If you think you cannot get an auto loan because you have less-than-perfect credit, you are not alone. Because of this, there are many services and companies that offer bad credit auto loans for people just like you. Do not let your credit define who you are and what you can buy; buy whatever car you want!
Whether you have suffered with bankruptcy, repossession, or simply have not had a chance to build any credit, there are many bad credit auto loans that can help you purchase your dream car. With a little nudge in the right direction and willingness to research, you can find plenty of auto loans for your situation.
Here are a few tips that should know when searching for bad credit auto loans:
Banks, credit unions, and finance companies all have companionships with auto dealers, so they can offer auto loans for those with bad credit to help those with a damaged credit history get a vehicle.
Review your credit report. Check to see all the information is up to date and correct before you begin searching for auto loans. You certainly do not want to end up paying more because of a mistake.
Your best bet is to start at your own bank or credit union. These days, banks are trying to service customers in any way they can, regardless of their credit, especially when the customer has some kind of account at the bank. You are more likely to get better auto loans — even with your bad credit — with your own bank or credit union than if you were to go directly to the dealership looking for auto loans. Interest rates on auto loans for bad credit can range anywhere from 10 to 20 percent more at dealerships. Your own bank will try harder to go for a lower percent, especially for customers with more than one account at the bank.
Even if your bank or credit union does not offer auto loans for those with bad credit, check out other banks. Dealers want their own cut of interest on a loan, so it will be cheaper if you apply to the bank on your own, rather than by means of the dealer.
Meet with your banker face to face. Smaller banks and credit unions, where they can get to know their customers on a more personal basis, really help when applying for bad credit auto loans. By talking to your banker in person, you can look him or her in the eye and discuss your individual situation. Explaining how you had a divorce or illness that disrupted your life could help them understand better, and make them more inclined to develop the auto loans for you.
Start financing before you start shopping. Researching the auto loans that are offered before you approach a dealer will show that you are responsible and deserving of a car.
Avoid “buy here, pay here” car lots; use them as a last resort. These companies’ bad credit auto loans usually have the highest auto and financing rates of all.
Do not give up. Many people assume the worse and simply do not try to get any auto loans if they have bad credit, but there is hope. You just have to put in a little effort.