Buying a car with bad credit is something that has become increasingly more difficult over the past few years. Before the so-called “credit crunch” that began about two to three years ago, buying a car with bad credit was not a problem at all as long as the car buyer was willing to pay a higher interest rate, and possibly higher fees. Once the credit markets tightened people with bad credit that were once able to get approved for a car loan as long as they were willing to submit to the higher rates were now being denied all together. This made buying a car with bad credit much more difficult, and people had to think of alternatives so that they could eventually get approved.

There are really two schools of thought if you currently have bad credit and are in need of a car loan. You can either just try and go for it with you current credit situation and take your chances applying to lenders, or you can put in the effort to try and improve your score so that you will no longer have bad credit.

Despite what has happened over the past few years in terms of the credit markets and the economy, if you decide to go ahead and apply with a bad credit score and history you can still get approved. You must make sure that the other factors that will play a role in whether you get approved or not are in order, and this means that you must have an income, an appropriate employment history, and something of value to use as a down payment such as your current vehicle. While a bad credit score doesn’t automatically disqualify you from receiving a car loan, no income does, and unless you can come up with a creditworthy cosigner that is willing to be on the loan, you will have to have a solid income to get approved if you have bad credit. Once you make sure that everything else is all set on your application, you will then have to decide where to apply if you have bad credit.

Dealerships can be a good source of car loans even during this credit climate for people with bad credit. Typically if you want to save the most money a dealership isn’t always the best place to go for your car loan, but if you have bad credit and can have the rest of your application in order a dealership will have a better chance at approving you then a major bank. Dealerships are specialists at wheeling and dealing with their finance partners, and while it is still going to be difficult to get approved because of your bad credit, depending on the severity of your history, it is a worthwhile endeavor to try and see what the dealership can do for you.

If you aren’t able to get a loan through a dealership, you may have to resort to what are called “sub-prime” or “bad-credit” lenders. These lenders deal with people who have bad credit on a daily basis, and they will typically be able to approve you despite your credit history. The trade off is that you are going to have to pay a much higher interest rate, as well as many fees that are tacked on to the loan for a number of things. If you do decide to go this route, it is highly advisable to do your homework on the lender you end up applying to, as many of these kinds of lenders can be fraudulent and outright scams. Especially be careful if you find the company online, as many of these fraudulent outfits make the Internet their only way to find their victims.

You can then try a more conventional lender, but if you haven’t got approved at a dealership or by a sub-prime lender then you probably have a difficult time with a more traditional lender. This means that if you have exhausted all of your options then your only other choice is to try and take the necessary steps to improve your credit. This can be done fairly easily, and depending on your own situation, a few steps can take your credit from poor to fair relatively quickly. Once you have your credit back in line, you will not have to worry about having to apply to sub-prime or bad-credit lenders, or be forced to submit to an exorbitantly high interest rate.

Buying a car with bad credit can be accomplished even during this credit atmosphere, and the important thing you need to do is to decide on whether you want to apply before you improve your credit, or after. Either way you have options, and in the end as long as you stay persistent some lender should eventually approve you.