How to Get a Car Loan With Bad Credit

Having a bad credit score does not necessarily mean you can’t get a car loan. What it does mean is that you may be able to get a loan, but your chances of getting a low interest rate and low monthly payment with that loan are fairly slim. But if you need a car badly enough, you’ll be happy to deal with those consequences for the time being as long as the end result is that you have something to drive. Here are a few tips to help you understand how to get a car loan with bad credit:

Hit Dealerships When They Have Lots of Cars to Unload

About once a year — sometimes more often — major car dealerships will have large shipments of newer model cars coming in. This means that they desperately need to get rid of the older cars to make room for the new stuff. When this happens, dealerships are much more desperate to get your business and may relax their rules on credit. You’ll know when this is happening by watching their advertisements. Sometimes you’ll even see ads in your local paper for incredible deals with no money down and no credit check. You may need to read between the lines a little because these deals are often too good to be true, but you still stand a better chance at getting a car during these times than you do at others.

Set Your Sights Low

According to MSN Money, the number one reason why most Americans are broke may have a lot to do with how much they pay for vehicles. The average American spends well over $8,000 per year just on car payments! If your credit is already bad, you don’t want to make it worse by getting a vehicle you cannot really afford and then end up having to go through with an auto loan modification just to get yourself caught back up when you fall behind. Try to set your sights on less expensive older model vehicles when you go car shopping. A vehicle like this may not be what you want, but it should get you from point A to point B — at least until your credit is in better shape. Once you have better credit, you can try to trade up for something you really want rather than something that just serves the purpose of getting you around.

Try to Have Some Money Down

A key step in learning how to get a car loan with bad credit is understanding that you need to put at least some money down. Having a down payment won’t necessarily guarantee you’ll get a car loan, but it will up your chances slightly. The more money you have for a down payment, the more likely you may be to get loan approval.

Look For Dealerships That Cater to People With Bad Credit

There are plenty of privately owned car dealers that specialize in bad credit car loans. Under normal circumstances, it would be best to avoid places like this because they’re known for selling cars of questionable quality at inflated prices with unbelievably high interest rates attached to them. This is why doing business with a place like this should be a last resort for you. Seek out bad credit car dealers only if you have explored all other avenues for getting a vehicle with no luck. It’s also a good idea to check out all the private car dealerships you’re considering with the Better Business Bureau to make sure they check out and haven’t ever seriously ripped anyone off. If the car dealership you want to use is in your local community, try asking people you know that have done business with them in the past what their experiences were like.