There a few purchases in life more important that your car. Our automobiles are what get us from point A to point B, let us shop for our families, and get us to work every day so we can do all the things we need to do. In 2016 the average car price was $33,560, and if you’re like most people you probably don’t just have that kind of cash sitting in your bank account. Financing is the route that most people have to take when purchasing a big ticket item like a car, but what do you do if you have less than perfect or even bad credit? Here are four tips that can help you get approved and even help receive lower payments if your credit is less than the best.
Check your credit score
There are a number of free services that can monitor and check your credit score, and any accounts you may have outstanding. You may be able to dispute a few incorrect charges or find things that should have been cleared previously that may still be reporting. Knowing what your credit report looks like can be a vital tool
Improve your credit score
There are a variety of factors that go into determining your credit score. From the charges that we have from old accounts, to how much credit we have outstanding, and how much is used. If your credit score is far too low, focus on disputing incorrect charges or trying to settle. If your score is somewhere in the middle focus on clearing small debts because each account you clear improves your score. Allow up to thirty days for disputes and accounts to clear.
Find a dealer that will work with you
For the most part, if you’re getting financed then you are working with a dealer. Dealers, like, Mr. Ed at Earnhardt Auto Centers, generally have access to a variety of lenders who all have differing standards of what they will accept and what rates they will charge. In this instance having a substantial down payment (10-20%) would be a good idea to lower your overall costs. If need be there are dealerships that specialize in bad credit financing but beware high-interest rates.
There are times when even with a low credit score you can get an approval for a loan from a local bank or credit union. They will generally give you a letter of intent, and with this letter in hand, the dealer knows that you have funds available. They will work with you a little easier, and may even knock down the sticker price in order to meet your budget.
While buying a car on a budget and with bad credit can be frustrating, there are options available for the average person. The best thing you can do though is research. Know your credit score, and what charges are on it that way you can improve things as quickly as possible and drive away in the car of your dreams.