Very few people actually buy a car in cash, which is why online car financing is very popular. It is always easier to get a bad credit car loan compared to an unsecured personal loan, so you can always find lenders willing to help you buy a new or used car. There are many lenders for auto financing and you can get an auto loan quote for free online. Simply fill in some information about yourself and the amount of financing you need to pay for the car and you will be able to receive a loan quote. Make sure you compare poor credit auto loan financing offers from several lenders in order to get the cheapest interest rates and fees.
You can even get car financing before going to the nearest Toyota car dealership. Buy here pay here car lots make it easy for car buyers with bad credit to test drive a new car and get in-house financing at the spot. However, the rates will not be as cheap and you may also be required to pay more money down to secure the loan. Comparing car loan quotes is the best way to guarantee the lowest interest rates on your new car purchase. The following are some tips to get a cheaper car loan.
For car buyers with good credit above 720, it will be very easy to find zero financing deals offered by auto manufacturers to boost car sales. You will be able to enjoy no interest fees for up to 60 months, which is a wonderful benefit of having excellent personal FICO scores. It is recommended that you find out your FICO score before trying to secure financing, because some dishonest lenders will try to convince your credit is poorer than it really is. Simply generate your FICO score online for around $10 at Experian, Transunion or Equifax. As long as your FICO score is above around 620, you can still borrow cheap car loans with interest under 3%.
If you have bad credit, you can still get a car loan although rates will be higher. The better alternative is to try and improve your FICO score and save more for the down payment. This will take around 3 months and you may be able to get a 0% APR car loan.
No matter how good your FICO scores are, the decision to buy a bigger and more expensive car beyond your affordability will mean a serious impact on your future finances. The less money you borrow to buy a car, the less interest fees you save for yourself. Thus, if you can afford more money down and do not need the money soon, use it to reduce your car loan instead of wasting the opportunity in some low yield investments.
If you are upgrading your existing vehicle, it is recommended to sell it privately instead of doing a trade-in at the dealership for a new model. It is less convenient but you get a much fairer price through selling to private car buyers compared to what car dealerships are willing to give you.
No doubt buy here pay here car dealerships are convenient with their in-house car loans for bad credit, you end up paying higher loan rates than whats available online. Furthermore, when you do not have a pre-qualified car loan or at least know your own FICO score, it is easy to get cheated by auto loan scams. Dishonest lenders may say your personal credit is shot and you will not get a loan elsewhere.
You can ask the car dealership lender whether they are willing to offer better loan terms compared to whatever financing you already secured. Sometimes you can get lucky and find the best car loan rates for buying a car with bad credit.
Do you know that sales persons at dealerships make big money by selling both cars and car loans. They are always pushy and trying to get you to buy and get their in-house financing, so that they can earn commission twice from you. A common tactic is to up-sell you to a more expensive cars than what you can really afford or above your car loan limit. This forces you to choose their in-house car loans instead which comes with higher financing fees than you should pay for.
Beware that many car buyers with poor credit end up with more debt than expected after buying a car. Try to choose a cheaper model or a used vehicle instead. There is no point in struggling with monthly payments for the next 5 years on bad credit car loans where the interest rates is too high to be manageable for long.
Since you already have a car loan check, the sales staff knows you are a ready buyer and hence more willing to offer discounts or freebies to sweeten the deal. You can get a better price for your dream car and avoid high interest auto loans for people with bad credit at car lots.