Installment Loan Quote
If you need a new vehicle and have bad credit, an installment loan could be your solution. Get an installment loan quote from one of our lenders and you could be shopping for a new vehicle with cash money. Buying from a private seller will always get you the best deal and an installment loan will let you do just that. Take a minute to fill out the short quote form and see what you can qualify for.
Buying A Car With Bad Credit
If you are looking to finance a car with less than perfect credit, you are not alone. Thankfully, you have a lot of options that might help you secure your auto loan. One, is the option above. Getting an installment loan from one of our lenders can open up a world of options.
It will, first and foremost, allow you to buy a vehicle with cash. Get approved and you can get money deposited directly into your account. You can then take this money and buy a car from an individual.
If you buy directly from an individual, you can avoid the dealership markup and save thousands on the cost of the vehicle.
Not convinced that this is the best route? No problem, let’s look at your other auto financing options with bad credit.
Buy Here Pay Here Dealerships
This is one other alternative that you have with bad credit but it comes with a few problems. If you shop at a buy here, pay here dealership, the dealer will be profiting from you in two ways.
First, they will be charging you max interest. There will be no negotiation, they will charge you the maximum interest allowed by law, probably 29%. With that level of interest, you will easily pay twice the purchase price at the end of the loan because of finance fees.
Second, they will charge you a premium for the vehicle itself. They will see the desperation and will be very unwilling to negotiate on the price of the vehicle. This means that you will pay above market for the vehicle that you finance.
So, with a buy here, pay here dealer, you will pay more in interest and pay more for your vehicle. By comparison, with an installment loan or personal loan, you can take the money and purchase a vehicle for much cheaper from a private seller. This can save you thousands. For example, a vehicle that you could buy for $10,000 from a private seller would often cost $15,000 from a dealer.
Car Dealers That Accept Bad Credit
In addition to buy here, pay here dealers, there are those that just accept bad credit because they have outside financing that deals with bad credit.
The problem with this is that the dealership takes a cut on everything they do. So, if you qualify for 20% financing, the dealer would add a little to the rate. They would write up your deal at 24% interest, as an example, and make money from you in a sneaky way.
If you get a separate finance deal, you can avoid the dealership markup. In addition, if you decide to give the dealership a shot at financing you, having an existing finance deal in lace will help. You can use it as a bartering tool to make the dealer work to get you a better rate.
No Credit Check Financing
You may see this advertised, but you should know that it really does not exist. Think about it for a second. If a dealer were to never check credit before financing a vehicle, they would not stay in business very long.
At least a basic credit check will need to be done to determine credit worthiness. That being said, many creditors do not check credit with the major bureaus. They use alternative credit services but still do some cursory check of credit.
No Down Payment Dealerships
Getting a no down payment loan with bad credit can be a challenge. The problem is that the less you put down, the riskier the loan is.
As soon as you take a car off the lot, it depreciates. This means that if the lender were to have to repossess the vehicle, they would have a hard time recouping their investment. The less money that you put down, the harder it would be to recoup their money.
So, zero down payment loans become much harder to obtain, the worse your credit is.
$500 Down With Poor Credit Cars
An alternative to zero down auto loans is the $500 down loan. This is easier to get approved for because a down payment makes a loan much more palatable for a dealer.
For starters, any money down will help approve the Loan To Value ratio of the loan. This makes the risk much less.
In addition, a down payment represents a borrowers capability to make a payment. If you have money to put down, you are more likely to have money to make the payments.
Buying A Car With No Credit
Overall, it is difficult but not impossible to obtain a car loan with bad credit. If this is your goal, there are several things that you can do to improve your odds.
More Down Payment
The more money that you come down with, the higher your odds of approval are. More money down equals less risk for the dealer. It means that if they had to repo the vehicle, they would be far more likely to be able to recoup their investment.
Appear More Stable
Lenders want to know that you are stable and will be round. They want to see that you have lived in one place for a long time. This shows that you are stable and will be easy to find.
In addition, a stable work environment will sho the lender that you are making money and will continue making money for some time to come.
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