How to get a cheap vehicle with bad credit
When you have bad credit, you might find that a cheap car is your only option. AT Express auto loan, we suggest you focus on affordable prices rather than cheap – you still need a decent vehicle in terms of quality – just a slightly more economical vehicle. Here’s how to get a cheap car.
9 tips for getting a cheap car loan
Good credit borrowers who do not have the income to take out a new vehicle loan pick up high-end used cars and drive up prices as used vehicle inventory shrinks on dealership lots . As a borrower with bad credit, you are probably buying an increasingly smaller selection of used cars and you may want to get something fast before the prices go up. But be careful – don’t settle for just any vehicle because the price is right.
To get a car that is both economical and won’t collapse in six months, it’s important that you know how to shop for a bad credit auto loan and who to shop with! Here are nine tips for getting the most out of your car buying experience.
- Know your creditworthiness – If you don’t know where you are at, the dealer has the upper hand when it comes to selling you on prices and interest rates. If you don’t know your credit score, you can’t research the average interest rates for an auto loan with bad credit, or get an accurate estimate of how much you can afford the car using. online auto loan estimators. Without this knowledge, you don’t have the power to negotiate your costs with a lender or dealer.
- Choose a used vehicle in good condition – Ideally, you want to buy a vehicle that has already seen its biggest drop in value, but has not yet fallen off the cliff. That means looking for cars that are two to five years old, in most cases. Be aware that newer vehicles often qualify for a lower interest rate, but generally have a higher sticker price.
- Get a vehicle history report – A vehicle history report is a starting point for understanding the quality of the car. It is always good to know if a vehicle has been taken care of by its former owner (s), or if it has ever been the victim of an accident.
- Take it to a mechanic – Even with the truth on paper, there are sometimes issues that can lurk under the surface of a used car. It’s not something a lot of people know to look for, like signs of flood damage. Certified mechanics can be thoroughly inspected and let you know if a vehicle is mechanically sound.
- Know what you can bargain for – Once you’ve found a car you’re happy with that matches the loan approval you got from a lender, you need to know what you can and can’t negotiate on a car loan deal, so not to end up paying. for extras you don’t need.
- Don’t spend on extras – There are many dealer extras and add-ons that can appear in a car loan agreement, so be sure to read the document carefully before signing anything. Examples of dealer add-ins include VIN engraving, paint and fabric protection, or even credit life insurance. You are not required to purchase any of these products and can request that they be removed. Reprint documents before signing.
- Respect your budget – There are many ways to stay on a budget when you need an affordable car loan. Make sure you have a substantial down payment or use an exchange if you have one, and go for the shortest loan term you can afford. Also, before you go to the dealership, make sure you know how much you are spending on your monthly bills compared to your gross monthly income, and try to calculate a loan repayment equal to or less than 20% of your monthly budget. These calculations are done by the lenders to ensure that you do not exceed your finances. You can read more about them here.
- Shop – It is also important that you do not settle for the first offer deposited in your lap. Bad credit borrowers are generally eligible for higher interest rates, so it’s a good idea to compare a few different dealers to see what their lenders can do for you. If you apply for the same type of credit within two weeks, one single blow affects your credit score, even if all the requests are listed on your credit reports.
- Choose the right lender – When you have bad credit, it may not be possible to get a loan anywhere. The process of borrowing for bad credit works a little differently than if you have excellent credit. The biggest difference is that as a consumer with credit problems, you usually have to qualify for a loan before you can choose your car. There are two types of bad credit lenders that are common for bad credit borrowers:
- Subprime lenders Work with special finance dealers to help people with less than perfect credit get the auto loans they need. These lenders look at more than just your credit score to help you qualify for financing. They are concerned about your ability, stability, and willingness to take out a car loan and look at a number of factors to make sure you meet the loan requirements.
- Internal funding is done through Buy here pay here (BHPH) dealers. In these car fleets, which are generally independently owned, the dealership is the lender and does not rely on outside lenders to qualify you for a loan. These dealerships only sell used vehicles and tend to charge higher interest rates, so be careful if you’re really looking to save money. These car packages can be a great choice for bad credit borrowers who want to skip a credit check or need a vehicle. now. Be aware, however, that convenience often comes with a higher price tag.
Tips for getting a good car deal
Even when trying to keep your budget in check, don’t think too small – being a payment buyer has its downsides. If you only focus on how much you spend on a single monthly payment, you could end up paying more interest charges than you really need.
When shopping for a vehicle and need to do it cheaply, there are a few things to keep in mind:
Base cars have base prices. If you’re looking to save money on your next vehicle, don’t go for a vehicle with the top trim package. How good would it be to have the best infotainment system on the market in your next car? Sure. But is it really necessary? Stick to the functionality of the vehicle and make sure it can do what you need without all the bells and whistles.
Discounts, offers, and incentives can also save you money. Look for vehicles that are advertised with these economical offers. These often apply to new cars and sometimes can be more difficult to qualify as a bad credit borrower, you may need to look for the right deal. Want to find deals in your area to see what’s available, discover our partner CarsDirect.
There are some extras that might be worth considering if they can save you money in the long run. An extended warranty, for example, might cost you a little more each month, but could save you hundreds down the line. To find out if it’s worth it, you need to compare the cost of adding the collateral payment to your loan against the potential future savings if your vehicle needs repairs.
You can buy a car for cash. This could be a great offer as a bad credit borrower because you don’t have to deal with financing paperwork or monthly payments. Remember, however, that you get what you pay for. If you get $ 2,000 back to buy a used car privately, it’s a $ 2,000 vehicle that might not last as long as you need it to before you have to start the car buying process all over again. ‘a car.
ACE advice: Just owning a vehicle does nothing to improve your credit, but a car loan with bad credit is a great way to start building it. One of the best ways to improve your credit history is to take out a loan that you can easily afford and make all the payments on time.
Ready to find your next vehicle?
When you need an auto loan with bad credit and are looking for an affordable and reliable vehicle, it can seem like you are facing a mountain of refusals. Let’s turn this mountain into a molehill by directing you to the right dealership. AT Express auto loan, we have developed a network of special finance dealers who have subprime lenders ready to help consumers with credit problems.
To get the process started today and save time, money, and hassle, simply start here by filling out our No-Obligation Car Loan Application Form. It’s fast and completely free.