While everyone enjoys owning a new set of wheels, most people will tell you shopping for a car is a chore they’d rather avoid. Even when your credit score is top notch, bargaining with dealers makes the whole experience rather uncomfortable.
If you have poor credit, then the situation becomes a bit more complicated. But just because you have a poor credit score, it doesn’t mean you can’t buy a car or that the terms of the vehicle loans or your title loans in Las Vegas must break your monthly budget.
Here a few tips to help you get a car loan if you have bad credit.
Figure out Your Vehicular Needs
Since you have bad credit, you can expect that you’ll be paying a much higher APR. Therefore, you don’t want to buy a car that is larger than necessary or includes amenities that are unnecessary for you daily travels. Both things should be avoided as they usually translate to higher costs.
Also, if your family is large, or you have a job that requires you to transport all kinds of goods and services, you should ensure that your choice of a vehicle isn’t less than what you need. No one knows your transportation needs better than you, so make sure you have an idea of what exactly you want before you go to the dealership. This way you aren’t pressured into purchasing a vehicle that’ll only make your financial situation worse.
Set up a Budget
When making any large purchase, particularly one that involves monthly payments and long-term financing, creating a budget should take priority in your planning. Take advantage of an auto loan calculator to figure out the exact amount you can afford to spend on a vehicle and better estimate those payments. Check newspapers, auto buying magazines, dealer websites, and any other resource that’s available to get a better idea of the market value and actual cost of the vehicle you desire. This will help in ensuring that you don’t overpay.
You may also use the auto loan calculator to check out the costs at different length of terms. You’ll probably notice that longer contracts tend to equal smaller monthly payments. But because of the continued interest payments, you’ll end up paying more in the long run.
Know Your Credit Report
Develop the habit of checking your credit report as it can be vital to know what’s in it before you step foot in the car dealership or apply for a quick cash title loan. All the three major credit agencies are required by law to provide you with a free copy of your credit report annually.
If you’ve already gotten your yearly free copy, then you can purchase another one from the three major credit agencies. Always buy directly from them, so you’ll avoid any potential scams.
The information on your credit report together with an auto loan calculator can give you a better estimate of the type of terms you may qualify for, with that in mind, you can plan accordingly.
Stay within Your Price Range
If any additional charge is added to what you initially planned on paying, it will end up costing you a lot more in the long run as it continues to grow with those interest payments. And since a bad credit score will get you higher rates on a car loan, you may end up paying a whole lot. You created a budget for a reason, so make sure you stick with it.
Don’t Be Afraid of Negotiating
Negotiating may seem like an intimidating proposition to some people, but if you did the research, then you already know what the car is worth, and you know what you’re willing – and able – to pay. If the vehicle you want to purchase is out of your price range, do all you can to get it back in range.
If it’s in range already, try and see if you can get it lowered (but only if your research justifies it). Every bit you save now will go a long way in the end. Due to your bad credit score, negotiating the terms of your auto loan will probably not happen, but you can try with the purchase price so you should.
Look out for Add-On Services and Products
Most times, after you’ve agreed on loan terms and a purchase price, you’ll be offered all kinds of additional services and products just before signing the contract. And usually, these proposals were not included in the quoted price. If you agree to even one of them, the cost will then be added onto the already approved price which means it’ll be raising the total amount. Add to that the higher interest rates that come with a bad credit score, and those products could increase your monthly payments significantly. Make sure they fit into your original budget before agreeing to them.
Read the Contract
This is conventional wisdom that often goes unheeded. Don’t sign anything until after you’ve read it. If you’re uncomfortable for any reason, don’t sign it.