If you have bad credit but need to buy a car you should consider getting pre-approved before you shop. Doing so will save time and money. Plus, you can spend your time trying to get the best price rather than worrying about financing your car.
Why You Should Get Pre-approved Before You Shop For You Car
I can you tell you from personal experience that getting a lender to give you check before you buy a car is the better way to go. Here is an example of what can happen if you don’t get pre-approved. I went to an auto dealer without a pre-approval, blank check nor good credit. So when I informed the car salesmen of unfortunate situation he had me apply for a loan through his finance company. Well low and behold they approved me for a loan but at 18%! Granted they didn’t ask for a large down payment, which is common when you try to buy a car while having bad credit but they financed a car that put me upside down. In other words, they give me a loan in which the payoff was more that the car if worth. Way more. I did end up paying the car off in full but let me tell you it was quite painful to do so.
The flip side to this story is I did get a auto loan company to approve me upfront and provide me with a blank check for me to buy my next car. Having that blank check put me and a much better position to buy because my loan terms where much more favorable and I was in a better position to negotiate a better price the car. You can expect the same treatment if you walk into a dealer with a blank check. As the saying goes “Money Talks BS Walks”.
Start By Finding A Good Bad Credit Auto Lender.
There are plenty of auto loan companies that will finance people with good and bad credit. A quick Google search will reveal a plenty to choose from. This is a good thing because you can compare loan offers from the auto finance companies that interest you. Be sure to look for the loan interest rate. The interest rate will tend to be higher for those with bad credit and lower for people with good credit so keep that in mind. Also check the APR or Annual Percentage Rate. This rate is very important because it will tell you how much you will pay out once you pay off your loan. This is how I determined that I was upside down on my first auto loan. Beware to the it is common practice for sub prime auto lender the give you a loan that will cost more the car is worth. Also be sure to check out any other fees included in the loan.
Use the Internet To Get Multiple Auto Loan Offers
Many if not all car financing companies have online applications that make applying for a auto loan a snap. There are even online companies that will take you online application and produce offers from several auto loan companies for you to choose from. As a result, it is quite possible to receive an pre-approval or even a blank check in less than a week.
In closing, I just want to point out that even thought the economy is moving at a snail’s pace, this is the best time to buy a car even with bad credit. Many car companies are struggling to be profitable so they are doing whatever they can to get people in cars. Also, auto loan companies are following suite to get more people approved. So if you are thinking of buying a car but you think you credit isn’t good enough, think again. Chances are you can get financed for a car. Just make sure you get that blank check first.