When you need to buy a car, it can be intimidating enough with good credit. However, with defaulted credit cards, repossessions, or bankruptcies, it can be a nightmare. Dealerships are notorious for high pressure tactics which result in higher finance fees and extra warranties or insurances. Those with poor credit are even more vulnerable because they believe that they must take whatever they can get.
The bottom line is that you are the one looking to spend money and, therefore, have the power. There are ways to buy a car with bad credit so don’t let pushy sales persons dictate how you should spend it.
Obtain and Review Your Credit Report
This is always the first step when it comes to dealing with lenders. The bottom line is that your credit report and credit score is what they will look at and make a decision by, regardless of all the hard time stories you tell.
Determine your credit score from your credit report. The rule of thumb is that a score above 700 is excellent, 600 to 700 is average and anything below 600 is considered bad. Knowing your credit score is important because it gives you additional negotiating knowledge to keep from being ripped off by shady car dealerships. However, if you have a score below 600, be prepared to pay approximately 15% to 17% in interest rates for a bad credit car loan.
Seek Bank Financing First
When wanting to buy a car, it is always best to deal directly with a banking institution and secure a loan from them. You can avoid a great deal of hidden and pressured expenses which car salesmen like to tack on by getting your loan directly from a bank and there are numerous banks which deal with subprime borrowers.
Getting a loan from a bank also gives you greater power for negotiating a car deal. First of all, you know exactly how much you have to spend and you can by-pass all the extras such as trade-in credits, extended warranties and credit insurance. You can also sidestep various scams which dealerships use when “secretly” conferring with their banks.
Also, keep in mind that once you’ve made on-time payments for 6-12 months, you can refinance your loan to a more reasonable interest rate.
Clean Up Your Credit Report
It’s advisable to clean up your credit report before seeking to buy a car with bad credit. Many negative items on your credit report can be completely eliminated which will improve your report and, thus, better your chances at getting larger loans at lower interest rates.
Contact us at repair-credit-today.com for professional assistance to raise your credit score.