When you have bad credit, it can be difficult to finance a used car. Everyone needs reliable transportation, but having bad credit oftentimes translates to higher interest rates and car payments. Despite these common obstacles, there are ways to get financed, even if your credit isn’t in the best shape. If you have a low credit score and you are in the market for a used car, here are some things you can do to increase your chances of securing financing.
Make a Large Down Payment
Making a large down payment is a simple, yet effective way to boost your chances of getting approved for financing. It shows financial institutions that you are serious about purchasing a vehicle and that you are capable of saving and managing money. You also present less of a financial risk, since buyers who invest large sums of their own money are less likely to default on loans. Buyers who make a down payment may also gain access to better interest rates.
Rebuild Your Credit
This may seem like an obvious course of action if you have bad credit, but it is the most efficient way to ensure that you get approved for a loan. Paying off overdue bills and establishing a history of responsible credit use can go a long way when it comes to securing financing. Car buyers with lower scores will be subject to higher rates and less favorable payment terms.
Use a Cosigner
Using a cosigner can greatly improve your chances of getting financed. Enlisting the help of a spouse or close family member is the most common practice when it comes to cosigning. It should be noted however, that if you do not make your monthly payments on time, your cosigner will also be held responsible.
In the world of used cars, there are practical ways to secure financing with bad credit. At our dealership, we offer customers a variety of financing offers, and we are sure that we can work with you, regardless of your financial situation. Don’t give up just yet; there are many ways to finance a car with less than perfect credit.