#buying a car with bad credit
Buying a New Car With Bad Credit
Purchasing a new car is one of life s most exciting moments. As a teenager you dream about buying a car to impress friends. Then life happens. You run into some bad luck, you are unemployed for several months and you get behind on your bills. Although you may think your dream of buying a new car is gone forever, you may be surprised to find out the subprime market is thriving. Bad credit may mean a higher interest rate, but only the lowest credit scores will have trouble finding a loan.
Benefits of Buying a New Car
What are the benefits of buying a new car instead of a cheaper used car? Most important is the savings in costly car repairs. Used cars often have serious problems that could require hundreds of dollars in repairs. A new car will give you a reliable ride with a warranty to cover possible problems. New cars also provide better collateral when searching for a loan. In the event you can t make your payments, the lender will be able to get their money back.
Preparing for a New Car Loan
Now that you know the benefits of buying a new car instead of a used car, think about how you can prepare in advance to get approved even with bad credit.
- Check your credit score and take care of risk factors.
- Save copies of at least a month’s worth of pay check stubs.
- Bring a copy of electric bill, cable bill, or cell phone bill to prove residence.
- Make sure you have your driver s license.
- Provide at three personal references.
Finally, get pre-approved. Not only will you feel less stress when approaching the sales people at the dealership, but you will also know before you begin shopping how much you are approved for, how much you can afford, and how much you should spend.
Dealerships Helping Bad Credit Consumers
Many manufacturers and dealerships are willing to help new car buyers who also have bad credit. Mitsubishi and Chrysler are just two popular car manufacturers known to help those with less than perfect credit. Make sure you shop around to find a good deal on a new car for a price you can also afford.
Although you may have to pay more for a new car if you have bad credit, if you make your payments on-time you will also build your credit history. Be prepared to pay a higher interest rate, possibly as high as 18% depending on your credit and down payment. Find a car that is reliable and affordable and enjoy your reality of owning a new car and impressing your family and friends.