Thinking of getting a new ride? Buying a car is challenging enough, but if you happen to have a credit score that is not the best, the deck is even more stacked against you. Don't feel bad. There are many people in the same position that you are in. It is not the end of the world. Armed with a little bit of knowledge, you can still find a deal that is right for you.
Getting Approved
Whether you are buying used cars in Urbana or anywhere else, getting approved for a loan is probably the biggest problem. Depending on how bad your credit score really is, this could be real easy or real hard. A low score may very well mean that you have less options than someone with stellar credit. This may mean that you are limited to used car lots that cater to this sort of situation. These types of financiers specialize in getting deals for people that have credit challenges, and in return for their good faith efforts, they get ridiculous interest rates. They take the risk, and you pay them over time for taking that chance on you.
The thing here to know is that a low score might not be that limiting. If you have a long-standing relationship with a bank, they might be more likely to give you a chance even with a low score which could mean a better rate and more options in your car-shopping experience. It never hurts to ask. Remember, all they can tell you is no, so before you go to those dealers that are obviously catering to those with the worst scores, check with other loan options first. You might be surprised to find that your score is not as debilitating as you first thought.
You Are Still A Customer
Believe it or not, there is one thing you have on all of those people that have good credit scores. You are going to make the entity give you a loan a lot more money. Now that is bad in a lot of ways, but it also represents power. Remember, they want to get you that loan because they want to make that money, so they have more incentive to work with you and try to find a way to make it happen. Remember, you are still the customer here, and you are still a very valuable asset wherever you decide to shop.
Can It Wait?
Are you shopping for a car because you are in dire need, or do you just want a new vehicle? A lot of people buying used cars in Urbana just have that itch for an upgrade. The truth is that if you have a reliable vehicle already that may not be the latest and greatest thing but gets you where you are going, it may be in your best interest to take some time and try to improve your credit score before taking the next plunge.
Remember, you are going to have a higher payment because of your credit score most likely. A lot of people think there is not anything that can be done about the score, but the truth is that you can make a pretty big difference in just a couple of years or so. If you can wait it out, you might be able to get a much better payment situation, or better yet, be able to afford your dream vehicle instead of settling for what you can afford right now.
Is There A Better Way?
Before you accept a high interest loan for a vehicle, think about your situation. Could you pay for the car in another way that is more beneficial to your financial situation? There are a lot of ways to do this.
Could you save for a little while and buy it with cash? Could you borrow from a 401k and pay yourself back with interest instead of paying interest to someone else? Would a family member be willing to front you the money if you agree to pay back that and some extra? These are all ways to get the job done where your credit score is insignificant. Remember that these methods will not help your credit score either, so if rehabilitation is part of your plan, you will need to go with traditional loan methods to get credit for your good payment history.
Be Realistic
When you go out shopping for a car, the dealer is going to pressure you to buy more car than you need or want. They can crunch the numbers and make it look like a good deal. Why not get all the extras or step up to a luxury model?
The bottom line is that you are going to be making those payments every month, and you want to be able to make them without a struggle. This makes your life easier and increases the chances that you don't further degrade your score with missed or late payments. Stick to your guns and don't get talked into buying more car than you need. Have a figure as a line in the sand in your mind when you go to the lot, and don't budge off of that number.
Get Your New Car Even With Bad Financial History
Buying a car with a low credit score is not ideal, but life is tough and things happen. The road to a great credit score in the future can be started with that next purchase. A good payment history on a car is a great way to start moving in the right direction.
Car Credit Conclusion
By using the information above, you are putting yourself in a great position to get a deal that will be beneficial to you in the long run and not making a mistake that you may regret many payments later. It is better to have a good plan before you even start looking at vehicles so that you know what your price range is and what is going to be possible for you month to month. Be prepared, and go find the right car for you.
