This hub is all about getting an auto loan when you know your credit score is not good enough to get a conventional auto loan. In times like this we all unfortunately miss a payment here or there that can leave an ugly black mark on your credit score. Because of this mark you may have some trouble trying to get an auto loan. But don't despair there is still some hope.

There are some steps you can take that will help you get bad credit auto financing. Do keep in mind that you will have to do a little bit more work, and that the interest rate you pay will be higher than normal but it won't be as high as the interest rate you will pay at the auto dealer ship. The reason it won't be as high as the auto dealer is that we are going to bypass them.

Let's go over the steps you need to take to get bad credit auto financing.

One of the first steps I recommend is that you go shopping for your car first. Go over to some of the auto sites and do some research on the car you want to buy. Once you've made your selection and have decided on a vehicle find out what the invoice price of that vehicle really is. Sites like Edmunds.com can provide that information to you and the information is available for free.

Now that you have the information, especially the invoice price, go to several dealerships and talk to the salespeople. Negotiate the best pricing for the vehicle you select. It's important here that you don't let them know you will not be using them for your auto financing. Let them keep thinking that. If they ask just say that maybe you will use them, but that at the moment you are not sure. Use one dealer against the other to get the lowest possible price that you can get for the vehicle of your choice.

Once you know what you will be paying go to an outside source to apply for a loan. There are loan companies out there that specialize in bad credit auto financing. These companies know the risk involved in lending money to folks with bad credit so they will usually ask you for more documentation than usual, they may ask for more of a down payment, and might even ask you to get a co-signer for your bad credit loan. Just don't be upset with all of their questions and requirements as you need to remember that these bad credit loan companies are businesses that need to make money and minimize risk.

You interest rate on your bad credit auto finance will usually be higher than a conventional loan but in all likelihood lower than the auto dealer. The reason is simple, auto dealers mark up loan interest to make more profit. That is why they sometimes will bottom line you on the price of the car because they make it up by increasing the interest the bank gives them by 2-3 percentage points. You will have avoided all of that by getting your bad credit financing from somewhere outside of the auto dealership.

Once you have received approval for your auto loan go back to the dealership to purchase your vehicle. Here is where you need to have nerves of steel. Here are a few things to keep in mind.

Don't budge on the price.
Do not accept any extend warranties.
If they insist on trying to finance you emphatically say "No".
If they start screwing around be prepared to walk out.

After you have completed your transaction you will start getting monthly invoices for your auto loan. Make sure you make your payments on time,every time.

In conclusion, not everyone can get a conventional car loan. For those who have a bad mark on their credit score and can't get a conventional auto loan, bad credit auto finance might be their best option.