Having bad credit can feel like the entire world is conspiring against you sometimes. You know that you need a car to get to work and gain access to more opportunities, but having bad credit can deter you from pursuing the purchase. We’re here to tell you that buying a used car with bad credit isn’t as difficult as you might think. There are actually tons of options available to help you get a used car. If you’re willing to do a little bit of homework and shopping around, you can definitely find a used car if you have bad credit. Keep reading on to learn how to buy a used car if you have bad credit.
1. Find Out What Your Credit Score Is
The first step towards buying a used car with bad credit is to determine what exactly your credit score is. You can easily do this by going online and checking some of the major credit agencies. You can actually get free credit reports online if you know where to look. Once you have an idea about what your credit score is, you can take a few steps to improve it if you want to get a better deal on your used car. People with bad credit scores tend to get financing with higher interest rates, so keep that in mind.
2. Watch Out for Shady Financing
After you decide that you are going to purchase a used car, you should keep an eye out for people calling themselves a specialist in bad-credit. There are plenty of people out there that make money by putting people with bad credit into long-term high-interest loans. It’s also a good idea to watch out for dealerships that insist you need to buy add-ons in order to obtain financing for a used car.
3. Make a Big Down Payment
One big way to counteract the higher interest rates you will be getting on a used car is to save up your money over time to put down a larger down payment. We mentioned earlier that people with bad credit tend to receive financing with much higher interest rates. If you can put down more money on your used car up front, you will have a lower loan to pay off at the high-interest rate. Saving up money for several months or years prior to your used car option is always a wise idea.
4. Get Pre-Approved for a Loan
If you can get pre-approved for a car loan by your bank, you will be much more prepared to go shopping. You also won’t have to worry about getting taken advantage of since you’ve already secured financing at a rate you are alright with. Reach out to your bank or credit union ahead of going used car shopping to see if you can get pre-approved for your car loan.