Buying a car is one of the biggest investments you’ll make as a consumer. It is important that you choose wisely, set a budget, and stick to it. But what if you are one of the millions of Americans that have bad credit? Having bad credit can really put a damper on buying a new car, but don’t lose hope. There are ways you can set yourself up for success and drive off in a perfectly awesome new or used car.
5 Tips for Buying a Car With Bad Credit
Buying a car should be a joyous time. But with no credit, poor or bad credit, shopping for a car can get stressful really quickly. We’re here to remind you don’t have to sweat it. Avoid the financial stressors and make the car buying process a much smoother experience by following these 5 tips to buying a car with bad credit.
- Find a Dealership With Flexible Credit Requirements – The real trick to buying a car when you have bad credit is to find a dealership that will take on the risk. Some dealerships will consider bad credit a red flag. Fortunately, there are thousands of car dealerships out there that will work with first-time car buyers that don’t have established credit, or those that are still trying to improve upon their low credit score. Look for a dealership that offers in-house financing. They tend to be more relaxed with their credit requirements. An easy way of finding the right dealership for you is to check new and used car dealership networks. You’ll be able to see customer reviews, ratings, and policies.
- Check Current Interest Rates – Now that you have narrowed your search for dealerships that will work with you, it’s time to get familiarized with the latest auto loan interest rates. Obviously, you’ll pay a higher interest rate because of your poor credit, but that doesn’t mean you shouldn’t stay informed on what number is fair. Remember that your loan rate will impact the purchase price of the vehicle, as well as your monthly payments. Beware of dealerships that offer you an interest rate that is more than double the number you came up with.
- Skip the Bells & Whistles – Because you can’t get approved for a high loan amount, it also means you won’t be able to buy the car of your dreams. Compromise is key here. While having a sunroof, onboard computer, navigation, and a stellar stereo might be what you’re wanting, try not to set your expectations too high. Sacrificing a few creature comforts will make buying a car with bad credit a lot less stressful. You can still get a beautiful car, but it may not come equipped with the latest technologies.
- Set a Budget, & Stick to It! – Budget is very important when shopping for a new or used car, bad credit or not. This goes hand-in-hand with foregoing some of the bells and whistles. You won’t want to get in over your head and have car payments that are too high for you to afford. Not only will you damage your credit further if you fall behind on payments, but you may lose the car to repossession in the end anyhow. Setting a monthly car payment budget you can afford, and sticking to it, will help you rebuild your credit and have you cruising worry-free.
- Make a Down Payment or Trade-In Your Current Vehicle – If you have bad credit, avoiding debt at all costs is supremely important. Reducing the amount of the car loan may give your lender added incentive to approve the loan. This can be accomplished by trading in your older vehicle to shave some money off the overall cost of the car you’re trying to buy. Depending on the condition of your previous vehicle, it may not be worth it to trade it in. In this instance, you’ll want to save up and make a down payment to bring the loan amount down and your monthly payments. If the dealership won’t give you a good price on your existing car, you can always opt to sell it privately, then use those monies toward the downpayment of your new car.
*Pro Tip: Pay Your Car Loan on Time Every Month – We can’t stress this enough. Making on-time payments is a ‘must’ for individuals with bad credit. Falling further behind will likely ruin your chances of repairing your credit for years to come. Your payment history accounts for more than a third of your FICO score. On the positive side of the coin, if you keep up on payments your credit score will continue to go up. Then your auto loan turns into an effective tool to repair your credit and boost your credit score.
Hawthorne Auto Square Updated Coronavirus (COVID-19) Policies
As part of our goal to keep our environment clear of COVID-19, we have implemented enhanced sanitizing and social distancing procedures as recommended by the CDC. We have hand sanitizer throughout the dealership for customer and employee use. All of our sales team and staff are required to wear masks, per Los Angeles County’s new order. Hawthorne Auto Square offers a large inventory of used cars, minivans, trucks, and SUVs, as well as a premium inventory of high-end vehicles. Visit our “buy here, pay here” dealership for help finding the vehicle you want and need.
To learn more about our wide selection of used vehicles, trade-in your vehicle, schedule a test drive, and view our latest inventory, call 866-707-7664 or visit our dealership at 11646 Prairie Ave. in Hawthorne.