five tips for buying a car with bad credit:

1. Don't Ignore Your Credit Score

Unless you've had perfect credit your entire life, we've all been there. Looking at your credit score can be scary, especially if you've been ignoring it, and have no idea what that number is. It's so important to monitor your credit score. You won't be able to get a loan for a home or a car without knowing those numbers. 

Take advantage of your three free annual credit score reports from all three major reporting bureaus. This will at least let you know where you're at financially, and where you stand with your credit score. If your score is 599 or lower, you'll do best to find dealerships that specialize in bad credit car loans.

2. Decide What Type of Vehicle You Need

If you have credit issues, you may need to seriously think about need versus want when it comes to the purchase of a newer vehicle. Are you going to be the one primarily driving the car? What types of features do you need the car to have? Do you have kids or pets? Do you do a lot of highway travel? Factor in safety features, gas mileage, etc. What will suit your personal or family needs and give you the most bang for your buck? If you don't have to have the newest of models, be content to look at older models that still have the features you're looking for.

3. Save for a Down Payment.

When you have less than perfect credit, having a nice little down payment can really make a difference on what's available for financing when you're being approved for a loan. Being able to offer between 10-20% on the purchase price of a vehicle is pretty standard. The more you can offer upfront, the better off you'll be when it comes time to negotiate financing and payments.

4. Think About APR & Not Just Low Monthly Payments

Everyone wants a low monthly payment when they've purchased a new or used car. There are other things you'll want to consider besides just the monthly payment. What are the terms of the loan and what's the APR? You really want the least amount of interest over the shortest period of time possible. 36-48 months for the loan and payment period is fairly standard.

5. Find a Dealership that Specializes in Helping Those with Bad Credit

If you don't know where to start or have struck out when it comes to finding financing, it might be time to find a trustworthy car dealership that helps folks with bad credit. Sometimes people tend to be leery of dealerships that specialize in bad credit financing, but the truth is, these types of dealerships are staffed with knowledgeable team members who truly want to help put people in the right cars that suit their needs.

Everyone deserves to have a safe, reliable vehicle. Knowing where to start in the car buying journey is the key, even when bad credit seems to be looming overhead. Don't let it stand in your way. There are wonderful dealerships who are ready and able to lend a helping hand.

This post brought to you by MRed.

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