It’s not always easy to car finance with bad credit. In fact, despite it being very common, bad credit can be a major hindrance to big parts of your life, leaving you with a number of difficulties and impossible situations. While we may not be able to change the system entirely, there are ways that we can work with it to improve your situation, and making the effort to car finance with bad credit is a good place to start.
The first thing that you have to realize is that it will be difficult to find a way to car finance with bad credit that won’t be at least a little expensive in the short term, however in the long run, you will end up saving a lot of money and putting yourself in a good position. So start by setting a realistic goal. If you live in North Carolina, for example, start shopping online by using search terms like “used cars charlotte nc” or "buy here pay here charlotte nc" to get an idea of what car prices are in a major city. This will also let you determine how much you’ll be able to afford, since you want to make sure that you can make consistent payments and build your credit score up over time.
The next thing you will want to consider is a short term loan. These are generally anywhere from three years to five years in length and involve higher monthly payments than long term loans. However, because you are paying more now, you end up losing less in interest payments and it demonstrates an ability to handle future credit in larger sums. There is a type of short term loan called a Buy Here Pay Here loan, in which you end up getting the loan not necessarily through the bank, but through the dealership itself and pay there monthly. These are often easier to get with lower credit and can help improve your score for future purchases.
Further, by getting a car loan, you’re setting yourself to be able to get a house one day, or credit cards, or a loan for a business. This is not just a way to get yourself transportation, it’s a way to demonstrate your ability to work with a lending institution for anything you may need and it gives them the confidence to know that you can be trusted with their capital. It’s a way in or a way back if you’ve had some problems in the past.
Thinking about a new car loan is sometimes a huge stress in your life, a stress that you don’t need. But taking the time to get one will help you in a number of ways and make you glad you decided to finance your new car even though you have with bad credit.