How to Finance a Car With Bad Credit

by Lolita Kotter

Purchasing a new vehicle is one of the biggest purchases an individual can make outside of purchasing a home. Luckily there are several ways to buy a vehicle. Whether you have cash on hand to make the purchase or utilizing credit, buying a car still takes a lot of money and commitment. Commonly people do not have cash on hand to purchase a vehicle out right, even if they do it can quickly deplete a bank account because of the high price of vehicles, new or used. The only option left is to make the purchase on financing the vehicle either though the dealership or a third-party financial institution.

Financing Options

When financing a vehicle there are several options to choose from. Traditional ways are the most common such as going through a bank but there are other ways of finding financing that many may not think of. Let’s take a look at a few ways to seek out bad credit car finance:

  • Finance with little money down – Typically most car dealerships have a deal on little money down with financing. These deals typically involve high interest rates and good credit scores.
  • Finance with a large amount of money down – More money down usually equals lower payments and better interest rates. This is usually a great option for individuals with bad credit.
  • Personal loan – Some car dealerships may not approve you for financing so you may need to look else where to access funding such as a personal loan. Personal loans, sometimes, may be easier to get approved when you have bad credit car finance.
  • Borrow money from family or friend – Desperate times ask for desperate measures. Sometimes we have to result in asking friends or family to borrow money to purchase a car. Although not traditional financing it is still a form of financing a vehicle.

Purchasing a car will take a solid credit score and stable job. This will be the determining factors on whether or not you will be approved. Having bad credit can make it difficult to purchase a car. But knowing how to finance a car with bad credit can help when going into a dealership to purchase a car.

One of the top ways to finance a car on bad credit is having more cash down on the purchase. This will make it so the dealership only has to loan you a lower amount to sell the vehicle to you. This is one of the top ways to be approved to finance a car with bad credit.

Another great way to be approved on a car loan with bad credit is going to a used car dealership that is independently owned. These car dealerships typically will approve anyone in order to sell a vehicle. Make sure to take a close look at the agreed interest rate as they are commonly very high and can take quite awhile to pay off. But when in need of a car for necessity it may be a great option.

Look at the car finance here if you are in search of purchasing a vehicle with bad credit. Sometimes credit unions or small local banks will be willing to work with you on certain stipulations that must be agreed upon both parties. Even though those stipulations may be higher interest rates, money down or a lower approval cap; it may be the only way to be approved for bad credit car financing.

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