If you're in need of a car but can't buy one outright -- and your credit is less than stellar -- you may be fearing the car financing process. Thoughts of high interest rates and restrictive terms are not that far-fetched, but there are ways to make the loan process easier and to get yourself better terms. Bad credit does not mean you're marked forever; it just means that you need to do some advance preparation. Here are four ways you can accomplish that.
Start with your bank or credit union and tell them your situation. Many places, especially credit unions, have auto financing programs for members. They may be willing to work with you if your account record with them is good. Also check with an automobile service club, if you belong to one. Another resource close by is the dealership itself. Call the office just to get information about what they can offer someone who has bad credit but needs a car, and find out what you'd need to do to qualify.
Look specifically for car loans that are finalized before you take the car. Yo-yo financing is all too common in the world of bad credit -- you are allowed to take the car, so you think you were approved, but then a few days later the dealership repossesses the car. Your credit union or bank shouldn't have these yo-yo loans, but dealerships sometimes do. Not only will looking for finalized loans save you the heartache of losing the car, but it may also help you find a financing company that will be easier to work with over the life of the loan.
Higher Down Payment
Save up as much as you can for your down payment. The more you can offer the dealership in cash, and the more cash you can show to the company that might finance you, the better the chances are that you'll get financing despite your credit. The smaller the loan you have to take out, the less of a risk you'll seem to be to the financing company.
Third-Party Auto Financing
Finally, you can also try to get pre-approved by third-party auto financing companies. If you're pre-approved for a loan, then dealerships know that they will likely get paid for the car. Pre-approval also eliminates the risk of a yo-yo loan. Always call around first, but once you start talking to these companies and letting them know how much you have for a down payment and what sort of car you're looking for, they'll be able to let you know where you stand and when you might be able to start looking for the car itself.
For more information about financing, contact a company like Leopardi Auto Sales.