What to Consider Before Buying a Car with Bad Credit
July 13, 2015 / Sara Davis / Balance Credit and a Car Loan
Just because you have gone through a bout of bad luck and have bad credit doesn't mean you shouldn't have a vehicle to get where you need to be. In some cases, having a car is a necessity in order to get to and from work, or taking the kids to school. There are a few avenues and methods of help for those looking to purchase a vehicle with bad credit.
Don't sign until it's final
When purchasing a car and being approved for credit, there will be a line on the agreement near the signature that reads "subject to final approval." However, this is not the case at all dealerships. When signing your paperwork, make sure you speak to a representative about this point, as it means that your financing terms aren't set in stone. The bottom line is you should never drive off the lot without having all of the details in place. You don't want any surprises coming your way after you thought you left with a sweet deal.
Always make sure you have a conversation before signing, so you are aware of all the financial responsibilities you are about to incur.
Having a cosigner has its benefits
Naturally, you are a capable and competent person, but having an extra set of eyes and ears on your side is always helpful. For example, going with your significant other or having a cosigner by your side will certainly be comforting. By having a cosigner by your side, this will demonstrate to the lender that you are certainly going to be able to make your payments on time, or else your cosigner will. Your cosigner's credit score will also be considered, so you won't get stuck with a higher interest rate simply based your credit history alone. But this is also an excellent way to boost your own credit, as you will continue to make your payments on time from there on out.
Consider the loan terms, not the monthly payments
It is often tempting to look at the number you will be paying every month and shoot for the lowest, but this can get you into trouble, or at least put you in a situation where the length of your loan is much longer than you thought. When discussing loan repayment terms, work with your lender to come up with a plan that fits your schedule, and is also something you can afford.
You can get a car even with bad credit, you just have to go about it the right way. Be upfront with your questions and don't just settle for anything that comes your way. No matter how bad your credit is, you are not in a take-it-or-leave-it situation. The more you know before purchasing a vehicle, the better off you will be.