Purchasing a Car with Bad Credit
A bad credit score can make purchasing a car feel like a nightmare. But do not give up hope because there are a few routes you can explore to easily purchase a vehicle. If you are currently shopping for a car and you have bad credit please read on....
Saving Money for a Car Purchase
If you have a rough idea of how much you are going to spend on a car purchase you can choose to save up over a period of time. This is a great option if you are not in desperate need for a car and you have time to wait. It is easier to put aside a set amount of money each week rather than trying to scape up all of your change at a moments notice. Remember to make sure that the amount you are putting aside fits in with your budget.
Cosigners for Auto Loans
Another way to purchase a car with bad credit is to have a family member or friend cosign a loan for you. This means that the person cosigning is taking responsibility for the loan if you fail to pay it. If you have someone that will be willing to cosign your auto loan make sure you pay the loan back completely. Also make sure to have the payments in on time each month. By paying payments late you are not only hurting your credit more you are also hurting your cosigner credit as well.
Before you sign any of the loan paperwork double check that you can afford the monthly payment amounts. You do not want to realize that the payments do not fit your budget after the paper work is done.
Buy Here, Pay Here Dealerships
If you have bad credit and need a car immediately you can choose to purchase a vehicle from a Buy Here, Pay Here Dealership. These type of dealerships provide in-house loans based on your monthly income. You will pay a higher interest rate compared to a standard car loan with good credit. Also it is harder to negotiate the prices of cars at Buy Here, Pay Here Dealerships because they know that they are you last resort for purchasing a vehicle. These in-house loans are reported to the credit bureaus so make sure to make you payments on time. This will help to raise your credit score for future purchases.
Pros and Cons
Saving Money to Purchase a Car
You do not need a loan
It can take several weeks to save enough money. You will have to wait longer to purchase a car.
Using a Cosigner for a Car Purchase
You can purchase a car right away. You can recieve a lower interest rate. You may have the option of buying a new or a used vehicle.
You are putting someone else's credit at risk if you are unable to pay back the loan.
Buy Here, Pay Here Dealerships
You can purchase a car right away on your own. You can improve your credit score by making payments on time.
You can usually only purchase used vehicles with higher mileage. Your interest rate will be noticably higher.
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